Excise Relief: Retailers pass on benefits to customers

While the slow economy and rising inflation has led to low

consumer sentiment, apparel brands and retailers are witnessing a positive buying season. They have even recorded better quarterly sales and margins. Thanks to the 10 per cent excise duty exemption on branded apparels, many industry players were able to pass on the benefit to their customers. And those who did not share the excise benefit with customers too profited owing to discount strategy.

Max Retail, which passed on the excise benefit while running a three week discount season, saw a 35 per cent overall growth and 18 per cent like-to-like growth. And despite high-cost retail in spaces, margins improved . On the other hand, Shoppers Stop, which could not pass on the benefit since their merchandise was procurred before duty roll back was announced, registered a like-to-like growth of 12 per cent and margins went up by 70 basis points. Apparels segment saw a like-to-like growth of 17 to 18 per cent, which boosted the company’s margins.

Even Louis Philippe, which is not much into promotional offers, saw a like-to-like growth of 10 to 12 per cent. However, their margins did not benefit from the excise duty exemption because of a rise in raw material costs.