Diwali shopping gets costlier as prices rise across categories
What's the story
Diwali shopping has become more expensive this year, with prices of appliances rising by 3-7%, traditional sweets by 15%, and pistachios nearly doubling from last year. The price hikes are attributed to increasing raw material costs, poor harvests, and higher freight charges. Retailers expect higher sales in value terms but are unsure if the volume growth will keep pace with the rising prices.
Market expectations
Vijay Sales expects nearly 20% growth in value sales
Electronics retailer Vijay Sales expects a nearly 20% growth in value this festive season, partly due to higher prices. However, it expects unit volume growth to remain in single digits.
The company's managing director Nilesh Gupta said they're witnessing more consumers opting for EMIs (Equated Monthly Installments) as a way to manage their spending during this period.
Price increases
Consumer durable manufacturers raise prices by 3-7%
Consumer durable manufacturers such as Haier, LG, and Blue Star have raised prices by nearly 3-7% across categories like air conditioners and televisions. The price hikes are due to rising input and component costs.
Havells India also plans to increase prices by 5-7% during the December quarter to offset raw material inflation.
Changing trends
Retailers note consumers are more focused on product features
Retailers have noted a change in consumer behavior, with people paying more attention to product features and prices before making purchases.
Ravi Agarwal, founder and managing director of Cellecor Gadgets, said this year the industry is facing challenges across both small and large appliances.
He added that consumers are doing more research before buying new products and want real value for their money.
Rising costs
Traditional mithai has become more expensive
Traditional mithai has also become more expensive due to rising costs of milk, khoya, sugar, nuts, and packaging.
A Delhi-based sweet shop said they have raised prices by nearly 15% ahead of Diwali.
Anjali Jain from Tyohaar Sweets in Jaipur said her business had to raise prices by 10-12% this year as the entire supply chain has seen a price rise.
Price hike
Festive gifting staple dry fruits have seen steep price increase
Dry fruits, a festive gifting staple, have seen a steep price increase due to poor harvests in major producing countries.
Gunjan Jain, president of the Nuts and Dry Fruits Council (India), said almond prices have risen nearly 35% since last Diwali while pistachio prices have nearly doubled during this period.
According to council data, almonds now retail at ₹1,000-1,200/kg compared to ₹800-900 last Diwali while pistachios cost between ₹1,500-2,100/kg up from ₹900/kg.