Downturn In Wedding Expenditure Hits Retailers Hard

EE News Desk Mar 15, 2024

Wedding-related spending has remained subdued in the current fiscal year, unlike the previous fiscal year, primarily due to a lack of pent-up demand, a lower number of auspicious wedding dates and the overall impact of consumption slowdown.

Industry estimates suggest that sales of categories such as ethnic and wedding wear, gold jewellery and electronic household appliances have declined by 10-20 per cent in the current fiscal year up to February, compared to the same period last fiscal year.

However, luxury and premium products have defied the trend of declining sales, reflecting the overall consumption trend.

Vedant Fashions, known for brands like Manyavar and Mohey, recently informed investors that the company's performance in the nine months ending December 2023 was affected by significantly fewer weddings, a general consumption slowdown impacting consumer sentiment and the higher base effect from the previous year post-covid.

Vedant Modi, Chief Revenue Officer, Vedant Fashions, highlighted to the media that industry stakeholders, including banquet hall owners, five-star hotels and event organisers, have observed an overall decrease in wedding business compared to the previous year. He attributed this to a mild economic slowdown, particularly in tier two and tier three markets.

The increase in gold prices has further dampened sentiment. Gold prices have been on the rise since October, reaching record highs in February, resulting in a decline of over 20 per cent in demand for gold jewellery between November and February compared to the same period last fiscal year.

While mass-market wedding jewellery sales have been severely impacted, luxury items adorned with diamonds and coloured gemstones have shown resilience.

Sales across various mass-market segments, including fast-moving consumer goods, apparel, footwear and electronics, have been affected by Covid-related disruptions, high inflation and subdued consumer sentiment across urban and rural India.

Projections for demand recovery have been pushed back, with hopes pinned on strong macroeconomic indicators. Reserve Bank of India Governor Shaktikanta Das recently stated that India's economy is expected to grow faster than the earlier estimate of 7.6 per cent in FY24 and may grow at 7 per cent in the next fiscal year.

These trends present a sharp contrast to the performance reported by leading apparel manufacturer Aditya Birla Fashion and Retail for its designer brands in the last quarter, largely driven by the wedding season. Sabyasachi witnessed a 43 per cent year-on-year growth with its highest-ever quarterly revenue, while Shantnu and Nikhil posted a 30 per cent growth and House of Masaba recorded a 16 per cent increase.