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Brick & Mortar Stores Face Dip In sales Due To Rise In Online Shopping

Pritish raj by Pritish raj
October 25, 2019
in News, Retail
3 min read
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  • “Sales have dropped by 40% (during the festival season) compared to last year. While traders have lost all hope, the jewelry sector feels’ Dhanteras’ could support jewelry along with utensils and sales of kitchen equipment,” Khandelwal told IANS.

Festival season sales (September-October) took a massive hit this year as a demand slump grips the economy, with sales down about 40 percent compared to a year-old era.

The Confederation of All India Traders (CAIT) Secretary-General says the main reasons for the decline in sales are consumer cash crunch and the mass shift to online shopping platforms behind “deep” discounts. Talking to IANS, he said that, compared to last year, the footfall in the brick and mortar stores, including malls, took a hit by about 60%.

However, he was of the view that sales could witness a spike on October 25 on’ Dhanteras.’

“Sales have dropped by 40% (during the festival season) compared to last year. While traders have lost all hope, the jewelry sector feels’ Dhanteras’ could support jewelry along with utensils and sales of kitchen equipment,” Khandelwal told IANS.

He also noted that “slowdown” marks the overall market sentiment.

Furthermore, as per Khandelwal, as traditionally done, many retailers did not even fill their stock ahead of the festival season.

Small Retailers - Next Big Brand
Small Retailers & Brick-Mortar Stores are facing a dip due to the rise in Online Shopping

“This year, people have not increased their stock for the festival season. Traders usually fill their inventory before two months, expecting the sales will grow as prices remain subdued,” he said.

Referring to the lack of sales, he said about 70 percent of retailers ‘ investment in Diwali’s stock has become a “dead” investment.

In the last few quarters, there has been a slowdown in consumption in the country. While the late government has announced a slew of initiatives to improve liquidity and demand, the steps have not yet born fruit.

Khandelwal also puts a large portion of the blame for the downturn in offline retail sales on the digital platform’s heavy discounts.

Despite the festivals, while the offline market is going through a lean phase, major online platforms are claiming a significant increase in sales during their festival sales, offering discounts and offers.

For a long time, CAIT has protested against the “deep discounts” and recently asked the government to check that online platforms violate foreign direct investment (FDI) standards.

After which the government has sought answers to the allegations from the major platforms with FDI.

There are instances of market players reporting an increase in their offline sales despite the gloomy situation.

Chairman and Managing Director of V-Mart Retail Lalit Agarwal said: “We’ve seen decent growth in sales during the festive season. If we talk about online retailers, most of their sales come from mobile phones and it hasn’t had an effect on our sales in small towns. We’re going to continue to see growth in sales as marriages begin, which means that the festive season is going to continue until the end.

Overall, the economy that is going through a prolonged period of low demand and consumption across sectors will take a little longer to recover, and the retail sector might have to be cautious in returning customers and selling in good numbers.

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Pritish raj

Pritish raj

Pritish Raj is a content writer at Next Big Brand. Hailing from the diversified state of Bihar, he is an engineer by education who chooses the way of poetry, photography, and writing to kick off his career. Highly enthusiastic about brands and startups, he aims to be a travel content creator.

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