Goods and Services Tax (GST) has become the major factor that dampened the Onam sales in Kerala, considered as the harbinger of the festive season in the country that extends till Diwali.
The impact has been not so much due to tax rates, which are almost the same as the pre-GST level in most of the home appliances, but the consumers seem to be restrained in their spending, having exhausted their resources by June.
“The sales haven’t taken off yet and so far we haven’t seen the usual Onam rush. The consumers may have bought what they needed before July fearing an increase in the prices,” said Ajmal Abdul Hameed, MD of Bismi Group, which runs one of the largest retail home appliances chains in the state.
The consumer durables market in Kerala is calculated to be in the range of Rs 2000 to 3000 crore a year. Of this, about 50 to 60% of the sales happen during Onam festival extending to about two months. All the big branded players in the country make a strong pitch in the state with new launches and freebies to attract consumers.
“The sales are flat in the case of ACs and fridges. The Early arrival of Onam and a cooler weather may have had an impact on the sales. TVs and washing machine sales are just ok,” said Jerry Mathew, partner of White Mart retail chain.
Gold jewellery sale is also witnessing a lacklustre trend. The season being auspicious for Hindu weddings, bulk purchases abound during Onam. ” Such bulk purchases for weddings have been absent during this Onam. The rush of individuals coming to buy gold is there,” said B Girirajan, MD of Bhima Jewellers, Kozhikode.
The rise in the price of gold has not affected the sales much. ” All the wedding purchases seem to have got over by June before GST came into being. Such buying accounts for nearly 50% of the total sales during wedding season time,” Girirajan pointed out.
Comparatively, apparels are doing better since people tend to buy new clothes during Onam. ” The sales are just normal. We don’t see a jump,” said Pratap B Shah, owner of Shah & Co.
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