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Demand for apparel, FMCG, gadgets fires up festive sales

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Early data from Retailers’ Association of India indicated an uptick in demand for apparel, electronics and footwear. bloomberg (Bloomberg)

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NEW DELHI : Consumer goods companies posted strong sales during the festive season as they shrugged off weak demand in the weeks leading up to Diwali.

Retailers of home appliances, fast-moving consumer goods (FMCG) and clothing said customers were flocking to showrooms ahead of Diwali.

Electronics chain Vijay Sales saw growth in volumes as well as value this festive season, compared to last year, with consumers buying TVs, microwaves, cell phones and computers larger laptops. Sales increased for entry-level and high-end electronics and appliances, a senior executive said.

“Overall, this festive season has been extremely good. We recorded a growth of almost 15% in sales. After a long period, we have also seen volume growth of 10-11%. Only two categories, air conditioners and refrigerators, were flat primarily due to weather conditions. Apart from these, all other categories have grown and performed very well,” said Nilesh Gupta, Director of Vijay Sales.

Most shoppers used the easy monthly installment option even as companies handed out promotions such as cash back and freebies, Gupta added.

Packaged food company Parle Products saw a 6-7% increase in sales volume this festive season, largely due to people renewing their purchases after two years of covid-induced shutdowns and subdued festivities, a said Mayank Shah, Senior Category Manager, Parle. “Consumers were in a rejoicing mood and we saw strong demand across many food categories which increased 10-12% (growth in value) in September-October, compared to the previous year October -November (the Diwali period). Volume growth was 6-7%,” he added.

Admittedly, demand for consumer goods has been subdued as inflation has had an impact on household budgets. Companies are also reeling from the high cost of raw materials, which hurts margins.

Last week, consumer packaged goods company Dabur India said it had ample stocks of gift items such as real juice, honey and Chyawanprash ahead of the festivities. “Inventory levels in trade have been rising and trade has been receptive to these stocks,” said Mohit Malhotra, managing director of Dabur India.

Retail technology company Bizom, which tracks sales of packaged goods in stores, reported an increase in the consumption of sweets and savouries, as well as special festival foods, leading to increased sales of packaged goods. basis during Diwali. However, personal care and beverages saw a sequential decline in sales.

“Food consumption and party favors helped boost FMCG product sales during festival season. We saw consumers stage revenge festivities that helped boost FMCG sales despite the winds opposites of inflation, keeping their non-food discretionary spending relatively in check. We saw stronger growth among urban consumers who definitely had a stronger urge to go out and party compared to rural ones,” Bizom said. in a note on demand during the holiday season.

But after the holiday season, consumers will return to controlled spending until inflation eases, said Akshay D’Souza, chief growth and insights officer at Bizom.

Early data from the Retailers Association of India indicated an increase in demand for apparel, electronics and footwear. “In the 10-15 days leading up to Diwali, retailers saw 20-25% growth from 2019 levels. Clothes did well, jewelry did well. The sale of electronic items also resumed just before the festival. Some homewares have not fared so well,” said Kumar Rajagopalan, CEO of Retailers Association of India. He added, however, that concerns about high inflation persist. Retail inflation in India hit a five-month high of 7.30% in September.

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