Inflation, the recent bomb blasts and the economic slowdown have hit businesses that depend on frenzied festival shopping in the run-up to Diwali. Small-scale fireworks makers, retailers and dry-fruit sellers say customers are cutting back.
A study conducted by the Associated Chambers of Commerce and Industry of India (Assocham) shows that spending on Diwali gifts by firms has fallen by around 25%. The business, which was worth around Rs2,000 crore last year, is estimated to fall to Rs1,500 crore, the industry body says. The Retailers Association of India was also quoted in a news report as stating that year-on-year sales growth had halved to 15%.
C.B. Aggarwal, owner of Aggarwal Sweets in Kalkaji,?a popular chain in Delhi, says business is down by 30%. “The bomb blasts have made people cautious about venturing into the market. The problems in the stock exchange too have made people reluctant to spend,” he says.
Fireworks wholesalers in Tamil Nadu, who conduct 90% of their business during Diwali, say it’s been a bad year. “Input costs have risen by 40% at a time when people are reluctant to spend. On top of that, the police (in Tamil Nadu) are not issuing licences for wholesalers and retailers till two days before the festival. This year is not looking good,” says S. Bhasker, a wholesaler in Chennai.
The Blind Relief Association’s popular Diwali mela in New Delhi, which usually attracts thousands of shoppers, has not seen as many customers as last year. “It is a bit dull this year and the crowd does seem leaner. I think this is on account of the slowdown,” says K.C. Pande, executive secretary of the Blind Relief Association, adding that sales figures were not immediately available.
Fireworks and sweet-store owners in New Delhi say business is slow. Sales of fireworks are expected to be 25% lower.
A random survey of middle-class consumers by Assocham in Delhi shows there hasn’t been much interest in purchasing gold. A majority of respondents surveyed said they would wait for prices to fall further before they buy ornaments.
Vipul Goel, a dry-fruits vendor in north Delhi’s Khari Baoli, says business has taken a hit. “We have seen a slump of around 10%. The customers are definitely cutting purchases,” he says. “Across the board, prices of dry fruits have gone up,” he adds.
Text by K.P. Narayana Kumar
Photographs by Ramesh Pathania