PRE-DIWALI SALES TAKE A KNOCK; RETAILERS ON EDGE
The Economic Times (Mumbai edition)
vasant srinivasan, Retail Head
10 22 2008 08:34:50 +0000
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.
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...
Virena Dave, Sales/BD Manager, Madura Garments
10 23 2008 06:34:32 +0000