The Rs 15,000 crore (Rs 150 billion) organised retail business is having a cracking Diwali this year.
Consumer spending at retail outlets in urban India is estimated to have grown by more than 50 per cent this festive season compared with last year's season.
"With the economy doing well and gold prices shooting up, the middle-class is splurging on categories like apparel and footwear," said Kishore Biyani, chairman and managing director, Pantaloon Retail.
According to Biyani, sales in his Big Bazaar stores have nearly doubled this festive season, with the company clocking sales of nearly Rs 5 crore (Rs 50 million) a day and Rs 20 crore (Rs 200 million) on weekends.
"This Diwali is shaping up to be a very good one for the industry," said Sanjay Badhe, director (operations and customer care), Shoppers' Stop.
Although the company would not comment on sales because of its impending initial public offer, executives said growth was over 50 per cent this year.
Shopping malls are also reporting a near 50 per cent increase in footfalls this season and sales have gone up by more than 30 per cent.
Sahara Mall in Gurgaon, the upcoming mall capital of the country, has witnessed average footfalls of 25,000 on weekends and nearly 12,000 on working days. This is 50 per cent more than last season.
In Mumbai, some of the shopping malls are giving away gifts worth over Rs 50 lakh (Rs 5 million) to woo customers. Crossroads, R Mall and Inorbit are wooing customers with holiday packages, shopping binges and gift vouchers.
Malls are also apportioning a significant percentage of their earnings towards promotions. Print and radio are the preferred mediums for the malls. Ad budgets for the malls are anywhere between Rs 15 lakh and Rs 20 lakh (Rs 1.5-2 million) but they are not complaining as footfalls are increasing.
Crossroads has an average footfall of 20,000 a day, which doubles during weekends and on special days. Sunil Nair, associate vice-president (mall operations), Crossroads, says: "On days like Dhanteras, the footfalls are anywhere between 40,000 and 50,000."
R-Mall has been experiencing 70,000 footfalls since November 7. It expects a 30 per cent increase in sales during this period, while Crossroads is looking at a 40 per cent rise.
Mall owners say customers are not shying away from splurging heavily on both consumer durables as well as jewellery and clothing. Some of the malls in the Capital like Centrestage, Citycentre and MGF have reported average sales of Rs 2,500 per person in this season.
Explaining the rush, Arvind Singhal, chairman of KSA Technopak, said consumer confidence in urban India was at an all-time high.
"There has been a significant amount of new job creation in urban India in the last 12 months. And it is not just the information technology or the IT-enabled services sectors that are contributing to this phenomenon, but others like retail, food services and telecom are also creating huge employment opportunities," he said.
Singhal, however, added that consumer spending in rural India for the same period may not be as healthy because of the poor monsoon in some regions.
