By James Mathew
Gold jewellery and bullion traders see 40% fall in sales during this year's festive season
Shopping malls and high streets across various cities in India saw muted sales over the weekend before Diwali even as gold jewellery and bullion traders talked of about 40 percent fall in sales this festive season, dashing hopes of a pickup in late stage festival shopping by the retail industry.
A wet weekend due to heavy rains in southern cities such as Benguluru, Mysore and Kochi as also in Mumbai added to the woes to retail industry in India.
Diwali, a popular festival in India, especially in the north and western parts, will be celebrated this Sunday. Typically, sales growth starts picking up two weeks before Diwali.
Shop owners in Malls in Delhi and elsewhere said footfalls were significantly lower this weekend compared to the peak Diwali season last year.
“Even a large number of those who came to the mall where doing only window shopping,” a manager at the Brand Factory outlet at Pacific Mall in Delhi-NCR, told Arabian Business.
Paint industry, which is seen as a barometer of festival sales as generally people, especially in North India get a fresh coat of paint for their houses before Diwali, was also complaining of tepid sales this season.
“Sales in the current season were not all that good for us. There was no volume growth this season, though there was no pressure to offer discounts,” R Guha, senior finance executive with Akzo Nobel India, a leading player in the paint and specialty chemicals, told Arabian Business.
Gold jewellery sales were, the worst hit in this year’s festive season, dragged down by the twin factors of high prices and the general trend of customers’ deferring their discretionary spending due to uncertain economic conditions.
“Gold jewellery sales were down by about 40 percent this season compared to last year,” Surendra Mehta, National Secretary of Indian Bullion and Jewellers Association (IBJA), told Arabian Business.
Mehta said he was also not very hopeful of any pick up in the last few days before Diwali. “Either people do not want to spend their money (due to the current economic uncertainty) or they do not have money to spend,” he said.
Industry insiders said the economic uncertainty looming in India is so large now that people are just avoiding any kind of discretionary spending or postponing such spending endlessly.
Both large-format retailers and mom-and-pop stores of mobile handsets were also talking of a ‘black Diwali' this year, with sales so far being at their worst ever.
Their sales, however, were impacted by the trend of handset manufacturers tying up with eCommerce majors such as Flipkart and Amazon for exclusive launches of their latest models.
The online players, in turn, sell the handsets at heavy discounts during their grand gadget sale and shopping events, hitting business of brick-and-mortar stores, an executive with a large format handset outlet said.
Retailers are now keeping their fingers crossed for a last minute surge in sales this week, before the Diwali crackers are burst on Sunday.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.