Retailers advance sales as customers stayed indoors in May to avoid heat

The spring/summer end-of-season sales have been advanced by a week with brands having high inventories due to weak demand in May because consumers avoided shopping in the hot month.

No marriage dates, along with the Lok Sabha elections, was another reason why sales were weak.

Retailers say while April was just about fine, like-for-like (LFL) growth was in the negative in May.

The mid-year end-of-season sales start typically mid-June and go on till the end of July. A few pieces go on heavy discounts towards the Independence Day weekend.

However, discounts remain the same despite the rise in inventories.

“Demand has been slow. April was fine, but May was bad. LFL growth was negative,” Manish Kapoor, chief executive officer (CEO), Pepe Jeans India, told Business Standard.

He said discounts offered by the denim brand this sales season were up to 50 per cent and it intended to end sales by the third week of July.

“We are now witnessing single-digit (LFL) sales growth in June.”

A retailer said the inventory pileup for the industry was 20 per cent higher than last year.

Celio India has started its end-of-season sales four to five days earlier this year and will end them in the first week of August.

“The festival season this year is approaching earlier than last year and we want to bring in fresh inventories before the season starts. We have to a certain extent started to introduce the fall collection,” said Satyen Momaya, CEO, Celio India.

He said LFL growth in June so far had been up 8 per cent.

There were fewer people visiting Quest Mall in Kolkata in May.

“May didn’t see much demand as customers stayed home to avoid the heat. Retailers have advanced their sales by a week, and we have started to see a pickup in June compared to May,” said Mukesh Kumar, CEO.

However, according to the Retailers Association of India (RAI), retailers saw growth of 3 per cent, driven largely by food, groceries, and consumer durables.

“Retailers saw 3 per cent growth in May over the same period last year. While consumer spending on non-essential items remains cautious, categories such as food, groceries, and consumer durables have shown a positive growth trajectory. Retailers are looking forward to the business post-election season. The Budget in July will hopefully provide much-needed incentives to bolster consumer confidence and support further growth in the retail sector,” Kumar Rajagopalan, CEO, Retailers Association of India (RAI) was quoted as saying in the release.

The RAI said that among categories, food and grocery, and CDIT (consumer durables/electronics) reported growth of 6 per cent each, followed by QSR (quick-service restaurants), which showed growth of 5 per cent over May last year.

Sales story
 

Like-for-like sales were in negative in May

Single-digit like-for-like sales growth in June due to end of season sales

What the Retailers Association of India said
 

Retailers saw a 3% increase in sales in May driven by food, groceries, and consumer durables

Consumer spending on non-essentials items still under pressure

Food, grocery and consumer durables sales up 6% in May Plans of retailers

Pepe Jeans India intends to end the sales by the third week of July

Celio India has also started its end of season sales early by four to five days