Sale duration of brick ’n mortar retailers getting longer
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Retail
Post demonetization, brick and mortar retailers have started offering longer duration sale of around eight to nine weeks compared to six weeks offered in earlier years. This is being done mainly to counter the discounts being offered by online retailers and counter sales decline of around 25 per cent being witnessed in most categories except grocery. The move is likely to impact margins of retailers by at least 15 to 20 percent, while sales may increase by around 20 percent, feeks Rajat Wahi, Partner and Head, consumer, retail and agri sectors, KPMG.
Longer sale period this year
Rajneesh Mahajan, Executive Director, Inorbit Malls observed that this time, the duration of sales is longer than earlier years. While around six-week sale used to take place in previous years, this time it is continuing for almost eight to nine weeks and many retailers announced sale ahead of schedule. The focus is to drive sales and recover money from the dead stock.
Post demonetisation this year sale came in early as in Novemeber sales had dipped by around 25 percent and retailers were not able to anticipate exactly how much time it would take for the situation to normalise. Since these decisions are taken at least two weeks prior as stocks have to be brought in to the store and pricing has to be decided, retailers didn’t change their decision at the last moment and went ahead with the sale.
Further, online players also announced aggressive sales in December-January
which further forced their offline peers to offer discounts. Retailers like
Shoppers Stop, Lifestyle, Marks & Spencer among others, have all come up
with discounts. As sales have come in early, it has helped retailers clock
in 14 to 15 percent higher sales in December, Mahajan added. Winter sales
kicked in from mid-December, almost a month ahead of the usual mid-January
schedule. Flipkart