Offline retailers keep off Freedom sales amid lockdown, muted sentiment

Croma, Reliance Digital buck trend, but mood remains sombre

The Independence Day weekend this year will go down as the weakest in 13 years for brick-and-mortar retailers, especially those in lifestyle, apparel and fashion. The reason: Lockdown restrictions in a number of cities and muted consumer sentiment, which has compelled most players to withhold burning cash to promote Freedom sales.

The only exception are a few electronics retailers such as Croma and Reliance Digital, who've gone ahead with their I-Day sales, giving cashbacks, offers and discounts on most products including laptops, TVs, mobile phones and appliances. Industry sources say that electronics retailers are offering up to 60 per cent discount on products to woo consumers.

But, as Ritesh Ghosal, chief marketing officer, Croma, says that impulse shopping is missing and those stepping out remain mostly serious buyers. “It is not a usual sale period because there are restrictions in terms of social distancing and hygiene standards that have to be maintained at stores. Having said that, we should see a 15 per cent year-on-year growth in Independence Day sales, which is good, considering the environment,” he says.

E-tailers such as Flipkart and Amazon have also reported double-digit sales growth during their recently concluded online festivals, led largely by the electronics category. Amazon held its Prime Day event on August 6 and 7. Flipkart’s I-Day sale was held on August 6-10. And Amazon’s Freedom sale ran from August 8 to August 11.

“Electronics is the only category that is seeing some offtake at this point, thanks to the work-from-home and learn-from-home culture,” says Devangshu Dutta, chief executive offer, Third Eyesight, a Gurugram-based management and retail firm. “Categories such as apparel and lifestyle, on the other hand, are not seeing that level of interest from consumers because these are not a pressing need for many. These purchases can be deferred, that’s the view of most consumers. Retailers in these segments are picking up the cues.”

 

Anand Agarwal, chief financial officer, V-Mart Retail, which is into apparel and lifestyle retailing in smaller cities, agrees. “We are not seeing many store visits. Weekend restrictions in a number of cities and financial insecurity are hurting shopping in general. We have not promoted I-Day sales.”

Executives at Future group admit that there has been no endeavour to promote I-Day sales at its Big Bazaar outlets this year, something founder Kishore Biyani had started in 2007. Analysts tracking the market say this has more to do with the group’s ongoing debt concerns and speculation of it being bought over by rival Reliance Retail.

While Future is battling its own woes, some other names such as Westside, Pantaloons and Shoppers Stop have not been aggressive on the ground as far as Freedom sales go this year, sector analysts say. Shoppers Stop, for instance, is running promotions online, tying them with its end-of-season-sale, rather than running separate campaigns for Independence Day.

Industry sources say that the next big peak for retailers will be the Dussehra-Diwali season, by which time many anticipate that lockdown restrictions would have eased and people would have become more comfortable with the idea of out-of-home shopping.

Nilesh Gupta, managing director of electronics chain Vijay Sales, which has also not promoted I-Day sales this time round, says Diwali will be a better occasion to look forward to. “By then, I hope to see greater movement of people, partly because Diwali is an important festival and there will be fatigue due to months of lockdown. I expect consumers to loosen their purse strings too,” he says.

The Retailers Association of India, the apex body of organised retailers, says that it is beginning to see early signs of recovery, despite a 63 per cent year-on-year decline in retail sales in July. This compares favourably with the 67 per cent year-on-year decline in retail sales seen in June and a 70-80 per cent decline recorded in April and May.