Vijay Sales to Rasna: Summer sales of beverages, white goods a damp squib

Sales of consumer durables and beverages got impacted this summer due to unseasonal rains, especially in the northern region of the country. While some consumer durables makers and retailers saw growth, it was well short of their expectations, industry executives said.

Vijay Sales, a leading retailer of white goods, or large home appliances, witnessed a drop in sales of air conditioners and refrigerators, which typically fly off the shelves in the summer months.

“Over the March-June period, we have seen sales of air conditioners and refrigerators drop by 15 per cent,” Nilesh Gupta, managing director of Vijay Sales, told Business Standard, adding that the decline in sales would have been higher, but for some pick-up seen in May and also in June due to the late arrival of rains.

Another electronics retailer said, asking not to be named, that sales of summer white goods were impacted this year. Unseasonal rainfall in the northern parts of the country resulted in muted sales growth of air conditioners and refrigerators.

While the retailer had expected higher sales this year as well, growth was in low double-digits.  The retailer explained that sales were strong last year due to consumers coming to the shop after two pandemic-affected years. Secondly, at the start of this summer season, while expectations were strong, things eventually did not pan out accordingly due to weak demand in north India.

Kanwaljeet Jawa, managing director and chief executive officer of Daikin, said he also expected 15-20 per cent growth this season, but the same did not materialise. “We were expecting growth of 15-20 per cent, which did not happen during the summer season. We witnessed single-digit growth of 7-8 per cent in summer white goods sales. We managed to gain market share in Tier-III and Tier-IV markets, which helped us grow. We also offered schemes, which aided this growth.” He further added, “We are not happy with this growth.”

Godrej Appliances had earlier said it had cut production in June due to an inventory pile-up due to weak demand. Consumer durables companies had called out the inventory pile-up in the January-March quarter earnings call due to the late summer season.

Anil Rai Gupta, chairman and managing director of Havells India, had told investors after its quarter ended March earnings: “We are witnessing a delayed summer, which may impact the demand for summer products this season.”

Voltas also witnessed high-channel inventory in the March quarter and the company attributed it to the rainfall in late March, Manish Desai, head of corporate finance at the company, had told investors after its January-March results.

Beverage sales have also been impacted in the summer months, which see around 50-60 per cent of their yearly sales.

Retail intelligence firm Bizom noted that beverage sales were impacted both in April and May, which is the main demand season. In April, beverage sales were down 26.2 per cent, and in May, it was down 29.4 per cent.

“Partly, demand was bad, but we have managed to end the season on a positive note both in value and volumes. While the season is still on due to heat now picking up in the north, we are seeing single-digit rise in value. Volume (growth) is also in the positive but lower than value (growth) as we took price increases,” said Piruz Khambatta, chairman at Rasna.