IndiaRetailBiz

Consumers are returning to retail stores with a vengeance. Diwali, which this year was celebrated about a fortnight or so earlier than usual, brought cheer back to faces of harried retailers.

Compared to the boom year of 2007, which had seen a large number of serious and non-serious players entering the sector, the year 2008 turned out to be quite tough. Global financial meltdown, which also resulted in loss of jobs and evaporation of retail credit in India, many retailers were forced to shut down a few or all of the shops in the face of falling footfalls and declining purchases.

The retailers were, therefore, cautious this festive season in projecting growth. While, they would have been happy achieving growth of around 15 to 20 per cent, were pleasantly surprised to see the growth of over 30 per cent, sometimes even going beyond 100 per cent.

Most interestingly, festive season, which began two months ago from early September with Onam festival in Kerala, according to media reports, has seen consumers buying not only apparel and fashion items but consumer durables and home improvement products, as well. These categories were incidentally most affected last year as there was a decline of business in home retail category.

While, Samsung saw the growth of 40 per cent growth, the growth for LG– another Korean consumer electronics and home appliance rival– was equally happy with over 40 per cent increase in home appliances business.

Both LG and Samsung, who between them control large part of durables pie, saw nearly one-third of their overall annual sales coming from festive season. For Samsung it meant $700 million (or 35 per cent) of targeted $ 2 billion sales during the year. LG, on the other hand, while not revealing exact figures, was quite happy with most of its products like washing machines, micro ovens, and LCD TVs doing very well in the market place.

Kishore Biyani-led Future group, which has been facing the spectre for over a year of declining same-store-sales in the home retail segment, the turnaround has been most satisfactory. The retailer, which operates retail chains like Home Town and e-Zone in this segment, saw quite happy registering a growth of 5 to 7 per cent in home products like furniture and 20 to 30 per cent in consumer electronics.

“The home segment recovered in this festive season. It showed a positive growth of 5-7 per cent. In electronics, we saw a 20-30 per cent jump in sales,” said Kishore Biyani, CEO, Future Group.

The group, which had targeted Rs 500 crore worth of sales during the week beginning 15th October, has already crossed targeted growth of 24 per cent. According to Rakesh Biyani, Chief Executive (Retail) of Future Group, “Consumer sentiment looks very positive and there is good traction in sales.”

Reliance Retail too has witnessed month-on-month growth of around 35 per cent in consumer electronics, home appliances and IT related gadget categories, among others.

Shopper’s Stop’s Vice Chairman B S Nagesh is also satisfied with positive consumer sentiment and is positive on the next two quarters. While, the retailer has seen increased spending on non-apparel, jewellery and cosmetics, it is also satisfied with stable business for apparel category.

Pantaloon Retail, part of Future group, and Reliance Retail have also seen improved business in apparel business this festive season. While, Pantaloon has witnessed 20 per cent growth in its fashion segment, Reliance is happy with growth in this category.

Vishal Retail, which for past few months has been facing lot of financial stress, is happy with 20 per cent growth in festive sales. It is confident of touching growth number of up to 35 per cent before the end of the season.

We hope to further cover festive performance of other important — large and small– retailers in the coming days.