Across India’s malls and high streets, the mood at fashion shops is sombre - foot traffic is down, sales are low and many brands are embarking on steeper-than-usual discounts for longer-than-usual periods of time.
The culprit? Sky-high food inflation after erratic monsoon rains damaged crops and disrupted supply chains.
Prices for tomatoes have rocketed, at one point close to five times since June, while those for onions, another staple in Indian cooking, have risen 80% in some areas like New Delhi. Food inflation for July hit a staggering 11.5%, far more than 4.6% in June and marking a three-year high.
As purse strings tighten, the pain felt by India’s clothing and shoe retail sector – worth an estimated $62 billion in 2022 according to Euromonitor International – is fanning concerns about the health of consumer spending which had already been slowing even before the shocking rises in food prices.
At a Zink London outlet in a Mumbai mall, for example, staff at the domestic women’s clothing chain have been calling 10 customers each per day and sending product pictures via WhatsApp in an effort to bolster sales, according to a store manager who declined to be identified.
That said, Indian consumer spending is not uniformly down in the dumps. The country’s biggest cinema operator PVR Inox recently clocked its highest daily box office revenue of $5 million, driven by some hit Bollywood offerings.
But worries are mounting about the threat that inflation and high interest rates pose to consumer spending.
Published in The Express Tribune, August 29th, 2023.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ