As a consumption slowdown grips the economy, even festival season sales (September-October) have taken a massive hit this year, with sales down around 40 per cent compared to a year-ago period.
The Secretary General of the Confederation of All India Traders (CAIT) says the major reasons for decline in sales are cash crunch of consumers and the mass shift to the online markets on the back of "deep" discounts. Speaking to IANS, he said that the footfall in the brick and mortar shops including malls has taken a hit by around 60 per cent in comparison to last year
He was however, of the view that sales may witness a spike on 'Dhanteras', October 25.
"So far in comparison to last year, sales are down 40 per cent (during the festival season). Although traders have lost every hope, the jewellery sector feels, may be 'Dhanteras' would help jewellery along with utensils and kitchen equipment sales," Khandelwal said.
He also noted that the overall sentiment in the market is marked by "slowdown".
Further, as per Khandelwal, most of the retailers did not even fill their inventory ahead of the festival season, as done traditionally.
"People have not increased their inventory this year for the festival season. Generally, traders fill their inventory before two months, with a hope that the sales will rise, as prices then remain subdued," he said.
Referring to the lack of sales, he mentioned that around 70 per cent investment by retailers on inventory for Diwali has become "dead" investment.
Consumption slowdown in the country has been witnessed over the last few quarters. Although the government off late has announced a slew of measures to enhance liquidity and boost demand, so far the steps have not born fruit.
Khandelwal also puts a significant part of the blame of decline in offline retail sales on the heavy discounts on the online platforms.
Although the offline market is going through a lean phase despite festivals, major online platforms claim significant rise in sales during their festival sales whereby they offer discounts and offers.
CAIT has been protesting against the "deep discounts" for long and has recently asked the government to check whether the online platforms violate the norms for foreign direct investment (FDI).
Following which the government has sought replies from the major platforms with FDI regarding the allegations.
Despite the gloomy situation, there are instances of market players reporting a rise in their offline sales.
Lalit Agarwal, Chairman and Managing Director, V-Mart Retail said: "We have seen decent growth in sales during the festive season. When we talk about online retailers, the majority of their sales come from mobile phones and it didn't have an impact on our sales in small towns. We will continue to see growth in sales since marriages will start which means festive season will continue even after October."
By and large, the economy which is going through a prolonged phase of low demand and consumption across sectors would take some more time to revive and the retail sector might have to be patient for the return of the consumers and sales in good numbers.