If you had visited any retail mall last month, you could not have failed to notice the crush of customers enticed by special discounts and clearance sales. Whether it is home furniture or entertainment electronics, laptops and cameras or even apparel, retailers are seeing a surge in footfalls, erasing memories of consumer diffidence around this time last year.
“Retail growth is going through high euphoria, backed by the festival period in the third quarter of 2009-10. Q4 (January-March 2010) will have occasions such as Valentine’s Day and clearance sales by retailers,” says Anurag Rajpal, vice-president, apparel, Spencer’s Retail Ltd.
InOrbit Mall at Malad reported more than a million visitors last December, and is counting on the good times continuing.
“Retail is looking very positive. Footfalls are rising and there has
been an 8-10% increase in retail sales from September 2009. Q3 (October-December 2009) has been very good for retail owing to the return of consumer confidence. We are expecting Q4 of this year to be better,” says Kishore Bhatija, chief executive officer,
Inorbit Malls
Kishore Biyani, managing director, Pantaloon Retail (India) Ltd, says that big ticket purchases such as LCD TVs and furniture are happening again.
“(Lack of) consumer sentiment is history. The 30% growth we achieved during the four-day Republic Day sale was more than expected. We are creating categories and occasions for consumers to spend. Youth categories like laptops and cameras have done specifically well for us,” he adds.
“The overall sense I get from retailers is that footfalls are increasing. The business has genuinely picked up as consumers are spending again after turning cautious for long. The job markets are opening up; there is a feel-good factor which is helping consumers spend,” says Viraj Nadkarni, sector analyst, Angel Broking.
Among others, Pantaloon Retail and Shoppers Stop have reported same-store sales growth of 11% and 12%, respectively, during the quarter ended December. Spencer’s Retail has been reporting month-on-month sales growth of 15-20% since November.
Pantaloon Retail’s formats Big Bazaar and Food Bazaar, which ran
a four-day sale styledSabse Saste Char Din, saw a big surge over last year’s footfalls.
The home furniture and furnishings segment, which was experiencing a decline in sales till July-September, 2009, has started to look upbeat again. This segment was worst affected during the slowdown of 2008-09, with double-digit negative same-store sales growth following the collapse in real estate.
“With the real estate sector picking up and consumers buying new homes, it is very obvious for home segment retailing to start growing again,” Angel Broking’s Nadkarni says.
Retailers in the home segment who had earlier shelved expansion plans are now trying to regrow the category as consumers are showing renewed willingness to buy more furniture, electronics and decor items.
Manish Parekh, director, @Home chain of home stores, is optimistic, “We are expecting to double sales compared to the November- December, 2008 period.”
However, Rajpal of Spencer’s says he is keeping his fingers
crossed for the first quarter of 2010-11. “The real test of consumer sentiment for us will be in sustaining this growth in the first quarter of the next fiscal,” he says. The budget will obviously be a key driver of consumer sentiment.
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