THE horrific images of mangled bodies from Gaza and the woeful tales of IDPs may weigh heavy on all, particularly on the faint-hearted. Even generally, the mood may not be so festive, but people have to do what they have waited all year long — loosen their purse strings and shop to their heart’s content on Eid.
“Pakistanis probably find markets irresistible and the visits to the malls therapeutic. After perpetual stress from insecurity and the common worries of daily life, they pounce on any excuse to celebrate as best as they can,” a female psychologist commented on the trend.
Last week, there were visibly more families out in bazaars all over the country than at any point during the past few years. The marginal improvement in the law and order situation is said to have revived shopping in cities past midnight.
The spike in business activity during the current Eid season is not limited to Karachi, and has also been reported from most cities, as makeshift clusters of shops spring up, containers loaded with trendy items reach retail outlets and textile mills work three shifts
And the spike in business activity during the current Eid season is not limited to the commercial capital, Karachi, but has also been reported from most cities, as makeshift clusters of shops spring up, containers loaded with trendy items reach retail outlets, textile mills work three shifts, and wholesalers hope to clear the warehouses of stocks, riding the high tide of consumerism. Market players suggest 10-15pc expansion in the Eid market in the country.
If last year’s guess of the worth of the Eid economy — at Rs700bn — is assumed to be correct, this year’s market should rake in a whooping Rs770-800bn worth of business. This works out to be Rs4,500 per head, for a population of 180m, and adds up to Rs20,000 as the Eid budget per family.
“This estimate is clearly overstated. For a poor man, Rs20,000-25,000 is a princely amount that can only be dreamt about,” remarked an analyst from Lahore.
“The cost of living has escalated to a level where a monthly family income of Rs100,000 barely sustains a middle class standard. Making both ends meet is a challenge. There is no way to match family expectations at this level of salary on occasions such as Eid,” lamented a mid-ranking professional, while pointing out the growing wedge between the social classes.
“I know for a fact that retail turnover of a brand outlet at Dolman Mall in Karachi on the first day of Eid sale was Rs12m. The fabric and home textile company has about 20 outlets in Karachi and a total of 35 in the country, besides about five overseas. For me, Rs800bn is a conservative projection of the Eid market in a country where the propensity to consume is the highest in the region,” said a sales executive of a high-end brand in Pakistan.
“I believe others [employers, rich relatives and acquaintances, community or philanthropic organisations] spend for those 30pc subsisting below the poverty line who can’t afford to shop for themselves,” he added to justify his position.
The projected size of the Eid market is said to be supported by the SBP’s disclosure regarding the issuance of new notes a week before the festival. Last week, the central bank was reported to have injected Rs87bn in new currency notes in the market to match the public demand. Experts believe that people’s preference to use new notes for Eidi (cash gifts) generate this demand.
Eidi is a relatively small but crucial spending head of a family’s Eid budget, normally constituting less than 10pc of total spending on the festival. If Rs80bn of the total Rs87bn in new notes is actually meant to be distributed as Eidi, the projection of the Rs800bn Eid economy may be realistic.
Mustafa Mosajee, MD of Nielsen Pakistan, a market research company, declined to comment on the projected size of the Eid market, but confirmed that consumer confidence is currently at a 3-year high.
A closer study of Eid budgets of families belonging to varied classes and regions reveals that the biggest chunk is consumed by clothing, followed by footwear, home fabric, crockery, cosmetics and accessories.
“Sales of big retail stores in the month preceding Eid is estimated to be as high as 40pc of their annual sales volume,” Samir Amir of the Pakistan Business Council mentioned in a discussion.
The anecdotal evidence suggests higher vibrancy in markets in Karachi as compared to Lahore, where activity is said to be lacklustre. “With many other cities coming up fast, market sentiments can no longer be gauged by focusing on Lahore,” a business leader in Faisalabad commented.
Sales in Peshawar are said to be consistent with the trend of 10pc annual increments. However, the pace of business activity is reported to be comparatively leaner in Quetta.
Meanwhile, talking about Karachi, Atiq Mir, Chairman of the All Karachi Tajir Ittehad, told Dawn over telephone that, “Last year, after a calculating exercise, we arrived at the volume of the Eid market in the city as Rs70bn. This year, we hope to hit the Rs80bn-mark”.
Published in Dawn, Economic & Business, July 28th, 2014