KOLKATA: Consumer goods makers and retailers are scaling back discounts as higher input costs and volatile raw material prices squeeze margins, with average price incentives 5-10 percentage points lower than a year earlier across online and offline channels.Companies are also putting fewer products on sale, signalling a shift away from aggressive promotions despite ongoing end-of-season sales, said industry executives.Electronics and smartphone brands have cut direct discounts on maximum retail prices, cashback offers and card-based promotions by 5-7 percentage points compared to last year, according to market tracker Counterpoint Research.Retailers, too, are trimming discounts even as they struggle to fully pass on higher input and freight costs triggered by the West Asia crisis due to intense competition.
This year, it is around 40%,” he added.Commodity Inflation BitesSingh said Woodland has raised prices by 5-10% while absorbing a similar increase in costs as consumers remain sensitive to price points.Smartphone and laptop prices have risen 30-40% over the past six months after memory chip costs surged two- to threefold.
Prices of air-conditioners, refrigerators, and smart televisions have also gone up by up to 15-20% due to commodity inflation.Forex reserves rise $7.3 billion as FCNR & ECB flows pick upHowever, manufacturers have absorbed part of the increase, leaving less room for discounts.
