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Air-conditioner Sales: Summer Sales Plummet as Monsoon Hits India's Cooling Market, ET Retail

Published 3 days ago4 minute read
Monsoon spoils summer sales: Cooling products, ice cream, jobs all take a hit
By , & , ET Bureau
plunged over 30% in the April-June period from a year ago while that of refrigerators dropped 12-15%, making it the worst summer for them in a decade and more after unseasonal rain cooled temperatures, according to large manufacturers. Besides, the June-September monsoon has been ahead of its usual schedule. ACs and refrigerators see peak sales during the hot season.Sales of ice-creams and beverages also slowed down from last year, said industry executives and fast-moving consumer goods (FMCG) retail analytics platform Bizom.

This has hit industry wide seasonal job creation, which declined in some cases by as much as 30% from the year earlier in sectors such consumer durables and electronics, FMCG, retail, supply chain and logistics, according to staffing firm Adecco India.

Since consumer durable manufacturers were the worst hit due to poor cooling-product sales, the anticipated growth in hiring did not happen, said business services provider Quess Corp.

“AC sales for the industry have declined 30-35% year on year in the April-June quarter whereby most companies have cut down production as dealers are piled up with stock,” said Pradeep Bakshi, managing director of market leader Voltas. “It’s the worst summer in terms of growth after almost 15 years.”

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The India Meteorological Department (IMD) had predicted a harsh summer, encouraging companies to push inventory to stores, fearing a shortage like last year, when a nationwide heatwave took sales to a record. AC sales shot up 55% in the summer of 2024 from the year earlier.However, intermittent rain and lower-than-normal temperatures in most parts of India in the critical June quarter muted sales. Growth rates were further impacted by last year’s high base.
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Stocking of beverages at stores rose 11% in April from the year ago, then slowed to 3.4% in May. Beverage sales fell 9% in the first half of June from the year before, according to the latest data by Bizom, which tracks orders at eight million neighbourhood stores. A year ago, the beverages category grew 22-24% in May and June. Ice-cream orders at kiranas in the June quarter grew 3-7%, much lower than 17-26% in the same period a year ago.

Retail stocking of summer products started well in February but tapered off sequentially due to unseasonal rains and a shrunken season, said Harshit Bora, analytics head at Bizom.

Dairy brand Amul’s managing director Jayen Mehta said while the season started early in February, weather played spoilsport during the peak season, leading to low-single-digit growth for the ice-cream industry.

“Amul, however, managed to buck the trend with good growth due to capacity expansion and intensive focus on the category across channels,” he said.

FMCG demand worsened to a two-year low during the March quarter, with volume growth at 3.5%, according to research firm Kantar. Sales tracker NielsenIQ said urban India demand for FMCG products is lagging behind that in rural areas with volume growth having slowed across categories in the March quarter. Electronic products grew 4-6% in the last two quarters with premiumisation driving sales.

After the festive season, the most seasonal temporary jobs are created in the summer months, which have been a washout this year. In categories such as ACs, refrigerators, beverages, ice-cream, glucose and talcum powder, the June quarter accounts for almost 40-50% of annual sales.

After 2024’s record temporary summer job creation at 20-25% growth from the year before, there has been a considerable decline in 2025, especially in consumer-facing sectors such as consumer durables, ecommerce and seasonal products, said Deepesh Gupta, director and head of general staffing at Adecco India.

Expectations of a 12% growth in hiring from the year before were belied by a softer summer season, said Lohit Bhatia, president of workforce management at Quess Corp. He said the north was the worst hit.

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While companies have cut production to clear excess summer inventory, they expect sales may pick up around the festive season with an overall improvement in demand due to the effect of income tax cuts, lower inflation and a normal monsoon.

The festival season following a poor summer always sees a boom, said B Thiagarajan, managing director of AC maker Blue Star. Besides, new energy efficiency labels are likely to create product excitement, he said.

“There is a change in energy label next year when new models will be launched. So, we expect a pick-up in Q3 and Q4,” he said.

Coca-Cola global chief operating officer Henrique Braun recently told ET that the company is trying to reduce the impact of seasonality.

PepsiCo bottler Varun Beverages chairman Ravi Jaipuria had told analysts last month that the company doesn’t make month-by-month plans as weather patterns vary and the rains have come early this time. The company is targeting double-digit growth this year.

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