Retail biggies outdo each other with price challenges

Faced with tough competition and a slow economy, hypermarkets run by retail biggies are outdoing each other with price challenges, aggressive discounts and combo offerings for the Independence Day sales.

Mukesh Ambani's Reliance Retail has come out with a 10-day 'Price Challenge' from August 10-19 at its Reliance Fresh, Super and Mart stores, where it challenges customers to find a cheaper deal at other stores.

If they do, Reliance Retail claims it would pay double the difference.

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"We are aggressively offering deals in value formats, Digital and Trends for the past two-three years. If you look at all offers, ours is the most aggressive in terms of discounts. We have the longest period of offer," said a Reliance Retail executive.

Reliance plans to open four to five of its consumer durable stores, Digital, during the week ending August 12, to capture the sales opportunity.Bharti's 'easyday' has gone a step ahead and launched 18-day 'Freedom from inflation' offer.

The chain is also challenging consumers to find lower prices, saying it would match that if buyers indeed get better deals elsewhere. Future Group's Big Bazaar, which is holding a six-day 'Maha Bachat', is giving category-wise combo offers in kitchenwear, grocery and fast moving consumer products.

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"Instead of promoting single product and single brand, we are offering combo offers in different categories," said a Future Group spokesperson.

For instance, the chain is offering a three-burner glass top gas stove, a three piece non-stick cookware set, pressure cooker and a juicer for Rs 7, 295, which is 43 per cent lower than its stated price.

"Similarly, we are giving 50 per cent off on toys and travel bags. We are focussing on user segments and designing offers around that," the spokesperson said. Big Bazaar is the first chain to start promotions around national festivals, such as Independence Day and Republic Day, to push sales in its stores.

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"Retailers are using the national festivals like these to give discounts. When goods are not selling at full price, they are forced to come out with discounts," says Prashant Agarwal, deputy managing director at Wazir Advisors.

"People are waiting for discounts to buy products. If 30 per cent of retailers' sales used to come from discounted merchandise earlier, now it has gone up to 50 per cent, which is hurting retailers' profitability," Agarwal added.

Besides, most of the retail chains, such as Big Bazaar and Bharti's easyday, have built their sales campaigns around inflation. If Big Bazaar's campaign has the tagline of 'Mehangai pe hala bol' (attack inflation), Bharti's campaign is 'Freedom from inflation'.

"Inflation is hurting everybody and pushing household budgets. Therefore, everyone is focussing on giving relief to customers from high prices," says Pawan Sarda, chief marketing officer, Future Group.