It's a buyer's market this Divali
Provided, of course, you have small change left after spending the big bucks on onions, dhania and dal, says Sanjay Manchanda

CONTRARY to general expectations, the festive season of Divali this year has brought with it a buyer’s market in Chandigarh. For those planning to bring home a utility item or wanting to buy fresh wardrobes for themselves, but had to postpone these plans due to some unforeseen expense, this is the time to effect a purchase when the retailer’s profit margin for most of these goods has hit rock- bottom.

Surprisingly this year, the prices of all cotton and synthetic yarns, including clothes, sarees and variety garments, have gone down drastically as compared to last year’s Divali. "Due to over-production of especially synthetic clothes, the supply has far exceeded the demand, as a result to which the prices have gone down by almost 35 per cent since October last year," says a local garment dealer. "At the same time because of low rates, the sales have also registered an increase of 20 to 25 per cent," he adds in the same breath.

"With the flooding of markets with clothes, our profit margin has been reduced to a bare minimum and, therefore, the annual turnover has also gone down," rues another cloth merchant of Sector 7.

Similarly, gold prices have also shown a downward trend due to recession in the market. While on last Divali, gold was available for Rs 4600 a tola, this year’s rates have varied between Rs 4200 and Rs 4300 during the last two months. "Gold jewellery may have become cheaper, but the sales have not gone up correspondingly", explains a Sector 22 goldsmith. "Probably, the rise in the prices of essential commodities has already hit the common man’s budget and he is not interested in buying expensive items".

Another jeweller in Sector 19, however, hopes that the sale of jewellery will pick up on the weekend preceding Divali as people know that this was an ideal time for buying a piece of jewellery because a few weeks after the festival, the gold prices generally start shooting up.

Similarly, the profit margins on most of the consumer durables have also come down, in a different form though. During this year’s Divali purchase season, the market-savvy corporates have come out with a spate of gifts, discounts and offers as never before. A "free gift" with every purchase is the order of the day.

Says a leading consumer goods marketing manager: "This has now become more of a compulsory market mantra, i.e. if you cannot beat them, join them." There is no option when you see the once discerning consumer switching brand loyalty in order to get that ‘extra’ — what he deciphers as value for money.

A city-based dealer confirmed the frenzy of free offers. "These things never happened in India before. No company used to offer such give-aways until Akai stirred the market. The response to change has been tremendous. As of today, once any such scheme is launched, we are inundated with enquiries."

Avnish Chauhan, an MBA, who claims to have recently booked an audio system, said: "Whatever be their arithmetic jugglery, such offers do catch my fancy. When I get other products at the same price as this one, why shouldn’t I go for the one which offers a better value?"

However, at the same time, the Divali revellers are in for some disappointing news. This season, mithai prices have increased by at least 15 per cent as compared to 8 per cent last year.

The cost of plain burfi, presently Rs 120 per kg has shot up to Rs 130/140. Almost all the sweets made of paneer and khoya cost between Rs 120 and Rs 220 per kg. Its prices are also expected to increase by about Rs 30 per kg by the weekend.

Weather conditions and the spiralling khoya and ghee prices are some of the reasons cited by shopkeepers for the hike in mithai prices this season. "Earlier, Divali used to come a little late, so we used to preserve these products. This season, we cannot even preserve them as it is still hot. The products will rot if we keep them for a long period," says a leading sweets shop-owner of the city.

Dry fruit traders, too, have experienced a ‘dry’ season so far, not only because the prices of dry fruit have gone up but also because the slow-down in the economy has hit business hard. "The indications are that the business may be down to 70 per cent this Divali," says a local dry fruit trader.

Retailers are facing a tough time. The corporate demand, particularly from institutions, including the automobile sector, has come down. The orders have reportedly come down to 700-750 boxes in Chandigarh from 1,000 boxes last year.

Dry fruit retailers opine: "People enjoyed Divali in 1996, while it was bad last year and it is expected to be worse this year."

Similarly, the prices of crackers have also gone up by 15 to 18 per cent. The main reason is attributed to the unprecedented hike is the need to adhere to stringent fire safety measures introduced for the first time this year. "To obtain a licence for putting up a stall is such a pain that many of us have abandoned the idea of selling fire-crackers this year," says a stall owner in Sector 20. "The demand is increasing but the supply has been less because of less production, resulting in shortages, which will lead to a further increase in the prices as Divali approaches," he reasons.

So, with basic food items like rice, wheat, spices, tea, coffee, seasonal vegetables and fruits, edible oils and, above all, the newly-crowned "king of vegetables", the onion, already showing a phenomenal increase, even the upper middle classes would feel the pinch of Divali this year, let alone the poor and lower middle classes. A commoner’s cup of woes is full, what with the all-India consumer price index showing a record-breaking increase of 30 per cent in the last seven months.

Chandigarh’s consumer price index has also shot up by leaps and bounds, particularly with the onset of monsoons. In January this year the price index started with 368 units to gradually move up only eight units in the first six months. However, in July, it sharply rose to 424 from 376 in June, and further went up to 452 units by the end of August. Last year, the city’s price index remained stable with 330 in January, 343 in June, 348 in July, 356 in August, 358 in September and 359 in October.

Clearly, therefore, the essential commodities are flying out of the common man’s reach. In the current scenario, a poor man can only celebrate the festival of lights in gloom as he finds himself falling out of the frying pan into the fire.