Jewellery, travel staring at moderating growth

New Delhi: Despite a promising start to the festive season, most sectors, excluding jewellery and travel, seem to have hit the snooze button, as per a report released by HDFC Securities.

Several factors contribute to this, including the normalisation of ticket sizes and purchase frequencies, weak footfalls (on a per sq ft basis), and a trend towards downtrading.

With a few exceptions, SSSG (especially for apparel and footwear) has ranged from -5 per cent to 2 per cent.

Both retail and distribution channels continue to grapple with elevated inventory levels. This has led to an early commencement of End of Season Sales (EoSS) by 2-3 weeks and higher discount levels in the system. Consequently, margins are likely to be weak, the report said.

"Our interaction with key stakeholders/companies suggested that although the initial response in the festive season was healthy, demand took a beating from mid-November onwards in apparel, innerwear, and footwear. Sales densities were weak, with SSSG ranging from -5 per cent to +2 per cent by the third week of December," the report said.

In terms of sub-categories, Indian ethnic wear performance was good courtesy the festive/wedding season; however, menswear and women’s western wear, winter wear and innerwear continue to struggle, it added.