Consumer goods firms expect festive season sales to grow as high as 50%

Companies across consumer sectors are pinning their hopes on the upcoming festive season, which is going to be the first full-fledged season after two years that were marred due to Covid-19. Sales growth is projected to grow 10%, to as high as 50%, over last year’s festive season, and most companies say that the momentum is better than in 2019.

While festive season demand is usually bumped up given the positive consumer sentiment around it, the better news is that firms are hopeful that with no fresh disruptions to business, the demand momentum should continue beyond it as well.To be sure, the start to the season with Independence Day sales in early to mid-August, followed by other festivals leading till Ganesh Chaturthi earlier last week, have seen strong sales momentum. This is expected to continue going forward, with Onam in Kerala, followed by Durga Puja and Navratri, Dussehra, and ending with Diwali in October.

Mondelez India told FE that the season kicked off on a positive note, with its rakhi campaign witnessing double-digit growth for the brand. “From a trade perspective, the sentiment remains positive as most retailers experienced encouraging off takes during rakhi with our portfolio,” said Desmond D’Souza, senior director (sales), Mondelez India.

Festive sales usually comprise around 28-30% of the annual sales for Godrej Appliances, and this year the company is targeting an over 30% growth on a year-on-year, in the second quarter during Onam festivities, said Kamal Nandi, business head and executive vice-president, Godrej Appliances, and part of Godrej & Boyce.

Ajay Mehta, managing director, AIWA India, said that the company has seen good traction from Independence Day until now. “Considering the upcoming festive seasons and the busy Onam period in Kerela, our primary sales have seen a 70-80% uptick,” he said. AIWA is expecting 3-4x growth in festive sales numbers, though on a lower base of last year. The company is also launching new products and expects 20-22% contribution from the new launches, which would help sustain the momentum through the next year.

Satish NS, president, Haier Appliances India, said the company is hopeful to achieve 30% growth this season, compared to 2019. “Our outlook for the season is positive, and we expect medium to high-end segments to remain in demand long after the festivities are over.”Similarly, BSH Home Appliances, which has premium brands such as Bosch, Siemens and Gaggenau, witnessed above 50% growth in sales around August 15 through its organised retail, large and branded stores in India. Neeraj Bahl, MD & CEO, India and SAARC, BSH Home Appliances, said, “We are optimistic of a good festive season this year, and the momentum seen earlier this month gives us confidence that we can have 40-45% growth in sales over last year.”

Bajaj Electricals is also expecting healthy demand during the festive season and months ahead, with green shoots beginning September. “We have planned for sufficient supplies for seasonal products where we anticipate good demand to ensure no supply shortage in the market,” said Ravindra Singh Negi, chief operating officer (consumer products) at Bajaj Electricals.However, high inflation and deficit monsoons in states like Uttar Pradesh and Bihar are making companies sceptical about sale of mass segment products and rural recovery.

“The festive target setting for the country will depend on how the monsoons l and the consumer sentiment fare overall. We are cautiously optimistic as far as the mass segment is concerned, but the premium segment is expected to continue doing very well in the festive season as well, and will form the focus across categories,” said Nandi of Godrej Appliances.

However, the optimism remains high among FMCG players and retailers. Mayank Shah, senior category head at Parle Products, expects 10-15% year-on-year growth in sales during this year’s festive season, a momentum that has been built since the beginning of August with more people moving out. “We expect demand to remain robust throughout the year,” he added.

Emami Agrotech, which produces edible oil, spices and vanaspati, anticipates higher demand from HoRECA (hotels, restaurants and canteen) channels, for edible oil specifically,compared to the household segment, with a rise in eating-out trends. “We are preparing the entire supply chain to meet demands in excess of 20% over the last year’s festive months,” said Krishna Mohan Nyayapati, director, Emami Agrotech.

Shoppers Stop has also witnessed a strong start to the festive season, said Venu Nair, managing director and CEO, in an interview to CNBC TV18. According to Nair, shoppers are prioritising quality and brands, while the footfalls are ahead of pre-covid levels on like for like basis, up 8% in the first quarter. In terms of absolute spends too, the company has seen eight quarters of growth in like for like average bill value. Kolkata-based footwear retailer Sreeleathers is enjoying over 10% growth in sales compared to 2019 and momentum will continue, said director Rochita Dey.

Khadim India CEO Namrata Ashok Chotrani said. “Khadim expects a healthy margin growth this festive season, as there is high demand for premium category footwear.” Financial Express