Festive atmosphere dampened by heavy rainfall during Onam celebrations

Rainy Onam Dampens Sales in Kerala

The Onam festival in Kerala, a significant period for consumer spending, has seen a mixed bag of results this year. While some sectors are reporting healthy sales, others are grappling with subdued demand and deferred purchases due to various factors.

The trading community in Kerala is expressing concerns over low consumer turnout and sales, primarily due to the forecasted rains. The continuous downpour has affected several industries, including the flourishing flower business. Institutions have temporarily halted the making of pookalams (floral carpets) outside their premises as the rains have taken a toll on the blooms.

Additionally, higher prices of flowers from neighbouring states have further hit sales in the flower trade. Roadside vendors selling garments are also among the worst-hit, with many availing credit from private lenders for festival sales but seeing reduced footfall due to the rains.

In the automobile sector, Sabu Johny, Director of Federation of Automobile Dealers Association, reported enthusiastic car sales till August 15. However, there are instances where people are deferring car purchases, anticipating a GST reduction post Diwali. This trend is also impacting the consumer durables industry, with many brands witnessing deferred sales during Onam due to the rains and proposed GST revision announcement.

Despite the challenges, the consumer durable sales for Onam in Kerala are estimated at ₹5,000 crore during the period between July, August, and September. The premium segments like front-load washing machines and frost-free refrigerators continue to register growth. Interestingly, Eldo Benjamin, COO of Nippon Toyota, mentioned good sales in the current season, with hybrid vehicles contributing 40% of their total sales.

On the other hand, Dominic Savio, a brand strategist in Kochi, noted that sales for white goods and electronics are falling short of expectations, anticipating a GST revision. Gopu Nandilath, Chairman of Nandilath G-Mart, stated that customers are adopting a "wait and watch" mode, anticipating a revision in GST rates.

The garment sales in Kerala during Onam are estimated to be between ₹30,000 crore and ₹40,000 crore. FMCG and apparel sales, however, are in line with projections. Certain white goods brands, on the other hand, reported better traction both in Aadi sales and the current season.

The announcement of a possible GST cut on Independence Day celebrations has made consumers confused, prompting them to defer purchases. If the skies are clear on Atham day, rains are likely during the Onam days, according to a popular proverb in Kerala. This year, Atham dawned bright and sunny, but meteorologists forecast rains in the coming week.

Despite these challenges, the spirit of Onam continues to shine bright in Kerala, with many eagerly awaiting the festivities despite the uncertain weather conditions. Many brands have already exhausted their earmarked Onam advertising spends but have now pulled back additional campaigns seeing no immediate return on investment.