Customers thronged malls in the last few days of June as brands and retailers offered discounts and advanced end-of-season sales to clear stocks before the goods and services tax (GST) kicked in on 1 July.

Mukesh Kumar, senior vice-president at Infiniti Mall in Andheri, a Mumbai suburb, said footfalls in the last week of June were up 15% from a year ago.

“In some stores like Reliance Digital, we saw footfalls rise 6-7 times. The (end of season) sales started a week earlier than they usually do; it was more of a knee jerk reaction (to the GST rollout). With GST, retailers saw a good opportunity to clear out their stock," Kumar said.

While June footfalls at the Pacific Mall in West Delhi rose 12% year on year and sales by 20%, at the Pacific Mall in Dehradun, footfalls were sharply higher by 23-24% and sales by 15-16%, said Abhishek Bansal, executive director of the Pacific India Group. The figures were the highest seen at the two malls since their inception, Bansal said.

“We also had the highest sales since inception, and with high discounts on apparel, business in food and beverage (for instance, in the food court) also gained quite a bit." He said the food court in the Pacific Mall in Delhi had sales of Rs3.60-3.65 crore this June against last year’s Rs2.80 crore.

High Street Phoenix in Mumbai’s Lower Parel area, along with Palladium, the city’s only luxury mall, saw a 10-15% rise in footfalls and a nearly 20% rise in per-person spends in the last two weeks of June, said Rajendra Kalkar, president (West) of Palladium and High Street Phoenix.

“The sales this year have been unprecedented, way beyond our expectations," Kalkar said. “Quite a few retailers (in the mall) had advanced their sales this year by 10-15 days. We benefitted from taking our Assured Benefits sale national for the first time across all six cities (where Phoenix Malls are present), and we benefitted the most from Mumbai," said Kalkar.

Mall owners say brands and retailers may raise prices now.

“With apparel, consumption will initially fall because taxes (on apparel priced more than Rs1,000) will increase from 7% to 12%," Kumar of Infiniti Malls said. “That may last for a while. We have not seen a difference (right now), but in the first quarter, we will begin to see the difference (in prices and consumption)."

Kumar added that sales of mobile phones and white goods will also fall initially as taxes on them rise to 18%.

“However, GST will benefit consumers in the long run because input tax credit is a major incentive for small traders to get organized and into the GST (network)," he said.

“On the apparel side, I don’t think there will be that much price increase as the retailers will also pass on benefits to their customers," said Bansal of Pacific Mall. “So the price may have risen for now, but once benefits to the retailers start rolling in, we should see the costs even out," he said.

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