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Created by : vasant srinivasan, Retail Head  | 10 06 2008 08:02:46 +0000
Industry : TextileFunctional Area : India(Markets)
Activity:  1073 views;  last activity : 07 06 2010 20:18:09 +0000
 
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PRE-DIWALI SALES TAKE A KNOCK; RETAILERS ON EDGE
Mumbai
The Economic Times (Mumbai edition)

The festival of lights is turning out to be a dark period for the retail sector.

Retailers, who are already suffering the impact of an overall meltdown, fear their peak Diwali sales could be severely hit following the arrest of Maharashtra Navnirman Sena chief Raj Thackeray on Tuesday, which sparked off riots across the state.

On Tuesday, attendance in many offices in Mumbai remained thin while restaurants and malls wore an empty look as MNS party workers went on a rampage and attacked trains, buses and other means of transport. “It was a complete washout on Tuesday... not many customers walked into our shops,” a Mumbai retailer said.

The four-week Diwali season begins in Navratri and generates close to 30 percent of total yearly sales for retail companies as customers spend their yearly bonuses. But a pullout by foreign institutional investors from the Indian stock markets has wiped out almost 50 percent of wealth from the stock markets and led to the BSE Sensex falling from 21,000 points as on January this year to 10,683 points as of Tuesday.

Retailers say the loss of wealth following the stock market crash is hurting sales of everything from electronics to cars. Though car sales bounced back in September after two months of decline, not many are enthused that the sales would be as good as previous years.

Consumer goods marketers are disappointed over the loss of what they called a ’critical business opportunity’ on the eve of the festive season. Customers across retail outlets including that of durable, fashion, apparel and general merchandise kept away, hurting the overall business sentiments.

“After a fabulous weekend where sales figures shot up sharply, today was quite a disappointment. Obviously, nobody wanted to step out with their families to make purchases,” said Ajit Joshi, CEO of Tata-owned Infinity Malls, which sells electronics goods under the brand `Croma’.

Inventory management has become an area of great concern for retailers dealing with high operating costs. “Given the tough market conditions, we want to make sure that daily inventory levels are as efficient as possible. Due to the riots, we expect sales to be almost nil today,” said the proprietor of a leading durable chain in Mumbai.

“Consumers had begun to get back into shopping mood during the past few days, But today’s law and order concerns upset that momentum,” said Kishore Biyani, CEO of Future Group.

The industry, however, has not lost hope. “We just hope this rioting will stop by tonight and sales will pick up by Diwali which falls next week,” said Joshi.


By vasant srinivasan, Retail Head  10 22 2008 08:34:50 +0000
 
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Vasant,This is temporary but I don't see a rapid decline because India’s consumer demand is simply unstoppable. I feel Indian middle class shoppers will be the key driver in this situation. Despite global turmoil , our domestic consumption will lead the cash-register assault...
By Virena Dave, Sales/BD Manager, Madura Garments  10 23 2008 06:34:32 +0000
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Mr.Rajkumar i definitely agree with you.All the sectors have been hit hard by the global economiv slowdown and retail business is no exception.It can be seen from the fact that the sales of the products have declined drastically and still there is no idea of when it will improve.But one thing i can say that the indian retail business will recover than any other sector because of the scope for growth in this industry.

what do you say?


By James Masih, Product/Brand Manager, FedEx  | 04 09 2009 08:07:38 +0000
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the present meltdown is sending  wave of fright and apprehension to those who have stable job/earning leading to tightening of their purses for uncertain future. hence those who can buy are also not buying ---E.g  govt. employees who are expecting their arrear  payments of sixth pay commission are on saving mode and not contributing to push up the market.

Others who were holding FAT purse are the worst lot as they either have lesser income if still holding a job or liabilities are overweighing their income source.

The corporate world is using this situation to lessen their salary burden by going for massive cut in salary or headcount,eventhough their senior exec. may still be going first class.


By rajkumar , Head/VP/GM-Marketing intercontiprojects pvt.ltd  | 01 26 2009 13:47:12 +0000
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I don't agree with you virena, our economy is proving extremely challenging for retailers as utility, grocery and petrol prices rising together with the credit crunch and the threat of redundancies, retailers are finding it increasingly difficult to ensure consumers keep spending. Consumers have been tightening their grip on their purse strings for quite a while & retail sales are not doing well at this point of time...
By Shailena Varma, Logistics Manager, Target  | 11 03 2008 09:37:38 +0000
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there definitely seems to be a huge impact of the global economy crisis and inflation within the indian markets and retail which was considered a sunrise sector suddenly seems to have lost all glitter with retailers of all formats/brands seemed to have rolled back their expansion plans -this is getting unsustainable as every retail company seems to have overstretched by blindly following their contemporaries....the realty boom which spiralled the rentals through the roof are yet to comeback to normalcy-  at this rate coupled with the sluggish markets, i am sure retailing even during the current festive season is giving lot of jitters to new entrants and brands...  
By vasant srinivasan, Retail Head  | 10 06 2008 08:02:46 +0000
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One could see this was going to happen. No crystal ball was necessary but the point here how India can emerge out of this turmoil without much damage. True, stock markets have plummeted beyond recognition but they directly affect only 2 to 3% of the country’s population. Of course, there will be indirect pain for everyone to bear. I guess retailers should plan out to pass the cost to consumers with attractive schemes as Indian People hold to traditional mannerism & they will go out for shopping on the eve of festival occasions.... 
By Prem Pal, Sales/BD Manager, Madura Garments  | 10 23 2008 05:47:16 +0000
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Yes I agree It will affect In dian Economy also .

Retail is also not getting good momentum at this time .

Let the time pass by

 Regards

Deepak D


By Deepak , Actuary Manager, emmral  | 10 06 2008 09:26:46 +0000
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