Retailers expect to bounce back post demonetisation

Retailers had high expectations for the December quarter especially after a good monsoon and the Seventh Pay Commission payouts. But demonetisation hampered their plans.

Sales at apparel and accessories brand Turtle, backed by the Future Group, known for its range of men’s shirts, were down seven per cent in November versus a year-ago. Before November 8, the company had estimated a 25 per cent increase during the period. Ticket sizes also went down with the average bill size falling almost 28 per cent during the month.

Arvind Lifestyle Brands expects revenue to grow by 30 per cent this year. The aim is to be Rs 5,000 crores company by 2019. Roughly 20 per cent of its sales are done through unorganized or multi-brand retail channels. It is this portion of its business that has taken a hit after demonetisation. This sector is a lot into cash transactions – it has got severely affected because its financing, payment to workers, everything used to be in cash.

But Arvind doesn’t think end-of-season sales in December will be affected by the drop in consumer demand. The general feeling is that though in Tier II and Tier III cities people generally get scared with uncertainty and pull back their spending very quickly, in urban centers, people with cards will continue to spend since for them clothing is a necessity.