Soaring prices of raw materials would compel retailers to sell their products at high rates .jpg) The market is gradually recovering from the losses incurred due to recessionary pressures. However, retailers are yet to stabilise and record high profits this year.According to the Associated Chamber of Commerce and Industry of India (ASSOCHAM), consumer goods prices are expected to surge in the coming 6 months. Based on a survey conducted across India, above 80% of business leaders expressed that prices of certain products are expected to surge in the coming months. These products include consumer durables, intermediate goods and consumer non-durables, among others.
It has been noted that companies manufacturing consumer durables had purchased raw materials at a time when prices of the same were soaring in the domestic market. In this context Koteshwar Prasad Dobhal, director - Public Relations - ASSOCHAM, says, “Owing to high input costs, prices of consumer durables are likely to surge. As a result, retailers would have no other alternative but to pass the brunt on to consumers.”
Some retail companies have been offering discounts, ‘buy one get one free’ schemes and such other promotional offers to attract the consumers. On other hand, another set of retailers are not providing such offers as they are averse to compromising with the quality of products. According to Dinesh Rai, proprietor of Shivam Enterprise, a small-sized consumer durable company in Jaipur, who belongs to the latter category, “By selling low-quality products, retailers are likely to lose their esteemed consumers, which would further affect domestic retailers’ sales.”
MSMEs’ reaction on price hike
Through the survey it has been noted that micro small and mid-sized enterprises are willing to hike prices of their products nominally for a short period as they are already facing the brunt of delayed payments and non-availability of credit at low interest rates. Moreover, MSMEs are sceptical of recording further losses if consumers are unwilling to purchase high-priced products manufactured by them.
Sabrina Mitchell |
