As the Dusshera-Diwali festive season approaches, Indians are displaying restraint in their clothing purchases compared to last year. Factors such as inflation and economic concerns have contributed to a subdued market atmosphere, leading to sluggish sales and increased reliance on discounts.
Merchant Pessimism and Sales Projections
According to a survey conducted by the Clothing Manufacturing Association of India (CMAI), merchants are expressing widespread pessimism about festive season sales. Approximately 78% of respondents anticipate a decline of up to 25% in sales compared to the previous year. The survey also highlights a shift in consumer preferences, with 50% expecting children’s wear to lead sales, followed by 36% for women’s wear, and only 12% for men’s wear.
Rahul Mehta, chief mentor of CMAI, attributes this slowdown to the broader domestic garment sector’s performance over the past few months. Despite the current challenges, Mehta anticipates a market rebound post-Diwali, especially with the extended wedding season ahead.
Impact of the Pandemic on Growth Trajectory
Pepe Jeans India acknowledges a tapering of growth compared to the pandemic-era surge in sales. While the brand experienced a remarkable 55% sales increase in 2022, this year’s growth is expected to range between 12% to 18%. Manish Kapoor, MD & CEO of Pepe Jeans India, emphasizes the subdued nature of this year’s festive season sales, with the true impact yet to be seen.
Role of Discounts in Stimulating Sales
With consumer sentiment dampened by inflation and modest salary increments, discounts have become a crucial driver of apparel sales. Arvind Fashions, one of India’s leading apparel companies, witnessed a 9% like-to-like sales growth, primarily fueled by discount-driven promotions. Similarly, Shoppers Stop resorted to increased discounting to stimulate demand amidst a weakened market environment, impacting profit margins.
The shift in consumer behavior and market dynamics underscores the need for retailers to adapt their strategies to navigate the evolving landscape of post-pandemic demand trends.
