Apparel retail sector is likely to face another quarter of slowdown: Report
retail sector is likely to face another quarter of slowdown as most of them have reported flat to low single digit same store sales growth during Q3FY24, according to ICICI securities.
This is primarily due to the lower footfall during the peak season, impact of world cup during weekends and late onset of winter season.
As a result, most brands have kicked-off end of season sale offering upto 65% discount, 2 weeks early in December 2023 against normal one month EOSS window in January.
Retail sales in October and November 2023 showed a growth of 7% just as compared to the sales levels during the same period in 2022, according to the survey by Retailers Association of India (RAI).
“We believe higher discounts are reflective of the relative stress in the underlying inventory, and hence, may be a leading indicator of business performance in the near term,” ICICI securities has said in its latest report.
Top-7 retail companies Shoppers Stop, Reliance Trends, Lifestyle, Pantaloons, VMART, Max, Westside are surveyed by the company and at 66% Shoppers Stop is offering the maximum discount against peers at 20-40%.
The discounts offered by Reliance Trends, Lifestyle and Pantaloons stood at 40%, 41% and 42%, respectively. This is largely due to more aggressive private label discounting by Shoppers Stop.
On branded products like W, Aurelia and Biba, the discount offered by Reliance Trends (at 51%) has been the highest compared to 45% offered on the same products by Shoppers Stop, Lifestyle and Pantaloons.
The discount offered by VMART was the lowest at 23%.
100% private label retailers like TRENT and VMART continue to follow strict discounting-window policy as they have not participated in early EOSS.
“We expect TRENT to
