Winning Bizness Desk

Mumbai.Fashion retailers across India are rolling out aggressive discounts weeks ahead of schedule as slowing consumer demand forces brands to rethink their sales strategy. Traditionally reserved for July, mid-season and end-of-season sales have already begun in June, with discounts of up to 40% being offered on selected fashion and lifestyle products. The move comes as rising household expenses continue to squeeze discretionary spending.

Demand slowdown hits fashion sector

Industry data shows fashion sales have declined by nearly 30% over the past two months. Higher spending on petrol, diesel, CNG, LPG and other daily essentials has prompted consumers to cut back on apparel and lifestyle purchases as they seek to balance household budgets.

To stimulate demand, several leading brands and online platforms, including Myntra, Nykaa Fashion and Flipkart, have launched special promotional campaigns. Rather than waiting for the traditional end-of-season sales period, retailers are now looking to move inventory much earlier.

Consumers become more cautious

Retail experts say the trend reflects a significant shift in consumer behaviour. Shoppers are increasingly evaluating purchases through the lens of value and affordability before opening their wallets.

Growing inflationary pressures, global uncertainties and concerns over future spending have made consumers far more selective. Retailers are therefore focusing on attracting buyers before inventory levels become unmanageable.

Key challenges facing retailers

The fashion industry is currently grappling with several headwinds:

• Fashion product sales have fallen by around 30% in the last two months.
• Rising domestic expenses and geopolitical tensions are weighing on consumer confidence.
• The spring-summer season has remained weaker than expected for businesses.
• Consumers are exercising greater caution when making large non-essential purchases.

A sharp decline in spending intent

Consumer willingness to buy discretionary products has dropped significantly. By March this year, the desire to purchase non-essential items had fallen to around 30%, compared with more than 70% previously, reflecting growing financial caution among households.

Retailers adjust their strategy

Companies are avoiding blanket markdowns and instead offering discounts only on selected stock-keeping units. The aim is to maintain profitability while encouraging purchases.

Other strategies include:

• Bundling offers such as 1+1 and 1+2 deals to increase basket sizes.
• Driving store footfall through attractive promotions before the festive season.
• Protecting margins through targeted discounts instead of deep price cuts.

Strong market growth despite short-term weakness

The current slowdown comes despite the Indian fashion and apparel market recording strong long-term growth. The sector has expanded by 52% over the last four years, with market size estimated to exceed ₹11.4 lakh crore in 2025.

Market growth highlights include:

• 2021: ₹7.5 lakh crore, aided by post-pandemic recovery and 45% sales growth.
• 2022: ₹8.5 lakh crore as physical stores reopened, delivering 15-20% growth.
• 2023: ₹9.5 lakh crore, broadly in line with expectations.
• 2024: ₹10 lakh crore, surpassing forecasts.
• 2025: ₹11.4 lakh crore, reflecting strong growth of around 14%.

Early festive planning begins

Retailers are also advancing their seasonal calendars. While end-of-season sales previously began in July and continued until mid-August, many have now started in early June. New collections that typically arrived in August are expected to hit stores by mid-July.

According to a Deloitte report, the share of Indian consumers willing to make large and discretionary purchases slipped to 65% in March from over 70% earlier. The report noted that Indian consumers are currently practising “calibrated consumption”, balancing aspirations with financial discipline as economic pressures persist.