A decrease in demand contraction due to a slowdown in the domestic economy has affected the sales of retailers. KPMG says that the sales growth in December 2008 slowed to 11 percent from 35 percent a year earlier, according to the report by Reuter India.
Indian economy is expected to continue its slow down with the growth in GDP falling to about 7 percent in the fiscal 2008-09, down from over 9 percent during the last three years.
Some analysts claim that the growth during the coming fiscal year 2009-10 could be lower as the impact of the global slowdown impacts the economy more.
In the KPMG survey, 70 percent of the respondents said lower sales have adversely affected footfalls, prompting them into better cost management including rental renegotiation, store rationalisation and manpower re-resizing.
The firm predicts the retailers to focus more on food retailing and consumer goods and shift away from lifestyle goods during the slowdown period.
Since the rents and operating costs are lower in the Tier II and Tier III cities, the firm expects them to help boost their profits.
DelWine however feels that the retail slowdown will impact the sale of wine through retail only marginally though, as more and more new breed of wine lovers buy wines from the retail stores and more of the existing wine drinkers shift away from the hotels and restaurants and buy from the expanding number of retailers storing and selling wine.
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