Same-store sales growth in March-end cheers apparel retail

Same-store sales growth achieved by top apparel retailers at the end of March 2014, compared to the FY13 figures has brought much awaited respite to the apparel retail scene. Despite deterrents like high inflation and low consumer sentiment, sales growth at store

saw a healthy 10-20 percent rise against 6-8 percent, last year. Same-store sales at stores that were operational last year were driven by the heavy discounts offered by retailers as well as various initiatives like focus on fast fashion. Same-store sales are considered as an important indicator of consumer demand and state of the retail industry.

Heavy

discounts yet strong recovery

Though most apparel retailers had to continue with the trend of offering heavy and extended discounts, they also recorded strong recovery in volume as well as transaction size that increased by around 10 percent. Shoppers Stop, for example, reported a 10.2 percent like-to-like sales growth in FY14 over 8 percent a year before. Also, Reliance Retail's fashion and lifestyle segment posted 20 percent like-to-like growth compared with 8 percent in FY13.

High fashion quotient, quick deliveries from factories to shelves, better inventory management were some of the factors that led to recovery at the financial year end. Another apparel retail chain, Lifestyle International posted 15 percent same-store sales growth in FY14 over 4.5 percent in the previous year. Fashion being a high margin category is in the focus since experts feel shoppers spending more on fashion products and apparel signal at early shoots of revival.

Retailers’ efforts pay off

Despite political uncertainty, high inflation and economic slowdown keeping consumers on their toes, a recent global study by market research firm Nielsen shows that India continues to be the second most optimistic country in the world and recorded its highest confidence level since the fourth quarter of calendar 2012. It further states that India's consumer confidence level increased six points in the first quarter of the current calendar year (January-March) with a score of 121.

The apparel retail industry has been facing the brunt of the economic downturn for a couple of years with consumers moving away from shopping. Even steep discount periods had to be extended to woo customers. Now, with new government taking charge at the Centre with promises of rapid economic development, retailers are hoping for a sharp positive turnaround in the current scenario.

Simultaneously, retailers and apparel brands are putting in efforts such as in-store events as well as launching and promoting private labels to drive sales. Lifestyle International, for instance, signed Deepika Padukone to endorse its private ethnic wear brand Melange and Shoppers Stop added over 4 lakh members to its First Citizen loyalty program, a significant number considering that over three-fourths of sales come from members.

They are also wooing customers with latest Spring/Summer range. The brands and apparel retailers have not only launched their new designs for the season but they have also changed the in-store layouts and look to match them apart from engaging the customers through various activities, social media campaigns and commercials on print and TV.