"Retail slowdown is more sentimental than real" – Experts
Retail industry feels that the present slowdown is more sentimental than real and utmost caution is required to deftly handle the current phase, according to major retailers in the country.
They have voiced this view in the Panel Discussion on “Retailing Challenges in Times of Economic Slowdown” organized by Birla Institute of Management Technology (BIMTECH) today in New Delhi.
Taking part in the discussion, Mr Shailesh Chaturvedi, CEO, Tommy Hilfinger Apparel India, said that though the slowdown was experienced in the metros, the tier two cities have recorded robust growth in consumer spending. Referring to the sales of his own brand, he said that for the month of October 2008, the growth was almost 100 percent though he expects some slowdown in the next few months. He mentioned about the brisk sales for his premium apparel products in Amristar, Patiala and Jaipur.
People are deferring the purchases on account of the market speculations and rumors in metros. He said that Indian consumers have matured over years and a cowboy attitude in aggressive marketing by offering discounts and other doles would not work out favorably in these difficult times. He also said it was the right time for the retail outlets since the rentals might have come down and also to study the consumer behavior in depth.
Mr. Gautam Dutta, CEO, PVR Cinemas, said that innovative products have to be designed to retain the consumer interest in the product to balance out the negative perceptions conceived rightly or wrongly by the consumers. Referring to his own retail segment and performance of the company, he observed that though the Q2 may have been a bit lackluster, the Q3 was rocking. He also added that in difficult times one requires clear cut communication strategies to reach out to the consumers.
Presenting the state of the real estate sector in India, Mr Pradeep Jain, Chairman, Parasvnath Developers Ltd, observed that the scare of slowdown was germinated mostly in the minds of the media and through some ill-informed stories both in the print and electronic media, people have come to believe that a catastrophe was going to take place in the country. Time has proved that no such adverse development did take place.
He exuded the optimism that the retail sector would bounce back sooner proving the skeptics wrong. He also mentioned that the size of the organized retail was very small in India and most of the malls are very small compared to the average mall size of more than one million sq mts in the US and Europe. He wanted the Government to be more proactive in evolving programs for overcoming the current crisis.
He said that there is an acute shortage of quality land in the country, particularly in the metros, which have pushed up the rentals. He wanted the organized retail sector to get organized more. The disbursement of loans and advances by banks and financial institutions should be streamlined. Despite the directives from the Government, the fund flows are not adequate.