Retailers report steep drop in Sales after Deepavali

The Omicron scare of Covid-19 began in Jan. ’22. This was when most businesses (in Retail) where coming back slowly to normalcy. The second wave, however didn’t impact as much as it was anticipated to be. From Feb. ’22 onwards, retail sales of apparel, accessories, fashion and footwear have slowly been rising. Many categories hit a peak in Q1 FY 2223 ahead of Back2School, Back2College and Back2Work scenarios. In bigger metros like NCR, Mumbai, Chennai, Bangalore & Hyderabad, retailers reported a robust sale which many didn’t anticipate. The same trend continued in to Q2 of FY 2223 as well.

What came as a surprise for many was the festival season sale across India – starting from Onam in Kerala, Dassera in the East of India followed by Deepavali in South (mostly), Gujarat & Rajasthan in the West and parts of North India, culminating with the Chatth puja in the East, once again. Almost every category – from grocery to staples, apparel to fashion, cosmetics, household, furnishing, pretty much every category saw products flying off shelves and customers lapping up like never before. However, the party seems to have come to an abrupt end.

Sales for the month of November seems to be giving sleepless nights to retailers, small, large and extra large (incl. Hypermarkets & Department Stores). Footfalls have halved and sales have taken a nosedive. Excess stocks sent to retail stores, both fashion and grocery, seem to have few takers. This is perhaps due to an unprecedented surge in sales in October during the peak festival season.

While December is traditionally a good month for retail sales, with upcoming Christmas vacation and related travel, Retailers are treading cautiously. Grandiose business plans have been trimmed down and retailers, especially in the fashion and apparel business are less optimistic than before.

End of Season Sales (EoSS) which would usually begin after Christmas & New Year seems to have been pushed in advance over the past 2 (covid) years and this year could be no exception as well. During the year-end sale season, bill values come down by 25-30% due to lower ASP of products. Quantity surge is not on the higher side as well since shoppers prefer buying multiple brands than at one store. As it is Q4 is not the best one for Retailers, so December 2022 will be a month of reckoning for many.