Pre-Diwali sales light up retailers' coffers

Spencer's Hyper in Mumbai's western suburb of Malad recorded sales of over Rs 1 crore during the pre-Diwali weekend, a 150 per cent jump in sales over other weekends. Nearly 17,000 buyers flocked to the 36,000 sq ft store. The Hindu festival is being celebrated on November 9.

Sumantra Banerjee, CEO, Spencer's Retail, estimates sales will go up 250 per cent in the current week, as consumers crowd into stores for last minute shopping.

"We used to see an increase of 50-100 per cent in Diwali sales in previous years. But this year, we have done exceptionally well due to higher purchases," said Banerjee.

India's largest listed-retailer, Pantaloon's Big Bazaar, is expecting sales of Rs 100 crore during the Diwali season, an increase of more than 120 per cent in sales over the same period last year.

Kishore Biyani, MD, Pantaloon Retail said the average per consumer spending at his stores had gone up nearly 50 per cent to Rs 1,200 .

''Our campaigns, on both television and print, did the trick for us. We have targetted all kinds of consumers and worked hard on their preferences. We got tremendous response in west and north India,'' he said.

Shopper's Stop CEO Govind Shrikhande is confident of replicating the department store's success in east India during the recently-concluded Pooja season. The retailer posted over 25 per cent sales growth over the last Pooja season.

"We can only talk about the increase in sales once the Diwali season is over. Nevertheless, we expect a growth of 30 per cent over the last Diwali season," he said.

Piramyd Retail's food and grocery format, TruMart, has seen a 35 per cent increase in Diwali sales, better than the 25 per cent increase last Diwali. Average consumer spending has also gone up 40 per cent, said TruMart CEO Upamanyu Bhattacharya.

The flavour of the season is lifestyle and fashion with Pantaloons, Shopper's Stop and Piramyd posting an increase of 25-30 per cent in apparel, accessories, jewellery and watches sales as the aspirations of the 500 million-strong middle class is changing fast for better goods and services.

Retailers have also strengthened their resources at stores to handle the crowds. "We have appointed more cashiers and front-end staff to ensure that transactions take place faster. We have shored up our information technology systems to ward off connectivity problems," said Shrikhande. Pantaloons has also appointed extra staff.

Retail analysts said that economic growth and rising stock markets have meant that consumers have extra cash in their hands to spend, in turn fuelling the retail boom.

The 30-scrip BSE Sensex jumped 51.44 per cent to 19,289.83 on Wednesday, from 12,736.82 last Diwali.

Technopak's Asitava Sen said, "There is a big up turn in the Sensex compared with last Diwali and the economy is growing like never before. Now, the middle class has more income, higher willingness to spend and even higher aspirations. On the other hand, retailers have acquired higher mass and scale and gained brand value."

Sen said that retailers have also ensured proper back-end and efficient sourcing to take care of increased demand for merchandise.

India's retail market is estimated to be about $ 350 billion and the organised retail is 4 per cent of that. According to management consultancy PricewaterhouseCoopers, organised retail in the country is growing at 30-40 per cent a year.

A recent study by Credit Suisse, a leading Zurich-based global financial services provider, said consumer spending in the country is likely to remain stable in the short-run and pick up in the last quarter of 2007-08.