Brands such as LG, Samsung and Sony have slashed TV prices by 5-8% over the past few weeks, while mid-to-high-end laptops cost Rs 1,500-2,000 cheaper, experts said. industry leaders. In the case of smartphones, brands offer discounts of 4 to 5%.
Prices for edible oils fell 15-20%, while manufacturers slashed prices for large packets of cookies by 10-15% off.
Fast-moving consumer goods (FMCG) industry executives said promotions will increase in the coming months.
“We started passing on the benefit of lower input costs to larger packs of cookies from August 15 by offering a 10-15% discount,” said Mayank Shah, senior category manager at Parle. Products, the largest packaged food company. “We will be watching the cost of inputs for some time before deciding on a price cut across the line.”
Consumer budgets are under stress and incentives are needed to entice people to shop this holiday season, said Lalit Agarwal, chief executive of leading value-added fashion retailer V-Mart Retail.
“We expect to lower prices by 15-20% and hope this will translate into higher demand, at least in rural and semi-urban markets,” he said. “While margin percentage will be under pressure due to price declines, increased sales will help us maintain our absolute gross margins.”
PRICES OF COOLING COMPONENTS
Consumer electronics have started to get cheaper as companies try to eliminate unsold inventory, helped by falling component prices. Prices for semiconductor chips and open-cell panels used in televisions have fallen by up to 80% due to a global drop in demand.
For example, a 32-inch open-cell panel fell to $27 from $100. For the first time since the pandemic, brands are cutting prices in categories such as
and laptops, said Pulkit Baid, director of major electronics retail chain Great Eastern. “Correcting prices with festive offers will help improve sales,” he said.
Rising smartphone unsold inventory levels also led brands to lower prices by 4-5%, said Tarun Pathak, research director at cellphone industry researcher Counterpoint Technology Market Research. “Brands will become aggressive during the holiday season with higher discounts, especially in the sub-$150 price segment, where unsold inventory pressure is greater,” he said.
RELIEF AFTER A LONG TIME
The pricing relief comes after nearly nine quarters of sustained price increases or shrinking pack sizes due to rising input costs. Consumer inflation hit a record high in April in the wake of the Russian-Ukrainian war, dampening demand. Yet despite these reductions, most prices are still above pre-pandemic levels, as increases have been in the range of 20-25% over the past two years.
“Companies are looking to boost demand over the upcoming festive season as this is the first normal period after two years of Covid-related stress,” said Anil Chugh, head of food business at
Customer service. “However, they will be looking more to offer promotions than price cuts to stimulate demand.”
Amid falling global prices, the central government recently asked edible oil companies to cut prices by Rs 10-15 per liter after a drop of Rs 15-25 over the past three to four months. There was also a 25-50% price correction for two crucial commodities – crude oil and palm oil – used by the FMCG industry.
Apparel retailers, particularly in cities, saw strong double-digit growth due to pent-up demand, driven by office reopenings, weddings, events and increased social gatherings. As a result, not all brands will opt for price cuts to chase demand.
“There is no need to intervene on prices, as demand, even for full-price goods, is strong,” said Devarajan Iyer, managing director of department store chain Lifestyle International. “Fresh merchandise, not price, will drive sales during the holiday season.”