Diwali Shopping Still Sluggish

While there was a 6 to 7 per cent increase in volume compared to last year in the first few days of the month which coincided with festivals, a large part of the demand is yet to hit the market.

With just a week to go for Diwali, the countdown has begun for the biggest shopping season in the country. But the mood is still not quite upbeat.

"I am cautiously optimistic on how Diwali demand pans out," said Mayank Shah, vice president at Parle Products.

Typically, shopping picks up momentum two to three days before Diwali, according to Shah. "It is too early to say anything at this point."

He explained that while there was a 6 to 7 per cent increase in volume compared to last year in the first few days of the month which coincided with festivals, a large part of the demand is yet to hit the market.

The recent festivals witnessed some revival in demand across fast moving consumer goods (FMCG) and other segments, but the shadow of inventory pile-up remains.

A distributor from the west region pointed out that supply chain is filled with inventory, and it is not picking up as per expectations.

Inventory days have doubled from 15 TO 20 days, which is the regular stock with distributors, he added.

The retail side tells a similar story with all eyes on Diwali and beyond.

Unseasonal rains impacted consumer durables sales

Manish Kapoor, CEO at Pepe Jeans India, said there have been phases of consumer splurge, but the trend is not consistent.

"While full price is doing well, I will still wait for the next eight to ten weeks before saying that demand is back."

So far, Pepe Jeans India has seen double-digit growth in value and high single-digit growth in volume during the festive season that just went by.

Stating that demand was under stress till September, Retailers Association of India CEO Kumar Rajagopalan is hoping that the revival witnessed in early October will continue.

"The revival needs to hold up till after Diwali," he said.

According to Rajagopalan, retailers have seen double-digit growth in October so far.

Demand, which was lacking in the sector, started to emerge during the end-of-season sale in the run up to the festive season.

In consumer durables, demand was a bit impacted due to unseasonal rains on Dusshera, said Nilesh Gupta, managing director at Vijay Sales, a popular consumer electronics and durables retail chain.

Apparel and fashion retail chain Lifestyle found festival demand to be good with like-for-like growth in high single digit and overall growth in double digit.

Devarajan Iyer, CEO at Lifestyle, said he expected the October-December quarter to be a strong one as it also includes wedding dates in November which will support demand even post Diwali.

Feature Presentation: Ashish Narsale/Rediff.com