Indian Retailer

For retailers, every occasion to celebrate is appropriate to do big business. This year, the Republic Day falls soon after weekend and top retailers are hiking their advertising and marketing spends by an additional 30% to 50% on offering huge discount offers, freebies to woo customers and spur sales. Before the last Republic Day, they were not so enthusiastic due to the economic slowdown, and rather preferred to maintain their consumer offers to certain categories only.

Big Bazaar, part of the Future Group, plans to launch Saalke Sabse Saste Chaar Din (the year’s most economical four days of shopping) offer between January 23 and 26, which will run across 120 Big Bazaar hypermarkets in 70 cities of India on many merchandise. Damodar Mall, group customers director, Future Group told FE, “After witnessing revival in footfalls since October last year , we are hiking expenditure for ads and marketing spends for this Republic Day over previous corresponding period by an additional 25% to 30%, and thereby cash in on the opportunity from weekend onwards as January 23 falls on a Saturday.”

“We hope to achieve 35% to 40% higher revenues through promotions during the Republic Day through innovative consumer offers apart from offering huge discounts on existing merchandise as well,” Mall added. The overall marketing budget by Big Bazaar was Rs 100 crore during the previous Republic Day, which included below-the-line advertisements, promotions and innovations, according to the Future Group spokesperson.

Meanwhile, Hypercity Retail India too plans to hike its marketing budget by over 50% for this Republic Day, over previous corresponding period, in launching innovative consumer offers on certain existing and new merchandise. This would include food, grocery and general merchandise, Ashutosh Chakradeo, head - food & grocery, Hypercity Retail ( India ) Ltd said.

Premium department store, Shopper’s Stop plans to launch new variety of ethnic apparels in private labels, which will be offered to customers at discounts with a value-for-money pricing strategy during the Republic Day. Besides, there could be offers on purchase of certain branded luxury perfumes and accessories as well, its president and CEO, Govind Shrikhande said. According to him, “Soon after New Year promotions, we feel Republic Day is the main driving force for spurring sales. Hence, we are upbeat about upcoming occasional celebrations and looking at increasing marketing spends.”

Indian retailers may be rejoicing at better sales in the October-December festive season, but a full recovery of the retail real estate sector still hinges on availability of spaces at competitive rates and improvement in consumption, global consultant C B Richard Ellis has said.

“The retail sector will take some time to fully recover, depending on the economic growth or improvement in domestic consumption , consumer sentiment and availability of retail space at competitive costs,” CB Richard Ellis (South Asia) chairman and managing director Anshuman Magazine said in a statement here on Wednesday.

Improving consumer sentiment and competitive retail rentals had, however, resulted in the sector “ambling towards better activity levels, especially in Tier I cities” , he added.

The global real estate consultancy firm also expects an oversupply of new office spaces across the country, which will keep rentals flat in 2010 despite positive indicators that demand for commercial real estate was improving.

“On the office market front, demand is expected to improve although the rentals are expected to remain flat in the medium term due to the forecasted large supply of office space,” Magazine said.

The year 2010 may, however, see “some sustainability in the residential market as activity levels have improved,” he said.

Prices for residential, retail and commercial real estate across the country plummeted in 2009 as a global economic meltdown and tight liquidity froze demand.

Residential sales declined significantly and demand for office spaces saw a substantial drop, triggering a decline in rentals and postponement or cancellation of projects , while retail real estate was also significantly impacted.

However, each of these three segments have witnessed an improvement since the previous year as reduction in prices, softening of interest rates and an improvement in the economic sentiments led buyers back to the market, the consultancy firm said.