I-Day boost: Discounts drive 8-10% sales growth; executives eye stronger festive season
Industry executives say the revival in entry-to-mid segment demand has raised hopes of a strong festive season ahead.
Electronics, particularly in affordable categories, along with groceries and apparel have seen healthy growth. Restaurants, too, are reporting higher sales as malls draw more visitors, helped by new film releases and a surge in in-home dining orders.
'After several months, there is good demand for entry to mid-segment products,' Nilesh Gupta, director at electronic retail chain Vijay Sales told ET.
'Walk-ins are good and there is over 8% jump in sales value over last year, which is better than last year,' he added.
Electronics makers and grocery retailers ran promotional offers around Independence Day eve, one of the biggest consumption periods outside the festive and Republic Day seasons.
At Reliance Retail, sales grew in double digits, according to an executive.
Haier India president Satish NS told ET that the electronics manufacturer's Independence Day sales were up more than 20% over last year, with 'most categories driving sales.'
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On the ecommerce front, Tata-owned BigBasket reported a 42% on-year jump in patriotic merchandise sales on Friday, alongside strong demand for electronics, including the new iPhone 16.
Malls also recorded a surge in traffic during the long weekend. Theatres are seeing back-to-back housefull shows for the first time since the pandemic, powered by Rajinikanth's Coolie and Hrithik Roshan's War 2.
'The crowd that comes for the movie adds at least 10% of the revenue for fashion brands, food and beverages,' said Harsh V Bansal, cofounder of Unity Group, which operates more than six malls in Delhi and Punjab.
'The next few days also look good in terms of footfall and sales,' he added.
International labels have also drawn shoppers, with discounts prompting customers to buy at lower price points. 'International brands have contributed to the growth with consumers using the lower price point during the sale to buy products,' said Muhammad Ali, chief executive, retail, at Prestige Group, which operates five malls in South India.
Those malls have reported a 15% year-on-year rise in sales.
'One segment which has not done well is Indian women's wear, which is a cause of worry,' he told ET.
Revival hopes
Retailers and brands have been under pressure for nine to ten quarters as low-to-middle-income households grappled with high inflation and weak earnings growth. Higher spending on travel and tourism further dented retail demand.
Executives, however, are forecasting a turnaround in the second half of the fiscal, supported by low inflation, soft loan rates, reduced income-tax slabs this year and good monsoon rains.
'While middle class discretionary spending was under pressure, some consumption has started and with the festival tail wind, the outlook is much better,' Anjan Chatterjee, managing director of Speciality Restaurants told ET.
He said that Independence Day demand trends have been 'reassuring, with a 15-18% year-on-year growth.'
The government on Friday also said GST rates will be rationalised by Diwali to boost consumption, improve affordability and make essential as well as aspirational goods more accessible to a wider base of consumers—moves expected to spur further demand.
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