The countdown to Dashain has begun but the shopping frenzy has not materialisedPeople are staying home due to virus fears, and they have less spending money because of the lockdown, traders said.
The countdown to Dashain, Nepal’s biggest festival when people go on a buying spree, has begun; but traders aren't much hopeful about this year's business as the virus has dampened the holiday spirit.
Outlets ranging from retailers to supermarkets in the Kathmandu Valley, which are planning to introduce offers and schemes, have reported poor footfall.
On Thursday, the World Bank said that Nepal’s economy was experiencing severe distress; and since there is uncertainty around the coronavirus and there is lack of a solid plan for recovery, more pain is likely ahead.
Nepal’s economy came to a standstill mainly due to the lockdown in the last fiscal year that ended mid-July, registering a negligible growth of 0.2 percent. Businesses have reopened now, but the outlook is bleak for the current fiscal year too. The economy is projected to grow by just 0.6 percent.
According to the World Bank’s latest South Asia Economic Focus, the impact on livelihoods will be larger than what the GDP forecast suggests. “Unlike earlier recessions in which investment and exports led the downturn, consumption, traditionally the most stable component of demand, has been repressed.”
Shopping mall operators say sales have not been going well in the past few months due to the lockdown and restrictions, and they plan to introduce discount offers from the first day of Dashain to pull in customers.
In previous years, department stores in the valley used to issue discount offers, especially on grocery items, a month before Dashain. Festival shoppers used to throng department stores because of the large selection of products and discount schemes.
Customers often found the prices at the department stores to be cheaper than at the government fair price shops, but this year they do not plan to launch discount schemes during the festival like in past years.
Prices of rice, lentils, legumes and edible oil have risen by 10 percent ahead of Dashain, according to the Nepal Retailers Association. Customers used to put off their Dashain shopping until the department stores and shopping malls had launched their festive offers and gift schemes. But this year there are few such discount schemes as the pandemic has hit business.
Sales at supermarkets have plunged by 40 percent compared to last year’s Dashain, traders said. And this year, because of pandemic fears, offers and discounts will not have much effect on making people go out and buy things.
“We are offering discounts as a formality only to satisfy customer expectations of Dashain offers,” said Chet Narayan Poudel, chief operating officer at SalesBerry.
Supermarkets in the valley used to provide heavy festival discounts, but they have no such plans this year.
Panu Poudel, chief operating officer at Bhat Bhateni Supermarket, said they were planning to introduce discounts from Ghatasthapana on October 17 this year.
“It has not been more than a month since travel restrictions were lifted in the valley, and we have been managing logistics and staff due to which we could not prepare for Dashain offers early,” said Poudel.
Due to a rising Covid-19 caseload in the valley, there is no festive excitement in the market as in previous years; and sales have not increased as much as they used to during Dashain, he said. Business performance has not been good with the lockdown and restrictions, he added.
“We will be offering discounts that are 1-2 percent lower than at the government-run fair shops this year on food items like rice, lentils, legumes, edible oil, tea, flour, and beaten rice, among others,” he said.
Poudel said that people had not started buying goods for Dashain like they used to do in previous years, and he expects people to start their shopping in earnest from the first day of the festival. He is hopeful business will grow with the start of Dashain.
Bibek Dev, finance head at Big Mart, said they were not planning to launch any bumper sales and discounts like in previous years. “People fear to leave their homes and visit the market to buy goods. It is not like a festive market in the past,” he said.
“We hope there will be normal monthly sales and do not expect extra festive sales,” he said. Big Mart plans to spend around Rs35 million on offers during this year’s Dashain, said Bibek Dev. He said that due to the pandemic, discount schemes and free offers would not make a huge impact on sales trends.
Poudel of SalesBerry said that the market was slow, and operators were in a dilemma whether or not to introduce discounts like in previous years due to the virus situation getting worse in the Kathmandu Valley.
“By this time, people would start doing their Dashain shopping with thousands leaving the valley to go to their home towns after the schools and colleges closed for the holidays,” he said.
"This year, sales will not be as expected compared to last year as many people have already left the valley," Poudel added. People's shopping habits have also changed this year as their incomes have been hit by Covid-19, and their purchasing capacity has decreased.
Customer flow has declined by 20 percent compared to last year's Dashain, said Poudel.