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At malls, 'sales' start early but may also end sooner

Saturday, 11 January 2014 - 1:16pm IST | Place: Mumbai | Agency: dna

Sale, that four-letter word with the power to get even the most tight-fisted shopper to splurge, is now plastered across retail outlets at malls.

The New Year has started on a good note for the consumers with several major brands starting their ‘sale’ this week. Preview sales for select customers had started last week.

Like the previous few seasons, end-of-season sales arrived early this time – there was a time when such sales used to start in the second or even third week of January. But lack of consumer spending and slowing sales have prompted retailers to start sales early.

Deep discounting and extended sale periods have affected retailer profitability. The retail industry has been trying to reduce the quantum and offer periods of discounts. Baby steps are already being taken in that direction.

Last year, ‘flat’ discount were the rage; but now, it is the season of ‘up to’ discount offers, said Sunil Shroff, vice-president, mall operations, Viviana Mall. “This season, discounts are normal. We have seen less of ‘flat’ discounts. Instead, most brands are offering up to 20-50% discounts.”

Deep discounts helping boost volumes; but they also eat into margins. Worse, a relatively longer sale season, time has shown, was also driving away customers who are not essentially bargain-hunters.

As a result, retailers are trying to reduce the sale period. Rajneesh Mahajan, COO, Inorbit Malls, said, “Even the last end-of-season sale (July-August) was not very extended. Even this time round, we expect the same.”

Most retailers are likely to wind up the sale in 4-5 weeks. However, if the sales don’t pick up as expected, then it is likely that the sale period might get extended. In the last few seasons, sales were extended up to 7-8 weeks. Deva Jyotula, centre manager, Korum Mall, is planning to dole out Goa Holiday packages every week to attract consumers. “We are planning to start our end-of-season sale from next week when most of the brands in the mall would have started their sale.”
Retailers are worried that sales and discounts, though successful in attracting consumers, come at a huge cost.

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