Even as large corporates like the Rahejas, Piramals, Mahindras and the Nirmas jump onto the retail bandwagon, the sector itself is passing through a prolonged slump. Leading retail outlets such as Shoppers’ Stop, Westside, Crossroads, Lifestyle and others have begun 2001 on a downbeat note with thinning crowds and mounting inventory.
Discounts and price cuts of more than 50 per cent are becoming common. The recent earthquake in Ahmedabad and Bhuj, considered to be large markets, have further depressed sentiments.
Consumers have begun putting a lid on their purchases from as far back as November 1999 and so far trends in 2001 seem to indicate that things will remain the same. Discount tags of more than 50 per cent are being offered by players like Westside on home appliances, clothes and accessories.
For retailers faced with mounting stockpiles, inventory management is becoming crucial. Faced with shrinking margins, retailers have begun large-scale promotions. Most retailers are facing an `overbought’ scenario and are trying to find ways of selling the stock before it loses value.
Consumers seem unwilling to shell out money for impulse shopping. Volumes for CTVs, washing machines and refrigerators have dropped by as much as 40-45 per cent since the past three months. According to the retailers, it is not oversupply but low purchasing power that has caused the slowdown. Industry watchers, however insist that its uncertainty over the future rather than the lack of funds that’s hit buying moves. The larger retail outlets are better placed to manage inventory than the smaller ones which stock individual brands.