Consumer goods sector eyes spike in festival sales

The speed of the rebound after the devastating second covid wave has caught many companies by surprise

Suneera Tandon, Shuchi Bansal
Updated27 Aug 2021, 06:56 AM IST
Companies are drawing confidence from the ebbing of covid 2.0, a pickup in vaccinations and higher footfalls in stores and malls.
Companies are drawing confidence from the ebbing of covid 2.0, a pickup in vaccinations and higher footfalls in stores and malls.(Photo: Mint)

Prospects of the Indian economy look brighter, with consumer goods companies, including appliance, apparel and other household goods makers, expecting festive season sales to exceed pre-pandemic levels.

Companies are drawing confidence from the ebbing of the second wave, a pickup in the vaccination drive and increased footfalls in stores and malls.

“We are witnessing a gradual rise in demand for our value-proposition appliances such as smart 4K TVs, connected range of ACs, refrigerators, washing machines and other lifestyle appliances,” said Manish Sharma, president and chief executive of Panasonic India. “If the sales continue as per current trend, we hope to cross 2019 festive sales figures.”

The speed of the rebound after the devastating second wave has caught companies by surprise.

Several said the demand rebound was much faster this year once the lockdowns were lifted than in 2020. The turn in fortunes for the companies also augurs well for the economy.

Saurabh Baishakhia, president of appliances at Usha International, said the company initially saw pent-up demand, but consumers’ buying pattern is now more consistent.

“The buying is more democratic, and very secular growth is coming across all regions and business categories. We have seen this for July and August. If the current trends continue, and if we are able to materialize our expansion plans, we will be at pre-pandemic levels. I am very confident of that,” he said.

Electronics retailer Vijay Sales said festive season sales could be better than 2019 if the pandemic situation keeps on improving.

“Currently, there is a shortage in supplies, and this could be a dampener for festive sales. However, whatever stocks we are getting from the brands, we are taking in total,” said Nilesh Gupta, director, Vijay Sales.

Makers of fast-moving consumer goods (FMCG) companies have been pumping more stock into the market, especially gift packs. A 20% uptick was seen during the Rakhi festival earlier this week from last year, they said.

The second and third week of August saw an uptick in footfalls in outlets, said Aditya Goel, co-founder, Love in Store, a trade activation and execution company that works with FMCG companies and retailers in 300 cities.

Goel said festive buying has started with consumer baskets evolving to include stock-keeping units not meant just for self-consumption. These include large-sized beverage bottles and gift packs, he said.

Parle Products is rolling out a line-up of salty snacks ahead of the festive season.

The maker of Parle-G biscuits said it saw a significant uptick during the 15 August sales weekend. However, Onam was a bit muted owing to higher covid cases in Kerala, said Krishnarao Buddha, senior category head at Parle Products.

Nevertheless, it plans to increase its share in the festive snacking and gifting market.

Women’s fashion brand Madame said consumer sentiment has been steadily improving. “We’ve seen revenge tourism and now shopping has also bounced back. If the same trend continues, we expect September sales to surpass September 2019 sales on a like-to-like basis,” said Akhil Jain, executive director of Jain Amar Clothing, which sells the Madame brand.

The 2020 lockdown had shut Jain’s factories in Punjab, affecting the supply chain. This time, factories in Punjab and Haryana were fully functional. “So, we were able to pump in lots of inventories in stores. If we did not have inventory, sales would have slumped,” he added.

Value retailer V-Mart said new inventory hit the stores earlier this month. Demand emerging from its stores, typically located in India’s smaller cities, was good during the recently concluded Rakhi festivity.

However, the company is more cautious with planning inventory.

“Planning cycles are now shorter. We have improved our vendor systems, and supply chain management has become more efficient in case of any future disruptions,” said Lalit Agarwal, managing director, V-Mart Retail.

Usha’s Baishakhia said the company is trying to keep strategic inventory at locations. “Capacity has surely gone up as volumes are going up. We had done capacity enhancement plans last year. Luckily, they are falling in place,” he said.

Still, many worry that the possibility of the third wave of the pandemic may derail the gains made in the past two months.

“The only potential risk is the possibility of the third wave. With vaccination drives and increased awareness, we are hoping that the pandemic impact on sales will reduce in coming months.”

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First Published:27 Aug 2021, 06:56 AM IST
HomeIndustryRetailConsumer goods sector eyes spike in festival sales

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