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Call it a late arrival of winter or subdued consumer mood, retailers are seeing lower than expected sales growth in the days leading up to Christmas.
Like Diwali, Christmas is one of the crucial sale periods for retailers and most of the retailers saw 15-25 per cent like-to-like growth in pre-Diwali sales this year.
“It is good. But not like Diwali sales. Retailers expected more than 15 per cent like-to-like growth. Its slightly lesser than that,” said Alok Dubey, chief executive officer (CEO) of Arvind Lifestyle Brands, which sells labels such as US Polo, Nautica, Arrow and so on. However, the company is seeing total growth of 20 per cent over the past year, which is also coming from opening new stores, he said.
“Sales are above budget, but we expected explosive sales due to improved range. Jacket sales have not taken off to a great extent,” said an executive with a European group. “Women’s wear is doing good. We have to see how menswear will sell this weekend.”
Some retailers are hopeful of things to picking up from the December 20 weekend. “Pre-Christmas sales will start to pick up from the last weekend before Christmas. I am confident that it will see good pick-up,” said Himanshu Chakravarthy, CEO, The MobileStore.
However, mall developers say they are seeing good growth in footfalls and sales.
“We had a 30 per cent growth in footfalls and traffic in pre-Xmas sales,” said Anupam T, CEO, Malls, at Runwal group.
Deva Jyotula, general manager, Korum Mall said: “The footfalls and sales typically start increasing in the week of Christmas with families spending time in malls to enjoy the festive décor, to shop for Christmas and New Year and to watch new movies. A similar trend is being seen this year.”
Many fashion brands have advanced their discounted sales by 10-15 days this time around to clear their inventory. During December 2013, many brands had advanced their sale by 7-10 days to clear stock.
“Lower than expected sales is the reason behind brands starting discounts early. But it will have impact on retailers margins,” Sanjay Behl, chief executive of Raymond.
Another executive said: “Winter wear has not taken off well due to the delay in arrival of winter. That is the main reason behind early discounted sales,” he said.
