Wedding Season May Offer Just Fleeting Relief To Struggling Retailers

After months of lull, this year's extended wedding season promises a much-needed sales boost for the fashion-to-jewellery retailers.However, this lifeline, for many, may only be temporary as experts remain wary of consumer sentiment beyond the festivities, in the absence of any immediate triggers to stimulate the fragile spending behaviour, particularly in the key urban markets. And this uncertainty may potentially impede the companies' ability to finish the financial year on a strong note."The markets have picked up towards the end of October after a not-so-exciting festive season as consumers are engaging in last-minute shopping rather than planning ahead for occasions like weddings," said Rahul Mehta, chief mentor, Clothing Manufacturers Association of India, which represents 20,000 companies, including domestic retailers and exporters. "But that said, we are anticipating a staggered revival, with sales projected to bounce back to levels near those of pre-Covid or 2019 after the full wedding season concludes in May next year."Mehta believes that this year will mark the first year of full economic normalisation following the pandemic-led disruptions..We saw an artificial revival in 2022, followed by a slump in 2023. Now, 2024–25 is likely to usher in a period of stability that will provide a clearer picture of consumption trends.Rahul Mehta, chief mentor, Clothing Manufacturers Association of India.The $130-billion Indian wedding industry ranks second after food and grocery and is a significant driver of discretionary consumption. The average wedding expenditure in India is estimated at Rs 12.5 lakh, roughly double the amount spent on 18 years of a child's education. At anywhere between Rs 20 and Rs 30 lakh, the average spending of the uber rich is more lavish. Its impact extends across various sectors, such as jewellery, apparel, catering, hotels and banquets. Nearly half of all jewellery bought in India is bridal-themed, with gold as the default choice, traditionally benefiting companies like Titan Co. and Kalyan Jewellers India Ltd. This year, after a sluggish first half as inflation-hit consumers tightened their purse strings, these companies are hopeful of an improved second half. They are mostly counting on the higher number of auspicious days to drive sales."Once gold prices corrected post the custom duty reduction, many people came in," Ajoy Chawla, chief executive officer of Titan's jewellery division, said during a post-results call. "And because festive is a good period to pick up jewellery, the wedding [demand] picked up. We think it's a good run ahead for the next two quarters.".Maruti Suzuki Sees Wedding Season As Driver Of November Sales.Weddings also account for over 10% of the apparel industry's revenue. But wedding-related spending in the first half of the fiscal — with 11 auspicious dates — remained subdued, mirroring the wider economic slowdown. Companies like Aditya Birla Fashion and Retail Ltd. and Raymond Lifestyle Ltd. are now banking on the estimated 48 lakh weddings scheduled over just 17 days in November and December to revive their fortunes. The fourth quarter offers more hope, with a total of 21 auspicious dates."It's been a tough H1... but so far, [in Q3] we have had a decent start," said Vishak Kumar, the CEO of lifestyle business at ABFRL. "We still have to watch out how it pans out during November, December. The good news is, there are a lot of wedding dates through this period, so I believe it should be a decent quarter."For its premium ethnic wear brands such as Tasva and designer-led brands portfolio, which includes Sabyasachi, the company expects a "stronger growth" as the rest of the wedding season plays out in the second half.While wedding spends tend to be more urban-led, there are still many ceremonies planned in rural areas, especially since the first half of the year saw fewer rural weddings, Raymond Lifestyle Managing Director Sunil Kataria said. The industry is expecting to benefit as the backlog of weddings unfolds, he added..There is a clear rural recovery, and I think that is a positive trigger.Sunil Kataria, managing director, Raymond Lifestyle.India's Wedding Industry Poised to Drive Economic Growth, Says Minister.While companies are upbeat, a host of experts have cautioned that the seasonal surge may not translate into sustained growth throughout the year amid ongoing economic uncertainties influencing consumer behaviour."We will definitely see some uptick in specific categories like jewellery, alcobev and apparel," said Abneesh Roy, executive director, Nuvama Institutional Equities. "But our broader sense is that wedding spends in big metros will still be muted as urban slowdown weighs on consumption."Corporates are feeling confident of the second half of the fiscal after a tepid first six months, driven by the expected rise in government spending, according to Anish Damania, CEO of JM Financial Institutional Securities. "However, we will start seeing a pickup in urban consumption probably next year, first-quarter onwards."Aditi Nayar, chief economist at ICRA also believes that there is a possibility that rural areas will drive the overall consumption growth in the second half of this fiscal due to better income visibility and improving sentiment..Urban consumption is likely to remain uneven in the remainder of the fiscal.Aditi Nayar, chief economist, ICRA.Teresa John, an economist with Nirmal Bang Institutional Equities, concurred. "Discretionary consumption beyond the basics remains constrained."John said the triggers for a potential recovery could be moderation in food inflation and a pickup in government spending on infrastructure, which could lead to more employment generation in construction jobs as well as sustained recovery in private capital expenditure. "And this won't happen overnight, so we can expect urban slowdown to persist for at least a few more months.".Electronics Mart CFO Says Festive Sales Drove Double-Digit Growth, Eyes Wedding Season Now

Wedding Season May Offer Just Fleeting Relief To Struggling Retailers

The $130-billion Indian wedding industry ranks second after food and grocery, and is a significant driver of discretionary consumption.

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Wedding Season May Offer Just Fleeting Relief To Struggling Retailers

The $130-billion Indian wedding industry ranks second after food and grocery, and is a significant driver of discretionary consumption.

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