NEW DELHI|KOLKATA: Muted growth has forced consumer goods retailers to scale down inventories up to 30% anticipating poor sentiment hitting festive season sales.Smartphone retailers said stocking for the month is down 30% over a year ago and is likely to remain low because of sluggish sales.“If ecommerce companies run massive discounts during their annual sales, stocking would be further reduced in the run-up to Diwali,” said Arvinder Khurana, president of All India Mobile Retailers Association, which represents over 25,000 neighbourhood outlets.Executives of leading appliance retailers like Great Eastern and Kohinoor said there is no growth in inventory stocking for the festive season in contrast to usual practice. Retail outlets had seen muted sales last year as well. “There is unsold inventory from July and August. As a result, we are entering September and October with the same level of inventory as in last year,” said Pulkit Baid, director at Great Eastern Retail, which runs over 60 stores in East and North. Panasonic India chief executive Manish Sharma said the industry is considering ways to spread out sales across retailers, big or small, to avoid inventory accumulation.Between January and June, appliances had grown volume sales by 15%, smartphones by 9% while it stayed flat for TVs, according to market tracker GfK . Sales in July-August, however, crashed 7-10% over the same period last year.Fashion and lifestyle retailers said some companies have either cut down on inventories by 5-7% from last year or are being choosy about the brands they would stock.“While production process for the festive season starts as early as March, there are some retailers who were in touch with their vendors and managed to cut inventories at the last minute as they sensed Diwali won’t be upbeat,” said Sundeep Chugh, managing director and CEO of Benetton India.Indian consumers are shying away from spending amid negative sentiments of an economic slowdown, a volatile stock market and the GDP growth rate hitting a sixyear low of 5% in the June quarter.The International Monetary Fund (IMF) revised its estimate that the Indian economy will grow at 7% this fiscal, instead of 7.3%, on a weaker-than-expected outlook for domestic demand, whereas the Asian Development Bank (ADB) has lowered its growth forecast to 7% for this year on the back of fiscal shortfall concerns.“People are also expecting the festive season to lift demand. In general, they should keep it well-stocked, because this is the time when they are expecting additional business and revenue,” said Pinakiranjan Mishra, partner and national leader, retail and consumer products, at EY India.The fast-moving consumer goods (FMCG) sector, which has been in the red through the past three quarters, is also cautious about inventories like Diwali gift packs.“We will not push all stocks in trade channels at once. We will assess consumption offtake in the initial phase of the festive quarter and scale up accordingly. This is because consumption has been soft. We are hopeful it will pick up,” said Varun Berry, managing director at Britannia Industries, the country’s largest biscuits maker.The October-December festive season contributes 35-40% of annual sales for most consumer companies which stock heavily for this period to make the best use of the biggest shopping opportunity of the year. The season starts with Ganesh Chaturthi, followed by Onam, Navratri-Durga Puja, and peaks in Diwali.The chief executive of a large apparel company who didn’t wish to be quoted, said that when growth was in double digit, it made sense to stock more, but with a flat or low single-digit growth, most retailers would not want to sit on an inventory pileup.(With inputs from Shashwat Mohanty)