 "FMCGs")
Already in the thick of the festival season, consumer companies are seeing a surge in demand as shoppers throng stores. The glow of celebrations has been matched by the shine of lower price tags, after the government trimmed maximum retail prices across a range of goods with the recent cut in goods and services tax (GST).
In fast-moving consumer goods (FMCG), the effect has been immediate, with sales lifting in double digits. Parle Products is reporting a 15-20 per cent jump in sales even at the primary level -- to distributors and stockists. “Buying was at a standstill but it is higher than we had anticipated,” said Mayank Shah, vice president at Parle Products.
“Reductions of tax slabs, government spending coming back, and reduction of rates will put more money into the hands of the consumer. Urban demand bottomed out last year this time but things have been improving consistently. It is set to accelerate from here and will last beyond the festival season,” Sunil D’Souza, managing director and chief executive officer at Tata Consumer Products, told Business Standard.
In Delhi, the mood in the markets is unmistakably festive. At Connaught Place, apparel retailers say demand has returned after a sluggish few months. “People are aware of the GST rate cuts and come in enquiring about new MRPs,” said a sales executive at a Van Heusen outlet. The brand has lowered prices on several items under ₹2,500, while hiking prices of some above that threshold. “This season is definitely feeling better than last year as customers are more willing to spend with lowered MRPs,” the executive added.
International retailers such as Uniqlo and H&M have also cut MRPs on items priced under ₹2,500, while absorbing higher taxes for those above. “Our store is definitely seeing more walk-ins and sales after price reductions of up to 2.5 per cent on almost half our portfolio. The (GST) rate cuts have definitely lifted demand sentiment and we are expecting a good season until December,” said an executive at one of the stores.
For Lalit Agarwal, founder of V-Mart, which sells fashion and lifestyle products mostly below ₹1,500, the uptick is already visible. “We are witnessing demand come back and it is now in mid-single digits. The GST effect will also start to push demand in the next five to seven days and we expect sales to be in low double digits by Diwali,” he said.
“The buzz is back at the malls,” said Pushpa Bector, senior executive director and business head at DLF Retail. “We are seeing green shoots with the rate cuts and the income tax rebates aiding the demand sentiment at retail touchpoints. We are hopeful of a double-digit growth in H2FY26, as each weekend starts to get better than the one before,” she said, adding that upcoming shopping festivals will bring fresh offers to add value for customers. “There was a fatigue, which had led to a subdued retail sentiment, but that is bouncing back now.”
Consumer durables are showing similar signs of revival. Vijay Sales has seen sales double as customers who had been holding back until the GST cuts took effect on September 22 began flocking in. “In Navratri, due to the pent-up demand coming in, we are seeing a 50 per cent increase in sales. The real impact of GST will only be seen after Dussehra,” said Nilesh Gupta, managing director of Vijay Sales. The chain has seen brisk sales in televisions and mobiles, while air conditioners -- also benefiting from lower GST -- are moving more slowly.
In Lajpat Nagar, one of Delhi’s busiest markets, electronics retailers are also reporting stronger numbers. “After a slow start to the week, we are seeing especially good traction on TV sales as companies have prominently advertised the reduction in prices. Sales of small home appliances and digital items like phones and laptops are also picking up, supported with good offers,” said an executive at a major electronics store.
Jewellery retailers, despite high gold prices, are equally upbeat. “We are going in with all guns blazing and are expecting a good December quarter, which will have the festival and wedding season. Steps taken on GST will put more money into people’s hands, which will also get them in the mood to spend,” said Arun Narayan, senior vice president at Tanishq, part of Titan Company.
