This Diwali, sort of dark for retailers

If you go to Bandra or Breach Candy or even Dadar — the traditional hotspots for Diwali shopping — this weekend, you’re likely to encounter a melee of shoppers, autos, cars and taxis. It looks like any other Diwali weekend. But walk into the shops and speak to the managers and owners, and a different picture begins to emerge. This year, on an average, retailers have experienced a 40% dip in Diwali sales.

It’s not so much the lack of shoppers, but the amount of money they’re spending on their Diwali shopping that’s dulled this festival for city retailers.

Manoj Patel, manager of Srinath Art jewellery, says, “The budget for Diwali shopping has reduced drastically. Earlier, those who would spend Rs20,000 on jewellery are now spending only Rs10,000.” Patel says the shop has seen a 30-40% dip in sales this year. He blames inflation. “The cost of gold plating has gone up 25%, so have the wages of the jewellery-makers. It’s bad for business.”

A rise in the cost of production, which is then transferred on to the consumer in the form of higher prices, is the main factor contributing to the dip in sales, according to many shop-owners. Babubhai Shah of Selection Clothings, says, “Cotton price has increased by 30%, plus the 10% excise duty. This has raised our prices. And this year, thanks to inflation, people don’t want to spend a lot on shopping.”

Discretionary spending is also on a downward trend, says Jyoti Tanwari, co-owner of Threads ‘n’ Homez, a fabric and trinket shop in Bandra. “People have started downgrading their shopping choices. They’re avoiding the expensive brands, and getting replicas made on the cheap,” she says. According to Tanwani, it’s the dip in the property and stock markets that has dipped people’s purchasing power.

However, not every sector is as badly hit. Siddarth Kaushik, senior manager at Vijay Sales, a well-known electronics store, says business is not bad, though they haven’t met the expected growth targets this year. “We were expecting about 25-30% growth in sales, but we’ve had only single digit growth.” According to him, LCD and LED TVs are the biggest sellers of the year; ACs, on the other hand, have not sold as much. Corporate gifting too, Kaushik says, is on the rise.

The only businesses that are completely unaffected are the sweet and dry fruit stores. People, it seems, are keen to spend their money on eatables. A representative from American Dry Fruits says they have had no problems with sales. MM Mithaiwalas, a famous Bombay mithai chain, seconds that.