It has been a mixed bag for apparel retailers in the run-up to Diwali. While the South and West markets are doing ‘reasonably' well, the North is yet to pick up.
The mood is certainly not exuberant and overall buying patterns indicate that inflation is still playing on the minds of consumers, say analysts and industry players.
Volumes flat
While sales value has gone up, thanks to the hefty price tags, volumes are flat or in some cases even lower than last year. “Increase in apparel prices over the last few months may have shored up ticket sizes, but volumes remain low. People aren't buying as many clothes as they were last Diwali,” says Mr Amitabh Suri, Senior Vice-President, Marketing, Indian Terrain.
And most of the growth is in the value segment, says Mr Arvind Singhal, Chairman, Technopak Advisors.
The South and West are shining for a few brands. According to Mr Suri, consumers tightened their purse-strings after the end-of-season discount sale which ended mid-August. “For three weeks after the season sale, there was a crash with very little buying. But the market has picked up in the last three weeks leading to Diwali, especially in the South and West. We are seeing a 125 per cent growth over the same period last year,” says Mr Suri.
“Typically in the North, people couple Diwali shopping with winter-buying. With winter yet to set in, people are still waiting before they stock up for the cold months,” says Mr J. Suresh, Managing Director, Arvind Brands.
Ms Rachna Aggarwal, CEO, Indus League, says, “Last year, we started selling jackets and suits for winter in the beginning of October itself. Besides the delay in winter, marriage dates have also been pushed to the end of December.” The East, too, hasn't picked up after the puja season, she adds.
Ethnic wear
The North is also more skewed towards ethnic wear during Diwali, unlike the South. Hence, western-wear brands may not have a big role to play, says Mr Suri.
What happens after the festive season holds the key to retailers' fortunes. But Mr Singhal, of Technopak, fears the market will depress further.
The South is likely to collapse after Diwali before picking up during Pongal in January, says Mr Suresh. “We hope the northern markets will start spending after Diwali.”