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Consumer behaviour: Jewellery and fashion retailers hope for demand boost during festive, wedding season

Fashion and jewellery retailers are hopeful that festivals and the wedding season in the second half of the year will create more demandas discretionary spending has been subdued, reported TOI. A good monsoon, which gives cash to the people employed in the agricultural sector, is also expected to boost consumption. There was a rise in consumption towards the end of March quarter but full recovery in demand still remains. The mass segment has been impacted the most as there has been a slowdown in spending from the lower income households. The premium segment continues to do well.The mass segment, weighed down by economic pressures, is displaying “cautious spending behaviours” and is recovering at a slower pace, Joy Alukkas, chairman and managing director of Joyalukkas Group told TOI.

“The biggest requirement in the market is for the bottom of the pyramid to come in and spend,” said Kumar Rajagopalan, CEO at Retailers Association of India (RAI).

Retailers are worried as they had planned for a bigger growth, but the demand has remained flat, added Rajagopalan. The upcoming Union Budget will be important for the industry, which will keep a close eye on it. Within middle-income households, those earning between Rs 5-8 lakh annually seem to be more strained financially, industry executives indicated.“FY25… things may improve but it is good if we plan that the uptick is gradual. Maybe we are also looking at a good monsoon, good industrial output, agricultural output. These are all good things which should help us to boost demand in the later part of the year,” V S Ganesh, managing director at Page Industries (exclusive licensee of the Jockey brand in India), said in the company’s Q4 earnings call.

About 32 per cent intended to reduce their spending on apparel and footwear in the next 12 months, revealed Deloitte India in a study with 660 respondents. The study further revealed that accessories like watches and jewellery saw the lowest percentage of respondents intending to increase their purchase frequency. 30 per cent of respondents cited financial constraints to be the key reason for a lesser likelihood of spending on consumer durables.

“The big risk is that the mass segment does not revive as quickly as expected in the near term and we have continued pressure on volume growth, while the premium segment also remains sluggish with consumers feeling that their needs have already been met by past purchases,” Anand Ramanathan, partner and consumer products & retail sector leader at Deloitte India, said about the near-term challenges to consumption.

Paritosh Tiwari, head of retail at Raymond Lifestyle Business, said that the company witnessed a rise in consumer spending in Q4, but went down significantly in Q1 largely on account of fewer wedding dates.

“The heatwave and national elections restricted consumer movement, adding to the low customer walk-insand pushing retailers to initiate an early EOSS (end of season sale) and mid-season sales,” Tiwari added.


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