Mixed festive season as shoppers seek discounts, cut back on spending

  • Value-conscious shoppers cut back on spending because of higher prices, scout for better deals and rely on EMIs more than usual to buy clothes and large appliances.

Suneera Tandon
Published30 Oct 2024, 07:32 PM IST
Most consumer goods makers who announced earnings last week said demand in large urban markets softened in the September quarter. (Photo: Bloomberg)
Most consumer goods makers who announced earnings last week said demand in large urban markets softened in the September quarter. (Photo: Bloomberg)

New Delhi: Retailers and consumer goods makers witnessed a mixed festive season as value-conscious shoppers cut back on spending because of higher prices, scouted for better deals and relied on EMIs more than usual to buy clothes and large appliances.

More Retail said demand for staples, sugar and confectionery products consumed during the festive season remained strong, helping the food and grocery retailer clock over 20% jump this festive season over the previous year. More has over 750 stores pan-India.

“We are seeing a period of inflation coming; edible oil prices are up,” said Vinod Nambiar, managing director, More Retail. “We are up 50% over last year in September and October. The September quarter was good, and the momentum seems to be continuing in October.”

But Nambiar said consumers are buying when they see value. “We do see consumers using our loyalty program for buying high-value, high inflationary products,” he said. “Our conclusion is that because we are giving value to ... loyalty shoppers, they are giving us larger baskets."

Electronics retailer Vijay Sales said the festive season could have been better even as it reported 7-9% growth over the previous year.

Also read: This festive season’s top trend: online brands comfortable in their own skin

Demand was led by premium products across categories of home appliances, said Nilesh Gupta, managing director, Vijay Sales. “It could have been better, but we are not entirely disappointed with the festive season. Growth was seen across electronics and cities. Overall, consumer sentiment for home appliances remains positive.”

Gupta said consumers used more equated monthly installments (EMI) options to buy large appliances.

India's festive season that runs from September to mid-November is a critical period for retailers, especially those selling apparel, gold, gifting items and durables. But consumer goods companies have seen demand moderate.

Spending less

Most consumer goods makers who announced earnings last week said demand in large urban markets softened in the September quarter. They said high food inflation and increased competition is adversely impacting how consumers spend their money.

“We saw the surge starting sometime after the Navratri. However, despite high traffic at malls and high streets, we did not see it convert into heavy shopping,” said Sidhant Keshwani, founder and CEO, Libas. “While business was good; we are a little short of our internal targets.”

Also read: Advertising sentiment remains subdued during festive quarter

Keshwani said consumers turned more price-sensitive with sales growing in line with aggressive discounting. Shoppers also spent less money per transaction compared to the previous festive season. The shopping is more need-based, and buyers are not necessarily splurging this festive season, he said.

Gold jewellers reported a similar trend after the recent surge in prices. Last week, Mint had reported that jewellery firms cut making charges and offered lighter pieces this festive season to lure shoppers who may be spooked by higher prices of the yellow metal.

Retailers such as Tanishq, Senco Gold and Diamonds and Kalyan stepped up offerings this season.

“We have witnessed steady foot traffic this Dhanteras,” said Ramesh Kalyanaraman, executive director, Kalyan Jewellers. “Despite higher gold prices, demand has remained strong. Conservative buyers favoured shagun coins, while lightweight or 18k (carat) jewellery attracted younger shoppers. With the upcoming wedding season, we also saw interest in elaborate pieces.”

Mall developer DLF, concerned about moderating urban demand, ramped up events within its properties this festive season.

Also read: Dhanteras: Why buying gold coins for investment is not a good idea

“We did a big shopping festival; this helped jewellery, ethnic wear and food and beverages retailers see an increase,” Pushpa Bector, senior executive director and business head, DLF Retail. 

Bector said festive momentum this season was definitely low. “Diwali came early, there was a big concert in Delhi, so there was too much packed in a short span of time. While we saw the festive rush it was not a mad rush.”

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First Published:30 Oct 2024, 07:32 PM IST
Business NewsIndustryRetailMixed festive season as shoppers seek discounts, cut back on spending

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