Welcome to Business Outlook
Related Articles
It was 11.45 pm on Tuesday. Shopping malls and markets usually remain shut at this hour of the day. But, the bustling shopping district for clothing and lifestyle items in the Mirpur-1 area was abuzz with shoppers.
Some came in drove and they were all in a festive mood, going from one outlet to another to buy their desired clothes and other items to celebrate Eid-ul-Fitr, the biggest religious festival for Muslims and the country’s biggest shopping season, which generates half of the total annual sales for apparel sellers.
Habibur Rahman was one of the shoppers. He came with his family.
“No matter what the economic condition is, people buy clothing items on the occasion of Eid. But prices are very high compared to last year. So, I am choosing the items with cheaper rates,” said the private-sector employee as he browsed through clothing items at an outlet of a lifestyle brand.
Almost at the same time, Shariful Islam was shopping at the Bashundhara City Shopping Mall with a friend. The 40-year-year-old executive bought two shirts for his six-year-old son, one shirt for his middle-aged maternal uncle, and one panjabi for a friend.
Apart from these shopping destinations, all other markets in the capital city are registering a higher turnout of Eid shoppers as the country has gravitated towards a holiday mood after the closure of offices for five days from Wednesday.
Many, however, are avoiding daytime when it comes to going to markets amid the heatwave, which has been sweeping across the country for the last several days. Instead, they are choosing evening hours.
Despite the crowd, businesses are not upbeat this year as consumers, particularly low and lower-middle-income groups, are cautious in spending as soaring prices and living costs have squeezed their purchasing capacity. So, many of them, like Rahman, will have to spend on a tight budget.
Sheikh Nafiur Rahman, a private job-holder who lives in Kalabagan, says he could not buy anything for himself as his Eid budget has overshot after purchasing items for his family members and relatives owing to higher prices of products.
And sellers retailing clothes, footwear, gadget and home appliances say they have not expected good sales this Eid. An elevated level of inflation for nearly one year has been the main factor.
In March, consumer prices jumped to a seven-month high of 9.33 per cent following 8.78 per cent in February.
The fire incidents at Bangabazar, one of the major wholesale and retail markets in Dhaka city, later in New Market and Uttara, have had a dampening effect on Eid sales.
“This year we have seen a very typical season across mass consumers thus far, as we see significantly lower footfalls in the markets than any other Eid,” said Zaved Akhtar, chief executive officer of Unilever Bangladesh, one of the largest fast-moving consumer goods companies in the country.
“People are being value-conscious and therefore, are more restrained in shopping. They are preserving cash and limiting the purchase of discretionary FMCG items as much as possible. Wherever they do decide to make purchases, they are opting for smaller sized packs or lower-priced options.”
Shoriful Islam, assistant general manager for marketing at Grameen Uniqlo, said the post-Covid and the Russia-Ukraine war have led to an economic crisis.
“People are focusing more on buying essential products. As a result, the interest in fashion products has waned. So, the response of customers this year is less than in last year.”
The buying mood has prompted Grameen Uniqlo to change its strategy. The design has been done in a way so that customers can keep wearing the clothing items after the festival as well. The company has focused on casual dresses rather than selling panjabi.
Abu Obayed Rony, owner of Fire Fashion, a retailer of readymade clothes in Noorjahan Super Market, opposite to Dhaka College, says sales have decreased by 10 per cent this year compared to last year.
Sales at Old Dhaka’s Islampur, one of the biggest wholesale clothing hubs in the country, have also been affected.
“Sales are down 20 per cent,” said Nesar Uddin Mollah, general secretary of the Islampur Cloth Merchant Association.
However, sales of footwear may grow 4-5 per cent this year from the previous year, according to Arfanul Hoque, head of retail at Bata, one of the top footwear manufacturers and retailers in Bangladesh.
“But the growth is not impressive at all.”
Raihan Kabir, marketing manager and e-commerce lead at Apex Footwear Limited, said the sales of footwear items have not reached their expected level yet.
“Due to the heatwave, customer turnout has been low. Since many people are heading to their village homes, they might carry out shopping in their home towns.”
Nizam Uddin, a garment retailer in Jamalpur’s Sarishabari upazila, says sales shot up in the seven days to Eid.
“Sales have been good so far. It would have been even better if the temperatures would not have gone up sharply.”
Apart from clothing and footwear, high prices have affected demand for mobile phones, wellness items and other luxury items as many budget-conscious consumers are opting for cheaper items.
Mobile, laptops and accessories were sold in large numbers ahead of Eid-ul-Fitr in the previous years, but sales have dropped as much as 40 per cent this year, said Taskin Hossain, head of marketing at Gadget and Gear, a smart device seller with 24 outlets.
“People are not buying gadgets, especially high and medium-range mobile phones. Either they are saving money for essential items or they have no money at all.”
Sabbir Hasan Nasir, executive director of ACI Logistics Ltd, the operator of top grocery chain Shwapno, described the sales of commodities as good.
“But the sales of more expensive items such as cosmetics and lifestyle items are low. We are seeing an aversion in consumers and they are becoming more price-sensitive. Their confidence is low and they are mostly buying very essential products.”
The heatwave has, however, been a boon for home appliance retailers as demand for air coolers has surged.
“We have received some relief from the slow sales that we experienced at the beginning of Ramadan. AC sales have gone up significantly in the past one week,” said Ritesh Ranjan, head of business at Transcom Digital, adding that sales are particularly good in the Rajshahi division.
Augustin Sujan, deputy operative director of Walton Hi-Tech Industries PLC, said the sales of ACs have increased by around 200 per cent in the last 15 days.
Helal Uddin, president of the Bangladesh Shop Owners Association, they had hoped that the overall retail sales of goods would stand at Tk 250,000 crore this Eid.
“But due to the increase in the cost of living, the fire incidents in several markets and the heatwave, the overall sales may be Tk 125,000 crore.”
Retailer Nizam added: “The presence of customers drops sharply between 1pm and 7pm owing to higher temperature.”
(TDS)
