KOCHI: Despite the festive spirit, Kerala’s retail market remains sluggish, with sales failing to pick up due to reduced discretionary spending. This year’s Onam festival sales have been generally subdued, impacted by heavy rainfall, the Wayanad tragedy, and a general cash shortage.
However, gold and silver jewellery sales have emerged as a bright spot, expecting a 20% year-on-year growth, with estimated festival season sales of approximately Rs 7,000 crore.
According to the Boston Consulting Group (BCG) and Retailers Association of India (RAI) report, India’s retail market has seen subdued growth in recent quarters, with a 5-10% decline in year-over-year growth. However, the market is expected to reach $2 trillion in the next decade, presenting opportunities for retailers.
Changes in consumption patterns, including the rise of online platforms and ‘premiumisation’ have also contributed to a decline in retail footfall according to experts.
Deepak L Aswani, RAI chairman (Kerala chapter) and leading apparel retailer, noted that sales have been disappointing due to factors like online retailers, big brands, and year-round discount sales.
Aswani noted, “Youngsters no longer wait for Onam to buy clothes. In the past, buying and gifting dresses were an integral part of the festival.”
Pointing out that in the past Onam sales contributed to 30-40% of the total annual sales, Jerry Mathew, MD of White Mart, a leading electronics retailer, noted that demand has been flat and consumer sentiments muted this festival season.
“Summer sales were robust due to extreme heat, driving sales of cooling equipment. However, heavy rain has led to sluggish sales. IT and mobile sales were already under stress due to online channels and other factors,” he said.
Jerry highlighted a positive trend in the white goods retail market: Premiumisation post-pandemic.
“Average sales prices have increased, with consumers opting for bigger and better products. Sales of big-screen televisions are rising, but footfall has decreased as mass market products face a dull response,” he said.
“The overall market remains sluggish,” said Abdul Hameed, president of Kerala Vyapari Vyavasayi Ekopana Samithi, Thrissur. “While major business houses in textiles and home appliances are experiencing a boom in urban areas, retailers across all sectors in rural areas are struggling.”
He attributed this to a decline in people’s purchasing power. Although the market has slowly recovered from the losses incurred during Covid, it appears to still be feeling the pandemic’s impact.
Confirming the trend, P S Subinson, general secretary of the Palakkad Chamber of Commerce, stated that this year’s Onam season appears dull. “The market indicates a significant 60% dip in sales compared to merchants’ expectations. While people are spending conservatively on essential commodities, other sectors are experiencing sluggish business,” he said.
Merchants cite reduced money inflow, increased online shopping, and decreased spending enthusiasm among young people as reasons for the sales slump. “Hypermarkets are also being hit hard,” Subinson added.
“The home appliances industry has not experienced growth this Onam season, remaining on par with the previous year. This stagnation may be attributed to the delayed monsoon, but we anticipate a surge in sales after Onam’s conclusion. The recent disaster in Wayanad is also believed to have impacted sales,” said P K Muhammad, senior manager of Ajmal Bismi Group, Kottayam.
Sale of vegetables and groceries has also been impacted due to institutions and schools doing away with feasts due to the Wayanad tragedy.
“Except for onions, there has been no demand for other vegetables,” T T Ahmed, Kerala Vyapari Vyavasayi Ekopana Samithi, Pathanamthitta unit president, said.
He further observed, “The market is generally dull this season, unlike last year. Small towns, which usually see good business, are experiencing a recession. While there’s some activity in the textile sector, cash flow is scarce, and the vegetable market is not hopeful of a rebound.”
However, S S Manoj, state president of Kerala Vyapari Vyavasayi Ekopana Samithi, expressed optimism, saying that traders in the capital city are anticipating a surge in sales in the coming days. “After a brief slump, Thiruvananthapuram’s retail sector is recovering this festival season. Local traders are successfully countering the competition from online retailers,” he told TNIE.
Defying the overall market trend, the gold jewellery sector is expecting a surge in sales this season. S Abdul Nassar, treasurer of the All Kerala Gold and Silver Merchants Association, revealed that consumers are opting for light-weight gold jewellery as gifts, and this trend is gaining popularity. “Consumers are increasingly buying lightweight gold jewellery for gifting purposes, and this trend appears to be catching on,” he said.
(With inputs from Palakkad, Kottayam, Pathanamthitta, Thiruvananthapuram and Thrissur)