Retail Industry May See Full Recovery In October-November Period
As the festive season continues, RAI (Retailers Association of India) has shared the retail sales figures for September 2021. For the month, sales stood at 96 percent of the pre-pandemic levels (September 2019). Moreover, compared to September 2020, 26 percent growth in sales has been observed in September 2021.
In fact, in categories, consumer durables and electronics, food and groceries, and quick service restaurants (QSR) have fully recovered and are indicating double-digit growth on pre-pandemic levels. Sports goods and apparel have also started to pick up pace as socializing and offices resume and some level of normalcy returns. Only the beauty and wellness category, which includes salons, footwear, and jewelry, are yet to catch up to the pre-pandemic levels of sales.
Given the trajectory on which the market is headed and with Dusshera and Diwali festivities on the way, if the pandemic does not create another wave, it is likely that the retail industry may experience a full recovery to the pre-pandemic levels.
Kumar Rajagopalan, CEO, Retailers Association of India (RAI) says, “People haven’t been able to celebrate festivals with usual fervor due to the pandemic. As normalcy resumes, we expect people to go all out and enjoy festivals by dining out and shopping for themselves as well as for their loved ones.” “
Since the festivals this year fall in the months of October and November, we can definitely expect vibrant sales during this period and even recovery provided the pandemic doesn't create a new wave,” he further adds.
Reasons For Recovery
A confluence of several factors can be cited for the reduction in de-growth experienced compared to last year (cite the graph for region-wise growth stats). We are seeing, for instance, retailers and financial institutions like banks and card issuers offering attractive credit schemes like buy now pay later.
“Positive sentiments coupled with consumer credit is encouraging people to go and buy all the things that they couldn’t buy due to the lockdown, which helps propel retail,” Rajagopalan said.
A common observation is that as restrictions loosen, many stalled occasions like marriages or other revelries being held again, which directly leads to increased buying.
Also, the pandemic has largely impacted the buying experience of the shoppers with retail outlets relying on the omnichannel medium to provide a better omnichannel experience. This again is likely to impact the sales.
Rajagopalan stated, “Omnichannel retail in the country has matured in the past year and a half and consumers have now comfortably accepted it as part of life. It is helping consumers to discover products at home but buy offline, bringing back footfall to the stores.”
Myntra in its Big Fashion Festival saw a record 52 million visitors and over 8 million orders across categories. Snapdeal, India’s leading value e-commerce company today shared that its overall sales volume in its first Toofani Sale of the season went up by 98 percent compared to last year. Similar observations were made by other e-tailers as well they conduct their festive sale.
On-ground developments are not much different as we see malls and roadside outlets are attracting buyers in mobs. Famous South City Mall in Kolkata, for instance, had recorded a footfall of one lakh in Mahalaya and the weekends. Similar reports are expected from such outlets in other metro cities as well.