Christmas and New Year sales volume may drop by at least 20 per cent for retailers in Mumbai as fear-stricken customers continue to avoid malls, stores and other crowded areas in the country's commercial capital.
The grim outlook comes close on the heels of weak sales during the festival season of Dussera and Diwali as the global economic slowdown forced consumers to curb purchases.
During the November 26-29 assault on Mumbai, terrorists claimed the lives of over 160 people and injured at least 300.
In the days of the terror attacks, footfalls at malls and other retail stores in Mumbai dropped by about 20 per cent, hurting retailers. Analysts said the impact of the attack was felt even at malls or stores situated about 30 km from the terror sites, which included the Taj and Oberoi-Trident hotels.
“Footfalls in our mall have dropped to 30,000 a day from 36,000 earlier after the attack. We have beefed up the security but people will take time to come out of this shock and the festive season this year will not be like that of last year,” said Vikas Oberoi, managing director, Oberoi Construction that owns Oberoi Mall in Goregaon, a suburb of Mumbai.
Weekend sales at Shopper's Stop fell 12 per cent in Mumbai after the terror attack in contrast to a 5 per cent increase in the remaining part of country, according to a report released by Morgan Stanley. Shopper’s Stop, which is into high-end fashion and lifestyle retailing, has its chain of stores at least 20 km from the site of terror attacks, the report said. “People are not coming out of their homes and it is natural that our sales would be impacted,” said Govind Shirkhande, chief executive officer, Shopper’s Stop.
During the November 26-28 period, sales at malls and stores in the rest of India grew by 15.1 per cent with lifestyle retailing growing by 10.8 per cent and value retailing growing by 16.5 per cent, the report said. According to Arvind Singhal, chairman of retail consultancy firm Technopak, consumer sentiment plays an important role during festival season shopping.
“People sometimes buy just to celebrate the festival even if it is not necessary. But this season the sales will be less by 20 per cent as discretionary buying would not take place due to negative sentiment of the people,” Singhal added. Mumbai-based HyperCity Retail that has two hyper markets has seen its sales growth falling down from double digits to single digit after the terror attacks, the Morgan Stanley report said.
“We have doubled security at our stores but people are not coming to stores and we expect our sales growth to be low for the rest of the month,” said Andrew Levermore, CEO, HyperCity. Samar Shekhawat, vice-president of Spencer’s Retail, too says that the terror attacks have impacted the footfalls at their stores by at least 10 per cent. “The customer sentiment will take some time to improve as people were shocked from what happened in Mumbai.”
According to the Morgan Stanley report, Future Group’s Pantaloon stores’ sales in Mumbai declined 4.2 per cent on the weekend of the attack as compared with the previous week's sales. However, sales for its value retailing (Big Bazar) went up by 3 per cent.
“My visit to our different stores recently reflected the decline in footfalls. But our sales have been better than before as only the serious shoppers are turning up. The window shoppers are staying at home now,” said, Rajan Malhotra, head, Big Bazaar.
