Sunday December 10, 2023

Inflation reduces Eidul Fitr business to mostly window shopping

May 03, 2022

Despite the fact that markets across Karachi ran at full throttle this Ramazan, as they tried to recover from the great slump over the preceding two years caused by the deadly Covid-19 pandemic, traders seem dejected about Eidul Fitr sales because of the high rate of inflation.

Traders also slammed the Pakistan Tehreek-e-Insaf’s (PTI) announcement of holding political rallies throughout the country on the eve of Eid, because these gatherings often result in traffic jams and parking issues, which in turn can cripple Eid business during what is considered peak time.

All Karachi Tajir Ittehad Chairman Atiq Mir thinks that Eid sales in the city this year will hardly be able to cross the mark of Rs25 billion.

He estimates that last year, when the pandemic was still a major issue and a partial lockdown was in place, Eid business had crossed the Rs30 billion mark.

And the year before that, when the virus cases were at their peak, traders barely made Rs10 billion, arguably the lowest Eid sales in Karachi’s history. Moreover, dealers of electronic items have done only 40 per cent of their expected Eid business this year.

Mir says that Karachi has witnessed the worst Eid sales for three consecutive years. “We haven’t seen such a sharp decline in Eid business in decades.”

He points out that even last year, when the pandemic was still raging, Eid sales had been better, but this year, due to the “highest-ever” rate of inflation, business has been badly crippled.

“Tariq Road is considered the city’s basic shopping point, but there’s no rush there,” he says, explaining that shopkeepers have not stocked up clothes, shoes or jewellery, because Eid-related items are not selling as well as expected.

He estimates that out of every 100 people in the market, only 40 buy something. “The basic reason for this is a huge decline in people's purchasing power.”

He points out that the prices of kitchen items have been skyrocketing, and since every household wants to get their kitchen items first, Eid shopping is pushed down their priority list.

On the other hand, he remarks, traders do not have any money left to pay salaries to their employees. “They are operating in loss. Sellers or buyers — everyone is in trouble.”

Karachi Electronics Dealers Association President Rizwan Irfan says they have done only 40 per cent of their expected Eid business this year. “It should have met at least 60 or 70 per cent of our expectations.”

The reason for this, he explains, is the high rate of US dollar. He says that the price of a normal Rs40,000 air conditioner has jumped to Rs70,000.

“Who can buy such expensive electronic items?” he wonders. He points out that people these days cannot even afford essential commodities, and “electronic items are down on the priority list”.

Irfan mentions the trend of getting married in Karachi right after Eid, which usually means buying home appliances. However, he laments, even such households are not buying refrigerators, televisions or air conditioners, mainly because of inflation and the high dollar rates.

Raheel Paracha, president of the Victoria Welfare Association of the Victoria Shopping Centre (Zainab Market), says the Eid business at their market is better this year than last year. However, he laments, they have seen the lowest Eid sales, other than the two previous Eids during the pandemic.

He explains that since the price of dollar has shot up, a normal shirt selling for Rs1,000 last year now costs at least Rs2,200. “The prices of garments have more than doubled. How can there be no effect on Eid purchases?”

Cloth Merchant Association President Ahmed Chinoy had high hopes for this Eid. Unfortunately, he says, the kind of rush they had been anticipating in the markets after two years of the pandemic and lockdown restrictions was just not there.

“During the last three days of Ramazan, markets are usually crammed full of buyers. This time there’s hardly any rush,” he laments. When asked about the amount of business done this year, he says they have made around Rs1 billion, the same as last year.

He explains that a drive through Tariq Road will prove his point. It would usually take an hour to cross the busiest shopping street of the city during the last 10 days of Ramazan. “Last night I swiftly drove through Tariq Road in my car in 20 minutes. There was no rush of buyers.”

Chinoy says that the reason for this is the rise in the prices of goods, while at the same time, there has been no increase in the purchasing power of the people.

Regarding the prices of clothes, he says that a Rs2,000 suit now costs Rs3,000 or Rs3,500. He asks how an ordinary citizen can buy anything for Eid. “These have been very bad years for traders as well as consumers.”

He also criticises the PTI for holding political rallies on Chandraat. He says that traders are operating without any lockdown restrictions after two years of the pandemic, so political parties should not cripple their businesses with their protests. “Political rallies cause road blocks, and traders suffer.”

He stresses that the PTI should think before holding such rallies on Chandraat, because Eidul Fitr is a religious festival, so people should not suffer because of political activities.