June 9, 2014: This Summer when the mercury is touching a peak of 47 degree Celsius in New Delhi and other parts of North India the sale of white goods, soft drinks and ice creams have shot up. This is the first time in 19 years that the mercury is soaring so high. The retailers and manufacturers have estimated an increase of 10-15 per cent in sales and attributed this increase to late onset of summer and recurrent showers. According to KJ Jawa, MD, Daikin Airconditioning India, “Until now, higher temperature in east, west and south India had compensated the manufacturers this summer, with sales growing 15% in May compared with the year-ago period. The spike in sales is a big relief for the air conditioning industry as it can look forward to a high single-digit growth this year, after flat sales over the past two years.”
Though there is an upward trend in the sales of air conditioners and refrigerators the retailers are facing a challenge of maintenance of store-level inventory and the manufacturers are facing a challenge of distribution. Many a manufacturers and retailers have not been able to build up store level inventory. According to Shantanu Dasgupta, VP (corporate affairs and strategy), Whirlpool, “We have not been able to build up store-level inventory the way we wanted to since we did not expect such a sudden spurt in demand due to high temperature.” A sudden increase in the sales of AC,s fridges, coolers, carbonated drinks, juices and curds have been reported over the past four days in retail outlets such as that of Big Bazaar. Electronics retail chain Chroma has also reported an increase of 8-10% in the sales of air conditioners and refrigerators.
The story is not different for manufacturers of beverages as well who are grappling with increased demand and lack of distribution. Rasna has reported a 20 per cent jump in sales over the past week and the stock has reached critical level among retailers in North India. Mother Dairy has also reported a growth of 25 per cent in the North which is the highest growth rate this year. One of the major challenges faced by beverage manufacturers and manufacturers of Dairy products is that due to heat wave several shops are downing shutters in the afternoon when the sale of these goods is at its peak. Distributors are also not able to supply the goods because of the heat wave. With the mercury expected to maintain the same levels in June as well and with Football World cup fever also increasing the manufacturers and retailers would be looking to close this season at a high.
