Early Festive Push: Retailers Amp Up Deals, Discounts To Spur Spending

With the festive season arriving early, retailers have lined up endless offers and higher discounts on all sorts of items — from snacks and apparel to beauty and electronics — in a bid to nudge consumers to splurge after a year of sluggish sales. Buoyed by a slight uptick in discretionary spending during the end of season sales, they are hopeful of a double-digit growth in the festive quarters after sub-5% growth in the last 12-month period.

"We are already witnessing a growing appetite for discretionary spending, so we've advanced our festive inventory planning to align with this early demand," said Shivendra Nigam, chief financial officer, Cantabil Retail India Ltd. "We expect robust sales growth in the July-September quarter, driven by early shopping. Also, we are confident this proactive approach will translate into higher conversions, generating double-digit sales growth."

Brands are planning to roll out at least 30-50% higher discounts compared with last year and double down on promotions across offline and online channels to entice cautious shoppers amid a broader retail slowdown, according to industry executives. Retailers expect a strong start to the September quarter will set the tone for a robust Diwali shopping season in October.

Online platforms like Myntra and Ajio started their end of season sales in June, much earlier this year. They are also offering 70-90% discounts on a wide range of categories. Typically, EOSS discounts are up to 60% since it is a clearance sale ahead of a new season. But brands are now trying to clear high inventories accumulated during an unexpectedly slow year. Appliances brands, particularly, are stuck with high inventories as the summer season didn't take off as anticipated. Besides stocking up early, retailers are extending their sales events to push sales ahead of the peak season.

"This year, for the first time, we’re extending Prime Day to three days, giving our members more time to discover the best of shopping and savings," said Akshay Sahi, director, Prime - delivery and returns - for Amazon's India and Emerging Markets region. The online retailer will offer up to 70% off on categories ranging from gadgets, beauty to groceries during July 12-14.

Packaged snacks maker Haldiram's has also kicked off its festive campaign early, stocking special packs for Teej, which falls on July 27. It also marks the beginning of festive season that spans through Navaratri till Diwali.

Sales across discretionary sectors slowed, dragged by inflation and urban stress. However, since May, businesses started showing signs of green shoots, according to Kumar Rajagopalan, CEO of Retailers Association of India. "Sales in May grew 7% after several months of moderate growth of around 4-5%. This uptick suggests improving consumer sentiment." He maintains an "optimistic" outlook for the upcoming festive season.

Last year, festive sales grew 7%, falling short of industry expectations of 10-12%. This year, too, the $900-billion retail industry projects similar growth. They expect favourable macros, like a good monsoon and easing inflation, as well as these early bargains by brands to unleash shopping spirits during the crucial festive season and turn around a challenging year.