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In-store mobile phone sales dry up on rising temperatures

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Mobile phone retailers are feeling the pinch of the heatwave affecting parts of North India, with daily footfalls, especially during the day, plunging from the second week of May, dragging business down by nearly half. As a result, market trackers estimate sales in May are likely to decline 3-4% month-on-month while the online channel is expected to gain share at the cost of brick-and-mortar stores.

Among the offline channels, consumers prefer the air-conditioned large-format retail (LFR) stores over the regular brick-and-mortar ones, besides the ecommerce platforms. The offline channel is also facing challenges related to staff attendance, owing to the extreme heat.

“Regions such as Delhi, Rajasthan, Haryana and UP have been particularly affected by the heatwave and power cuts in Delhi, resulting in a drastic 50% decline in business,” said Kailash Lakhyani, chairman, All India Mobile Retailers Association that represents 1.5 lakh mobile retailers across the country.

Lakhyani added that preferred shopping hours for customers have shifted to the cooler times of the day, with most purchases happening between 9 am to 11 am and 6.30 pm to 10.30 pm in the evening. Retail stores without air-conditioning – which make up the bulk of the offline channel – are seeing a larger decline in footfalls while sales in large LFR and modern trade outlets are up.

“Despite the challenging conditions, LFR and modern trade businesses have witnessed a 5-10% surge in business in May, with the majority of transactions taking place in the evening between 6 pm to 10 pm,” Lakhyani added.

The IMD has forecast severe heatwave conditions across 10 states in North India since the middle of May with temperatures touching 50 degrees in some areas, with some respite expected from May 31.Despite falling footfalls and sales, there has been no decline in shipment levels entering channels, according to market trackers, though sell-outs in May could fall.”According to our retail audit, there has been a stark decline in footfalls in retail stores since May 13, which is expected to result in a 3-4% decline in sell-outs in May, which is expected to pick up again in June,” said Tarun Pathak, research director, Counterpoint Research.

Pathak added that customers are now transacting more on online platforms, resulting in its share increasing from 36% in Q1 2024 to 40-42% in Q2 2024.

A New-Delhi based retailer with a store in high-street New Friends Colony said footfalls have reduced nearly 40% during the day since the past two weeks, with customers only visiting stores if there is a necessity. The retailer is now working with courier companies to set up home deliveries to service customers.

He added that stores in Delhi are also struggling with absent staff who choose to refrain from travelling from far distances.

Another retailer in Kolkata, West Bengal, said heavy rains and high humidity levels are affecting footfalls in the region, with many stores downing shutters during the day.

Adjusting to the changing conditions, retailers are installing air-conditioners in their stores and providing refreshments to customers walking in during the day, retailers said, adding that some customers are also deferring their purchases for later.

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