Inflation dampens commercial activity in run-up to Eid

[Naveed Yaseen]

KCCI president says sales in market have dropped by 25-30pc this year

Sunday, September 20, 2009
By Gohar Ali Khan

KARACHI: Commercial streets are fully packed with Eid shoppers throughout the city and all main markets are open till late in the night, but sales have fallen by 25-30 per cent due to high inflation this year as compared to last year.

It was expected to be a pleasant business environment owing to the improved law and order situation this year. Hike in prices of all items has hit consumer confidence as everybody is complaining that rates are very high and they cannot afford all those items that they used to buy in the previous years. Spike in prices is compelling shoppers to buy only necessary items, such as clothes, garments, footwear, et cetera.

Around a million shops in the country’s 700 markets are poised to attract customers to the most demanding items ahead of Eid-ul Fitr, which is the biggest religious festival for Muslims. Every one longs to put on new clothes and shoes to celebrate the occasion with full religious fervour.

The Eid budget varies from family to family depending on their social status. But on an average, people spend at least Rs500-Rs1,000 per person on shopping that consists of edibles, footwear, clothes and household items. Well-to-do families spend thousands of rupees while the rich buy their wardrobe from abroad since they feel insulted to look for items in local markets on account of their social status.

The holy month of Ramazan is high time to cleanse their assets by giving the needy. Two and a half per cent deduction of Zakat on capital goes into billions of rupees and this amount is distributed among the poor and needy who are able to get new clothes without resorting to flea markets in the city.

Billions of rupees spent on Eid sales are contributed by various philanthropic organisations, as shalwar qameez and children wear are ordered at the garment wholesale markets, The News has learnt from a market survey.

Ramazan is not only a holy month, it is also a trading month that proves to be a boon for the business community, but markets everywhere in the city reported lacklustre economic activity in the run-up to Eid.

Shopkeepers were hoping to regain their losses suffered on account of a sharp 20 per cent fall in market last year. They were expecting more buyers and seeing more than 45 per cent spike in sales because the law and order situation is better.

Anjum Nisar, President Karachi Chamber of Commerce and Industry, said Eid sales have been the worst affected due to inflation and recession and sales in the markets have plummeted by 25-30 per cent as compared to last year. He lauded the government’s initiative to lift a ban on pillion riding as it will improve sales in the market, but rising inflation and recession have badly affected customer spending.

Falling rupee and rising prices breed travails as well as problems for the low income group. Abid Arain, a shopper, came with his family to Zabunnisa Street, Saddar Karachi for Eid spending after passing two hours they could not decide what they want to procure because their pocket does not permit them to meet basic needs. Finally they had to compromise on dresses and a couple of articles for their three children only without purchasing any thing for themselves. Many people belonging to the low-income group borrow money from kith and kin to fulfil wishes of their children.

Naeem, a trader at Liaquatabad market, said shoppers are making a heavy rush in markets but most of them are window-shopping, “customers visit my shop and haggle over price too much, due to surge in prices customers’ purchasing power is falling they yearn to make purchases but they cannot afford items on display.”

http://www.thenews.com.pk/daily_detail.asp?id=199330