Brick-and-mortar stores have highest sales after four years

Deep discounts of e-tailers is not working as clear as the highest ever sales made by brick-and-mortar stores in the last four years. Same stores sales in the October-December quarter were the highest on the back of aggressive promotions and strong demand for fresh merchandise.

Same store sales compare growth at outlets that have been open for more than a year and are an important indicator of consumer demand. It was seen that Shoppers Stop and Future Lifestyle recorded growth of up to 18 per cent in the quarter from the year earlier while Lifestyle International, Arrow and Flying Machine grew at a two-year high of 12-15 per cent.

Kishore Biyani, CEO, Future Group, believes that it is the beginning of the downfall of e-commerce sites since their ‘model of discounting was never here to stay’. The competition intensity, he says, has reduced vis-à-vis online.

This is a reversal of trend in 2014 when brick-and-mortar stores reported subdued sales as customers were wooed away by online discounts. This year offline stores were better prepared for the festive season. Shoppers Stop, for instance, opened up its offers under First Citizen loyalty programme to everyone. This helped them drive volume growth and value growth. As J Suresh, MD, Arvind Lifestyle Brands, which sells brands such as Gap, US Polo, Arrow and Calvin Klein, says, ‘the festive season, especially in the east, was pushed to this quarter, which added to overall demand’.

Even customers have become wary of online discounts. They know that low online prices could mean goods are out-of-season or old stock. They are finding offline stores to be credible with good products and in-store experience.