Retailers eyeing 10-12% growth in sales during festive season this year, employment to increase by 20%


Consumer sentiment is expected to pick up this festive season with retailers expecting at least 10-12 per cent growth over last year’s sales, said Wright Research. Per the report by Wright Research, the growth is expected to be driven by automotive, FMCG, e-commerce, manufacturing, commodities, travel & hospitality sectors this festive season. It further estimated a 20 per cent increase in employment during the festive season. 

“The onset of the season starting with Ganesh Chaturthi followed by Navratri, Diwali and beyond – contributes as a major economic catalyst in the country. Auspicious buying, marketing and discounts, deferred purchases are a combination of festive euphoria and tempting deals that sparks consumer spending during festival months,” the report stated. E-commerce firms, it added, also anticipate a 28 per cent growth in sales during the festive month. 

The report stated that positive economic factors, businesses adapting strongly to market changes and pertinent government intervention to control inflation suggest not only a spirited festive quarter but also the potential for a ripple effect of growth and employment opportunities well into the future. 

Sonam Srivastava, smallcase manager and founder of Wright Research, said, “We also see our smallcases making a tilt towards the festive stocks as the momentum picks up. The Innovation and New India portfolios bet on India’s economic revival with a focus on domestic manufacturing, automobiles, e-commerce sectors and the Momentum and Alpha small cases are bound to pick up the trending festive stocks as the momentum builds. Festivals are a Mahurat for good fortunes in the Indian stock markets and our portfolios are geared up to take advantage.”

The festive season acts as a “harbinger of the economic boom in the country”, amplifying India’s GDP during the quarter, with key festivals contributing upto 40 per cent for annual sales of some companies in sectors like home decor, apparel, electronics, confectionary goods, etc. 

Last year, the Naukri JobSpeak Index touched 3,103 with a 13 per cent YoY growth substantiating the link between festival-driven consumption and employment. The phenomenon is not restricted to the major cities alone. Metros like Mumbai registered a 27 per cent YoY growth in hiring last year, while emerging cities like Coimbatore and Ahmedabad also showed positive employment trends. Surveys across industries like insurance, travel & hospitality, retail and FMCG, etc. show that there is an estimated 20 per cent increase in employment in the coming few months, the report said. 

Sectoral expectations this festive season

In terms of sectors, Wright Research said that there has been a 245 per cent YoY growth in hiring for the manufacturing and industrial segments. BFSI and telecom also saw increased hiring. There’s a notable 9 per cent increase in demand for retail staff thus indicating a broadening in the types of roles suited for gig workers, extending beyond just e-commerce. With the workforce in the e-commerce sector estimated to reach up to 3 lakh people across warehouse and delivery, it’s an indicator of a boom in online shopping and logistics, especially as the festive season nears, the report stated.

“Festivals play a pivotal role in stimulating economic activities, reflecting deeply in India’s GDP growth. The festive season, particularly Durga Puja and Diwali, traditionally spurs heightened consumption and investment, contributing upto 40 per cent for annual sales in sectors like home decor, apparel, electronics, and confectionary goods to name a few,” added Sonam Srivastava.

In the automotive sector, Wright Research said the domestic passenger vehicles have posted August sales at 10.4 per cent higher on a year-on-year basis. Automobile manufacturers are stepping up production for the festive season by 10 per cent to 20 per cent from last year’s levels.

Sales consumer electronics and FMCG saw a surge of 25-30 per cent YoY during 2023 Independence Day sales. Demand for FMCG, especially sweets, electronics and luxury items, soar around festival season.

Online retailers in India are gearing up for a strong festive season, sales are expected to increase by 20 per cent to over Rs 90,000 crore, according to Redseer. The Indian e-commerce market has grown almost 20-fold since 2014, now expected to reach a gross merchandise value of approximately Rs 5,25,000 crores in 2023.

Manufacturing PMI for August climbed to a three-month high of 58.6, marking its 26th consecutive month above the pivotal 50-point mark, which distinguishes expansion from contraction. 

Demand for gold is expected to surge over the next two to three months, fueled by festive seasons. Despite stagnant gold prices influenced by economic challenges in the US, industry experts are optimistic of gold’s demand, attributing it to strong stock market performance and changing consumer behavior. 

The travel industry is witnessing more than a 100 per cent surge in demand for festival travel. There is increased interest in train journeys due to infrastructure improvement and rise in airfares. The hospitality industry is optimistic seeing double digit growth in demand compared to last year for both leisure and city destinations. 

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