Amid demand uncertainty following the fresh surge in COVID-19 infections, retailers of discretionary products have cut down their inventory by nearly a third in the last two weeks compared to the same period last year, The Economic Times reported.
Discretionary items include televisions, refrigerators, smartphones, apparel, washing machines and footwear. According to manufacturers of these products, retailers and distributors, including large chains, are stocking up 15 days of inventory as compared to 30 days earlier, to maintain cash flow even if business dips. However, the low inventory may have an impact on business in January.
Retailers are taking a cautious approach in building channel inventory, ET quoted Haier India President Satish N.S. as saying.
For electronics goods, January and February are peak months for stocking of summer products like air conditioners and refrigerators. However, Carrier Midea, LG Electronics and Godrej Appliances have said dealers have slowed stocking, which is impacting their business.
Uncertainty in the last two weeks about the impact of the COVID-19 variant Omicron resulted in dealers reducing stock levels, Carrier Midea India Chairman Krishan Sachdev told the business daily.
Stores like Lifestyle International have taken a 'wait-and-watch' approach when it comes to new orders. Lifestyle is likely to place new orders after weighing the progress of sales and state restrictions in the next two weeks, CEO Devarajan Iyer said.
A number of states have imposed restrictions as COVID-19 cases explode across the country. States like Delhi, Karnataka and Tamil Nadu have imposed weekend curfews, while Haryana, Punjab and West Bengal have directed malls either to close down or operate with 50 percent capacity.
Meanwhile, an earlier report of The Economic Times said food companies, dealers and distributors were focussing on stocking essential items like rice, wheat, cooking oil, pulses and tea, to avoid supply disruptions. This was irrespective of the fact that movement of food items is exempted from any restrictions.
Maker of Fortune brand of edible oils, Adani Wilmar, was building an inventory for 12 days at its 92 warehouses instead of 10 days as it normally does.
Basmati rice brand Kohinoor Foods said its dealers and distributors were “getting themselves ready in case of any exigency."
(Edited by : Shoma Bhattacharjee)
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