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The Indian consumer has a pleasant surprise coming, retailers are
pushing to get the customer back to their stores. CNBC-TV18's Ronak Jain
and Sumiit Lakhutia report that price cuts are on the anvil, as the
industry gears up for a strong 2012.
2011 was a disappointment for retailers... one they want to forget quickly. And as they scramble to bring footfalls back to their shopfloors, the customer will be king, discount season returns with a bang.
Low demand due to weak consumer sentiment saw inventories pile up through December. But retailers say inflation is coming down and a 5-10% price reduction before March will help do more than just clear inventory pileup.
Kishore Biyani, founder and group CEO of Future Group says, "I think we are seeing softening up of prices in the food side. There is a significant deflation that has happened compared to last year. In clothing, the merchandise that will come in the next season will be at a much lower price."
Price cuts won't be enough, say retailers. They believe 2012 will see the sector building on its strong fundamentals and grow from USD 550 billion industry, to an USD 825 billion industry by 2015. So expansion is not pass�.
Bijou Kurien, president and CEO, Reliance Retail says, "We are expanding. We are certainly not constraining ourselves from expanding. We don't see any reason for us to slow down."
Kabir Lumba, MD of Lifestyle International says, "Overall, we are growing at about 25-30% over last year. I think that is something we are quite comfortable with right now, even though the last two months were quite difficult."
But caution is in the air and belt-tightening will continue.
Biyani says, "We believe whatever interest cost has risen for us we will have to cut down on other costs to offset on that. We have to maintain our business and sales. In that sense we have to become a lean and trim organisation."
Mark Ashman, CEO of Hypercity Retail says, "We did see softening in November. We pulled back a little in December, but the reality was that December was slightly better than November, but we remain cautious."
If I may twist the proverb, it's is really a case of whether the shoppingcart is half-empty or half-full. And it's only when we reach the check-in counter, will we really see how loudly the cash register rings.
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Source: http://www.moneycontrol.com/news/cnbc-tv18-comments/price-cutsanvil-retailers-gearforstrong-2012-_655811.html
2011 was a disappointment for retailers... one they want to forget quickly. And as they scramble to bring footfalls back to their shopfloors, the customer will be king, discount season returns with a bang.
Low demand due to weak consumer sentiment saw inventories pile up through December. But retailers say inflation is coming down and a 5-10% price reduction before March will help do more than just clear inventory pileup.
Kishore Biyani, founder and group CEO of Future Group says, "I think we are seeing softening up of prices in the food side. There is a significant deflation that has happened compared to last year. In clothing, the merchandise that will come in the next season will be at a much lower price."
Price cuts won't be enough, say retailers. They believe 2012 will see the sector building on its strong fundamentals and grow from USD 550 billion industry, to an USD 825 billion industry by 2015. So expansion is not pass�.
Bijou Kurien, president and CEO, Reliance Retail says, "We are expanding. We are certainly not constraining ourselves from expanding. We don't see any reason for us to slow down."
Kabir Lumba, MD of Lifestyle International says, "Overall, we are growing at about 25-30% over last year. I think that is something we are quite comfortable with right now, even though the last two months were quite difficult."
But caution is in the air and belt-tightening will continue.
Biyani says, "We believe whatever interest cost has risen for us we will have to cut down on other costs to offset on that. We have to maintain our business and sales. In that sense we have to become a lean and trim organisation."
Mark Ashman, CEO of Hypercity Retail says, "We did see softening in November. We pulled back a little in December, but the reality was that December was slightly better than November, but we remain cautious."
If I may twist the proverb, it's is really a case of whether the shoppingcart is half-empty or half-full. And it's only when we reach the check-in counter, will we really see how loudly the cash register rings.
( Enjoy Moneycontrol.com on iPad and be prepared for a fantastic experience. Get real time stock quotes, interactive charts, market buzz, and watch CNBC-TV18, CNBC Awaaz live on your iPad. Check out the free moneycontrol app. Click here to download now )
Source: http://www.moneycontrol.com/news/cnbc-tv18-comments/price-cutsanvil-retailers-gearforstrong-2012-_655811.html