KARACHI: Pakistan’s retail sales during Eid-ul-Fitr fell sharply compared to previous years, retailers said, as shoppers felt the highest inflation in decades.
The lead up to Eid al-Fitr, which will mark the end of the holy month of Ramadan in Pakistan on Saturday, traditionally sees the highest sales of the year. But this year the country is suffering from severe economic crisis.
“Sales are down 20 percent in all categories except women’s clothing,” Tariq Mehboob, chairman of the Chain Store Association Pakistan (CAP), told Reuters.
Inflation hit 35 percent in March, fueled by currency devaluation, a return to subsidies, and higher tariffs to secure a $1.1 billion bailout package from the International Monetary Fund.
Food inflation has soared to over 47 percent, and even the wealthy professional class is making lifestyle changes to cope with rising prices.
Asad Shafi said, “In the last two years, Pakistanis have lost more than 50 percent of their wealth in depreciation, so now you are selling 50 percent to people with less available funds, while 100 percent in cost.” There has been an increase,” said Asad Shafi. , the owner of a women’s clothing brand.
“Expectations of fashion retailers are so low that it is acceptable to break even or even meet minimum sales to survive,” he added.
Asfandyar Farrukh, co-founder of CAP, said Eid shopping seems to have started early and peaked earlier, coinciding with salary payment days, and consumers expecting price hikes.
“Established brands are not seeing as big a drop in revenue as local markets because they have more upper-middle and high-income consumers,” Farrukh said.
Usually bustling bazaars and shopping centers targeting the middle and lower middle class, such as Anarkali and Liberty Market in the eastern city of Lahore, both have low customer numbers.
Ashraf Bhatti, president of the Anarkali Traders Association, told Reuters that Eid shopping had dropped by 50 percent this year, while Sohail Sarfraz Mani, president of the Liberty Market Traders Association, estimated the drop to be around 35 percent.
The drop in sales adds to the slowdown in Pakistan’s $350 billion economy, which has struggled in recent months amid tough stabilization policies, including the central bank’s hike of interest rates to a historic high of 21 percent.
Pakistan expects its economy to grow by 2 percent during the current fiscal year. However, in April, the World Bank cut Pakistan’s growth estimate to 0.4 percent from 2 percent.
