End-Of-Season Sales Arrive Early As Cricket World Cup Adds To Slowdown Woes

For shopping malls and retailers, subdued demand in June and early July had an unlikely contributor: the cricket world cup.

Virat Kohli and Co. were upstaged in the semifinals by New Zealand, but not before they kept Indians indoors watching Rohit Sharma’s batting and Jasprit Bumrah’s yorkers. Five of India’s nine round-robin league ties were on the weekends.

That, according to a report by Edelweiss, was a sentiment dampener for retailers as it reduced weekend crowds—and business. Like-to-like stores sales at Lifestyle, Max and Splash retail stores, said Vasanth Kumar, the chief executive officer of Lifestyle International Pvt. Ltd., were “flat” during the world cup.

As it is, Indians have been buying less of cars to shampoos since the demand began faltering after summer last year on lower discretionary spending. And the economy expanded at the slowest pace in 20 quarters in three months through March as private investments and exports slowed.

To prod shoppers out of their homes, retail chains and shopping malls rolled out end-of-season sales earlier than usual this monsoon. And discounts are deeper than last year.

“Demand has been weak since the end of January sale season and sales were dull in February and March,” Mukesh Kumar, CEO of Infiniti Malls, told BloombergQuint. While demand did pick up in May and June, it wasn’t as strong as expected, pushing retailers to start the sales season earlier, he said.

Most retail stores at Infiniti Mall in the northern suburb of Malad, including Reliance Retail, Marks & Spencer, Zara and Westside, offer “50 percent off”. Similar discounts are being offered by outlets in other parts of the city.

Apparel retailers are expected to clock relatively soft same-store-sales growth, Edelweiss Research said in its pre-earnings report, adding growth will be driven by new stores. “The early start of End of Season Sale (June 13 this year versus June 21 last year) and sustenance in store network expansion will aid revenue growth,” the brokerage said in the report.

Lalit Agarwal, chairman and managing director of the retail chain V-Mart Retail Ltd, said June was not a great month in terms of sales due to which retailers were forced to start the sales season earlier this year. The discounts this sales season were higher by 7-8 percent year-on-year, according to him. “The economy didn’t do well, and retailers were unable to clear their inventory.”

Advancing sales by a few days isn’t anything new though.

Sale periods have been starting earlier for the last few years, according to Kumar of Lifestyle International. “There’s an overall growth but like-to-like sales have been flat,” he told BloombergQuint. “We’ve been witnessing a mid-single digit growth driven by expansion of stores.”

Oberoi Mall, located in Goregaon in suburban Mumbai, said it didn’t witness a slowdown. Anuj Arora, general manager at the mall, told BloombergQuint that they have seen sales grow in “high single-digit to low double-digits”.

Corrects an earlier version that misstated the designation of Vasanth Kumar.