Pressmediaofindia
Related Articles
23-04-2023
Bureau Report
ISLAMABAD/ LAHORE/ KARACHI: Retail sales in Pakistan have witnessed a sharp drop compared with previous years in the run-up to the Muslim holiday of Eid al-Fitr, retailers say, as shoppers feel the pinch of decades-high inflation.
The lead up to Eid al-Fitr, expected to fall on Saturday in Pakistan to mark the end of the holy month of Ramadan, traditionally sees the highest sales of the year but this year, the country is experiencing a crippling economic crisis.
“There has been a 20 percent reduction in sales across all categories except women’s clothing,” Tariq Mehboob, chairman of the Chain Store Association Pakistan (CAP) and CEO of Royal Tag, a clothing brand for men, told Reuters news agency.
Inflation clocked in at 35 percent in March, fuelled by a depreciating currency, a rollback in subsidies, and the imposition of higher tariffs to secure a bailout package of $1.1bn from the International Monetary Fund.
Food inflation has risen to more than 47 percent, and even the wealthier professional class is making lifestyle changes to deal with rising prices.
“Pakistanis have lost more than 50 percent of their wealth in the last two years in the form of depreciation, so you’re now selling to people with 50 percent less available funds, while the cost has gone up 100 percent,” said Asad Shafi, owner of female clothing brand Cross Stitch.
“The expectation of fashion retailers is so low that even meeting breakeven or bare minimum sales just to stay alive is acceptable,” he added.
Asfandyar Farrukh, co-founder of CAP and managing director of Hub, a leather goods store, said that Eid shopping appears to have started sooner and peaked earlier, coinciding with salary pay days, and customers anticipating price increases.
“Established brands are not seeing as big a drop in revenues as local markets as they are frequented more by upper-middle and upper-income customers,” says Farrukh.
Usually bustling markets and shopping centres targeting the middle and lower-middle class such as Anarkali and Liberty Market in the eastern city of Lahore have both reported fewer customers.
