Tag: inflation

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Kharcha paani

Cheaper to buy space in city malls?

ASSOCHAM report finds that mall space in Mumbai and other metros has dropped by 30% rental value with lower footfalls.
by The Editors | editor@themetrognome.in

Rising inflation and higher living costs have taken a toll on our favourite pastime: shopping. Tighter budgets are prompting many Indians to stay away from shopping malls. This has resulted in lower footfalls and high losses for retailers. On the other hand, if you are looking to buy shop space in a mall, now might be a good time to do it.

As per a new study published by ASSOCHAM (Associated Chamber of Commerce and Industry in India), a “slowdown in consumer footfalls, coupled with online shopping that provides convenience of delivery at door steps, have led to troubles for the shopping malls which are suffering 20 to 25% vacancy rates and 30% drop in rentals in the last one year.” The study finds that this trend runs parallel to a global one, where declining footfalls in retail space in over 200 shopping malls across the US, UK and other countries has lowered commercial space rentals. In the US, the malls are facing 46% vacancy rates whereas malls in UK are impacted by 32%.

“On the other hand, the  Indian e-commerce industry appears to be unaffected by the demand slowdown and is likely to clock a compounded annual growth rate (CAGR) of 35% and cross the $100-billion mark in value over the next five years,” the study finds, pegging the e-commerce industry in India presently at $17 billion.

Continuing on the strong growth momentum of 2015, the e-commerce industry is estimated to see a 72% increase in the average annual spending on online purchases per individual in 2016 from the current level of 65%, the study said. Online shopping mainly focusses on purchasing electronics, books, music, apparel, sporting and outdoor goods.

“It is true that the online shopping has shown handsome growth while the brick and mortar malls are witnessing slowdown. It looks that the growth in e-commerce looks impressive because of quite a low base and increasing penetration of internet,” ASSOCHAM Secretary General DS Rawat said. “The brick and mortar outlets on high streets and inside malls are trying to hold on through lower prices and deals. In India, sales in shopping malls have dipped by 25 to 30% and footfalls by 15 to 20% compared to the same period last year.”

There were around 50 operational malls in 2005, a number that rose to 610 in 2015 in top 10 cities. Additionally, with improvement in infrastructure such as logistics, broadband and Internet-ready devices, there is likely to be a significant increase in the number of consumers making purchases online, the study said. It estimates around 65 million consumers in India to buy online in 2015, as against around 40 million in 2014.

“The challenges of suburban sprawl, worsening automotive traffic, rising fuel prices and the increased difficulty of time management in modern families have made going to the mall a planned activity,” adds the paper.

Mobile technology is also having a huge impact on brick and mortar retail. Amazon recently reported that roughly 8 to 10% percent of their total sales are being generated by mobile devices, and expect this trend to continue upwards.

(Picture courtesy www.indiantravels.com. Image is used for representational purpose only)

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Kharcha paani Uncategorized

Vegetables prices up by 80% in two months

The retail and wholesale gap has reduced in two months in Mumbai, but is on an upswing in other places.
by The Editors | editor@themetrognome.in

Just how expensive have vegetables become in the last two months? A recent study by ASSOCHAM (Associated Chambers of Commerce and Industry of India) maps out the exact numbers.

The ASSOCHAM study of 33 ‘mandies’ in India has revealed that during April to June 2014, the gap between the wholesale and retail prices of vegetables has increased by 80 per cent whereas retail prices in 10 centres has been to the extent of 30 per cent.

Releasing the study, ASSOCHAM says, it was also observed that on an average, retailers are selling vegetables at more than 48.8 per cent of wholesale prices and even in some centres, selling prices are at more than 51 per cent.

Vegetables in MumbaiThe study found that while cabbage retail and wholesale price gap has increased from 69.4% to 78.1%, brinjal 62.4% to 66.7%, cauliflower 59.0% higher than the wholesale price, chilly 56.2% to 62.6%, tomato 55.1% to 62% percent, garlic 52.4% to 54.2%, tomato hybrid 50% 58.2%, okra 49.5% to 58.7%, bitter gourd 48.6% to 50.7%, brinjal 45.9% to 56.7% peas and ginger 43.6% and 41.3% and onion increased from 35.3% percent to 48.1%.

The ASSOCHAM study further reveals that while Surat retail and wholesale price gap has increased from 49.7% to 50.8%, Lucknow 48.5% to 54.8%, Shimla 37.9% to 47.3%, Jammu 37.5% to 42.4%, Chennai 34.6% to 37.3%, Guwahati 33.7% to 37.3%, Amritsar 120.5% to 121.8%, Abohar 107.4% to 110.3%, Agra 90.2% to 93.6%, Nagpur 82.8% to 88.2%, Ahmedabad 69.4% to 96.1%, Delhi 68.9% to 83.4%, Chandigarh 68.5% to 73.9%, Dehradun 67.4%  to 63.3%, Jaipur 64.6%  to 62.7%, Mumbai 63.5% to 46.8%, Kolkata 60.8% to 69.5% Raipur 58.0% to 62.7%, Patna 57.2% to 65.4%, Ranchi 56.1% to 57.1%, Hyderabad 53.0% to 51.2%, Bangalore 51.8% to 59.2%,Kanpur 50.9% to 57.1%. 

ASSOCHAM Secretary General DS Rawat said, “The analyses are based on the wholesale price of vegetables and retail price of vegetables in the different markets in India. Wholesale price indicates the price at which retailers are buying from different markets and retail price is the price at which consumers are buying from retailers. The essential vegetables incorporated in the study are Bitter gourd, Brinjal long, Brinjal round, Cabbage, Cauliflower, Garlic, Ginger, Chilly, Okra, Onion, Peas, Potato, Tomato hybrid and Tomato local.”

On the other hand, the ASSOCHAM study has considered 33 market centers in India. The centers are Mumbai, Abohar, Agra, Ahmadabad, Amritsar, Bangalore, Baraut, Bhopal, Bhubaneshwar, Chandigarh, Chennai, Dehradun, Delhi, Gangatok, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kolkata, Lucknow, Nagpur, Nasik, Patna, Pimpalgaon, Pune, Raipur, Ranchi, Shimla, Surat and Trivendrum.

The study has observed that most of the vegetables arrival have recorded declining trend except local tomato, potato fresh and onion (noticeably onion price during 2013-14 has recorded a  life time high). 

Onion arrival grew at a rate of 13.0 per cent during 2013-14 followed by tomato local grew at a rate of 7.9 per cent and potato fresh arrival grew at a rate of 6.2 per cent. Okra and Cauliflower arrival have recoded marginal growth rate of 0.4 percent and 1.9 per cent during the same period, mentioned the study.

(Pictures courtesy www.daijiworld.com, www.chinadaily.com.cn)

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Trends

Fine dining gets dearer as rupee falls

Sliding rupee hits imports and impacts eating out at five star hotels and restaurants. Drinks and spirits become costly, too.
by The Editors | editor@themetrognome.in

It’s not just the prices of onions that are making us cry. Rising inflation and the sliding rupee are taking away the joy of shopping or even going out over the weekend. And among those rethinking their recreational habits are the people who indulge in fine dining quite regularly.

rupee slideAs per a survey conducted by trade body ASSOCHAM (Associated Chamber of Commerce and Industry of India), five star hotels and fine dining restaurants have registered a significant decline to the extent of 20 per cent in the last three months due to the falling rupee. Releasing the ASSOCHAM paper on ‘Weak rupee dampens spirits of fine dining restaurants’, DS Rawat, Secretary General, ASSOCHAM said, “Due to a fall in the rupee, five star hotels and fine dining restaurants are revising their menu card rates as the weak rupee pushes up prices of imported food ingredients and spirits.”

With negative market sentiments of an economic slowdown and weak rupee, the fine dine market segment may lose its sheen. The paper further highlights that the fine dining market registered a decline of over 20 per cent than last year in the major metropolitan cities like Mumbai, Delhi-NCR, Chennai, Hyderabad and Ahmedabad.

The paper further points out, “Due to the rupee depreciating against major foreign currencies, prices of imported products have shot up by as much as 30 to 35 per cent. Some restaurants import 85 per cent of its ingredients from Japan, France, Italy and Thailand for its signature dishes.”

Rawat added that premium hotels and restaurants use imported olives, olive oils, legumes, meats like salmon, tuna steak, porkfish sushi roll pepperoni and turkey ham, Italian and French cheeses, fine wines and spirits to tickle the taste buds of Indians. Nearly 45 to 60 per cent of the food cost of specialty restaurants, depending on their cuisine, accounts for the cost of imported food products. “The rupee devaluation has majorly impacted imports, from meats and seafood to cheese and legumes. Nearly 60 per cent of the food produces at specialty restaurants are imported and does not have local substitutes here in India. As a result, restaurants are bound to revise the prices of their menus,” adds the paper.

The current size of the Indian food industry stands at Rs 2,50,000 crore per annum and is expected to grow at 12 per cent to touch a staggering Rs 4,25,000 crore by 2018. The size of the gourmet food market in India is Rs 7,500 crore, growing at a CAGR of 20 per cent. The market is expected to cross Rs 15,000 crore by 2015. The Indian gourmet food market includes fine dining restaurants, café markets as well as food retail.

The availability of imported ingredients is another factor for growing demand for fine dining restaurants. Ingredients such as truffles, artichokes, asparagus, Australian lamb and Norwegian salmon have found their way into the Indian food and beverage space. The paper also highlights that imported spirit prices increased between 7 per cent and 12 per cent in the last three months, where bars and nightclubs have also seen a similar slump.

                                                                                                                                                           (Pictures courtesy louisekwoods.wordpress.com, www.finediningindian.com, www.theunrealtimes.com)

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Big story

Nobody’s investing in Mumbai’s mangroves

Current economic state stalls ambitious mangrove centre at Bhandup – the city’s major businesses don’t want to invest in it.
by The Editors | editor@themetrognome.in

Again and again, especially when rains lash the city and submerge large areas of land, news reports remind us of how the city’s fast-depleting mangrove cover could have partly helped save Mumbai. And then we forget about the rains and, more importantly, the mangroves. If mangroves are to be sustained and protected, citizens must learn more about them, and scholars of the subject need to come up with intensive research on the topic.

Suppose you had a place that let you wander around and look at mangroves up close, stare at animals and birds that live inside them, and sit for a lecture or two? The plans and design for such a place is ready and has the Maharashtra state government’s seal of approval. But don’t get too excited just yet – the project is stalled for a lack of funds. The Mangrove Wetland Centre was conceptualised in 2006, got all the requisite approvals and permissions till date, but given the current economic scenario in the country, nobody’s willing to fund the project.

Says Debi Goenka, conservationist and one of the trustees for CAT, “Permissions were the issue at first (for the project not moving forward), but it is not the issue any more. The problem now is money. In the present financial climate, nobody actually has the money for funding the Centre.”

He says that the estimated project cost of the Centre is Rs 140 crore, spread over five years. “The Hong Kong and Shanghai Bank (HSBC) chipped in for our field studies and the making of the master plan. But finding a single donor now for the entire project is next to impossible. We’ve approached several major businesses for funds, but nobody’s willing to invest. Besides, the project needs a 100 per cent fund commitment to start, so we can’t scout for a part of the funds and expect that the rest of the money will miraculously appear,” Debi explains.

The problem is, he adds, that hard-headed businessmen will not fund the project purely out of altruistic motives. “People are not sitting around to give money unless there are assured returns,” he says.

The project

Designed on the lines of the Mai Po Marshes Wetland Park in Hong Kong, the project was ideally suited to Mumbai because it is a living example of an island that survives on its mangrove cover. It is to come up at Bhandup, along the western coast of Thane creek. An MoU was signed with the Forests Department; the project is to come up on forest land and is to be non-commercial in nature. “We are not looking for any commercial rights on the project,” Goenka says.

Conceptualised and developed by a team of architects and experts from Singapore, the Centre will allow visitors a walk through forest areas and see various flora and fauna residing there. They can also learn about the importance of mangroves for the city’s ecology and what can be done to prevent their destruction. “The Centre will also provide employment to local communities while being a prime example of green governance,” Goenka added.

Hurdles galore

The project was initially entangled in a lot of bureaucratic red tape. “In 2007, we submitted the project proposal to the state government. The government was totally receptive to the idea, and very happy with the concept because of its tourism potential and because no such Centre exists anywhere in the country,” Debi says.

However, despite receiving verbal approval, the project got stuck in Nagpur for two years. “In 2009, we finally got the approval, and it then went to the Ministry of Environment and Forests (MoEF) for a final go-ahead,” he says, adding that now the Centre has all the permissions and approvals from all the government agencies.

(Picture courtesy www.solingcute.blogspot.com) 

Categories
Trends

Inflation hits spending. Hard.

Middle income groups slash their spending by 65 per cent to manage their monthly household budgets, and to buy necessities.
By The Diarist | thediarist@themetrognome.in

Rising inflation has dented our household budgets, and how – Associated Chamber of Commerce (ASSOCHAM) contends that the country’s middle and lower income groups have cut their spending by a whopping 65 per cent, on such heads as entertainment, vacations, electronics, real estate, automobiles, shopping, and eating out. ASSOCHAM reveals that the middle income groups, especially, are curtailing spending to be able to finance their children’s education and run their homes well, both of which are eating into their savings.

The survey was conducted over a period of two months, beginning March to April 2012 in major metros and cities like Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh, and Dehradun. A little over 200 employees were selected from each city, on an average. The report reads, “Delhi ranks first in curtailing their expenses, followed by Mumbai (at no. 2), Ahmedabad (at no. 3) Chandigarh (4), Kolkata (5), Chennai (6) and Dehradun (7), says DS Rawat, Secretary General ASSOCHAM.”

Key findings from the survey:

– Many middle income and lower income groups indicated that they are finding ways to cut back spending now or indicating they will do so in the future. Around 69 per cent of the respondents have cut down on their saving rate.

– Nearly half of the middle income group either avoid shopping altogether, or shop only for those things that are absolutely needed. Moreover, 76 per cent said that their shopping has been restricted to only necessities.

– About 88 per cent of respondents said that they have cut back on everyday expenses. They save money by avoiding outside food, car-pooling, cutting down on gas and use of electricity.

– Inflation has also impacted the urban male and females’ personal expenses.  The urban male used to spend Rs 500 to Rs 2,000 per month on drinks, cigarettes, gutkha, paan etc. which has come down by 20 per cent due to upward inflation. On the other hand, urban women now spend around Rs 500 to Rs 1000 per month on cosmetics and beauty treatments, which was earlier pegged at Rs 1,500 to Rs 2,000.

– One in four said they are going to try to increase their income to try to stay financially afloat, such as switching to a better-paid job, taking a second job option or working overtime hours.

(All figures are sourced from ASSOCHAM. Picture courtesy www.divdevarkhyani.blogspot.com)

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