Diwali is considered to be the most auspicious time to purchase new items. People generally push their purchases towards the festival. The spurt in sales usually starts two months ahead of Diwali and peaks just a weekend ahead of the festival.
What is different in the ongoing festive season, however, is that the consumer sentiment is weak. "The peak that used to start ten weeks before Diwali picked up only ten days before the festival," pointed out Rajiv Malla, CEO, R City Malls by Runwal Group.
This has led to lower industry-wide sales. "The consumer sentiment is muted and this has got further diluted by rains, especially in Maharashtra and Karnataka that has led to lower footfalls in the malls," said Malla.
"We are hoping Diwali to be positive; not as positive as we had anticipated but definitely not as bad," he says. Last year, the increase in sales in their malls was in double-digit but this year it is expected in the range of 7-8 per cent.
However, sales in the weekend just gone by brought cheer to the retailers. According to him, categories such as designer wear and fashion wear whether it is footwear, kids fashion, men fashion, watches or sportswear are growing by almost 18 per cent.
Pushpa Bector, Executive Vice President and Head, DLF Shopping Malls, who is responsible for five properties across Delhi-National Capital Region (NCR) and Chandigarh (such as DLF Mall of India, DLF Promenade, DLF Place, DLF Cyber Hub and DLF City Centre) agrees. "There is an increase in footfalls and sales. Last year, footfalls in Mall of India, Noida stood at 1.9 lakhs during the pre-Diwali weekend, 21 per cent more than the preceding year. There was a sales growth of 12-14 per cent across categories vis-a-vis the preceding year in five malls that she handles.
"Discretionary spends such as cars are being held back but people don't want to dip their quality of life so brands in clothing and food are growing. People who change wardrobes continue to do so. They continue to eat out and are not holding back on these spends," says Bector.
No wonder fashion jewellery brand Voylla has seen good growth over the last year. "In each of our 160 stores across 80 cities, there is a 50 per cent increase in sales during the festive season," says CEO and Founder Vishwas Shringi.
"Media and Bollywood have done a fantastic job in making people aware on the need to look and feel good and youngsters today are on a quest to look better. They want to buy from the organised segment that promises quality, so the branded fashion jewellery as a category is growing," says Shringi.
Even sports and active-wear are growing. Sales at Puma stores have grown at 30 per cent across online and offline channels, says its India MD Abhishek Ganguly.
"There is a general shift in consumer buying and usage behaviour where they are spending a lot more than before on wellbeing, which is why active-wear, sportswear and sports-gear are doing extremely well," he says.
It's a mixed bag for brands in the discretionary category. Ravi Saxena, MD of Wonderchef says there is a 1-2 per cent degrowth at the overall industry level. Although there is a growth of 6 per cent in the space as per their survey, price increase has taken its toll. "There indeed is growth, but there was a price increase of 7 per cent last year due to inflation and an increase in dollar value due to fuel prices. So, if you compare volume-to-volume, there is a degrowth of 1-2 per cent for the industry."
Premium brands are unaffected, though. Wonderchef that is also owned by celebrity chef Sanjeev Kapoor has cookware and home appliances. "Buyers of premium products are not impacted by sentiment or challenges in the economy, so our brand is growing. There is growth but is not as much as we had planned." The company had expected a sales growth of 25 per cent this Diwali, but it is likely to come in at 16 per cent.
Kamal Nandi, Business Head and Executive Vice President of Godrej Appliances echoes Saxena's perspective. He says, with overall muted sentiments due to economic slowdow, Godrej Appliances has witnessed a subdued response this festive season. "Overall, trade partners across the country indicated flat sales over last year till now, but some spike is expected in the current week - being the final run up to the festival."
But, Samsung is excited. Forty per cent of its overall consumer electronics sales are generated during the festive season. It expects double-digit growth across the category. Raju Pullan, Senior Vice President, Consumer Electronics Business, Samsung India says, "We expect to clock double-digit sales growth across its consumer electronic products. We expect our premium segment to drive strong sales in appliances and television category specifically."
Pullan believes that Samsung will continue to ride the growth wave in the TV market for this festive calendar. He expects three times growth compared to last year. "For the season we aim to achieve a market share of 60 per cent in the 55-inch and above TV category from current 48.5 per cent and maintain 82 per cent market share in 75-inch and above TV category."
Even consumer durables company Usha International is positive. Kapil Kohi, President, Retail, Usha International says, "We have seen a double digit growth in the last couple of months and expect this growth to continue well into the festive season, given that there is always a spurt on Dhanteras and Diwali. We are aggressively pushing sales on e-commerce platforms as well as big retail chains with major focus on meeting demands of our consumers by providing great offers across all our categories."
(With inputs from Nidhi Singal)