Financial Daily from THE HINDU group of publications
Thursday, Jan 03, 2002
New Year sales gets lukewarm response
First-time buyers are driving volumes this year at VGP
CHENNAI, Jan. 2
THE New Year sale, a phenomenon typical to Chennai, has not had the much-desired shot-in-the arm for the retailers in the city.
According to Mr V.G.P. Babudas, Senior Director, VGP group, a prominent retailer in the city, sales have dropped by 15 per cent over last year for VGP. Even Viveks, among the largest durables retailing chains in the country and the pioneer in New Year sales, has not registered any significant growth over last New Year's sales (as per the data available till date).
"It is the same as last year," confirmed Mr B.A.Srinivasa, Director, Vivek Ltd, to Business Line. According to Mr Babudas, sales of consumer durables have been sluggish this year. This is because the SEC A&B have stayed away from spending their money. "They don't want to spend on household articles. Even if they spend, they have cut down on their budgets," he says. It is the SEC C which is driving the volumes for the new-year sales. With ample availability of finance and hire-purchase schemes, it is the `first-time' buyer who is sustaining the demand. Every year, the sales for VGP during these three days are equal to the sales of an entire month.
Retailers believe that this is the right time for consumers to buy as they are offered the best of deals. "We negotiate with the manufacturers and offer the best rates," says Mr V.G.P. Prasad Das, Director. He explains that sometimes they even forgo their margins to retain the goodwill of the customer. This year at VGP, customers are given a free gift with every purchase made above Rs 3,000. According to Mr Srinivasa of Viveks, there is ample availability of finance and hire-purchase options for consumers to purchase the products they want. "This is the best time to offer the lowest price," he says. In fact, manufacturers like Samsung gift a gold coin with purchases made through the hire purchase schemes of Viveks.
Retailers have also introduced a variety of schemes and discount offers this time. Vasanth & Co, another prominent retailer in the city, for instance, has introduced the `non-buyer scheme', which is targeted at lower-middle class families. "Residents of a particular neighbourhood are given questionnaires, there is a lucky draw and the winner gets a gold coin," says Mr Vasanthakumar, Chairman and Managing Director, Vasanth & Co.
Though retailers have not had the best of years, most of them are optimistic about the market to revive in the near future.
"We have grown by 13.7 per cent this year and are expecting more sales in 2002," says Mr Bhavesh Shah, Vice-President, Marketing, S.C.Shah & Co, a durables retailer. Mr Srinivasa of Viveks, believes that the agriculture sector will kick-start the demand for the other sectors. "This is bound to happen very soon," he says.
A matter of sentiment
It was in 1976 that Chennai-based retailer Viveks, had its first ever `New Year' sale. Despite the popular belief in Tamil Nadu that the Margazhi month (Dec- Jan) was not the best of times to make a purchase, the sale clicked and today (25 margazhis later) Viveks makes 25 to 30 per cent of its annual sales in just those three days (Dec 31, Jan 1 and 2).
"We express our gratitude to our customers and give them the best during this month when it is considered to be inauspicious to make purchases," says Mr B.A. Chandrashekar, Assistant Managing Director, Vivek Ltd. The other retailers in the city soon followed the trend.
"People buy during New Year's because of sentimental reasons," says Mr V.G.P.Babudas, Senior Director, VGP group, explaining the reason behind the popularity of New Year sales in the city. For instance, Mr Krishna Prasad, a businessman, purchased a gold coin on New Year's Day as a good luck charm.
Housewife Ms Usha Swaminathan says she buys at Vasanth & Co's New Year sale to avail of the double advantage of the discount as well as the gold coin offer.
(With reports from R. Anupama, Ramya K. Prasad, B. Bharathi)
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