Are urban Indians immune to inflation?

June 20, 2008

The scene at the local malls last Sunday was a bit overwhelming, if not surprising! This is neither a sale season (one of those dozen ones they have round the year like dad’s birthday sale to clean-the-stale-products-off-our-shelves sale) nor is it any festival time to attract such large numbers at every mall in the city. Long queues at the checkout counters that I’ve rarely witnessed before and we were indeed lucky to get parking space, I failed to understand what the excitement was about. With the summer vacations over and the school sessions on, only two possible explanations for this sudden splurge occurred at me - either everyone found a treasure / big fat paycheck or there was some hidden clue to shop more/pay less that I failed to discover. The streets which otherwise wear a deserted look on Sunday evenings was exceptionally busy with every restaurant in the area doing great business. I once read somewhere you can judge how a economy is doing by the number of restaurants that open in your neighborhood. The economist who said this might be in for a disappointment.

Come Friday and the inflation numbers are out. It requires no knowledge of economics to predict which way the numbers are headed. But today’s beat everyone’s predictions. I thought after inching fine decimals like a tortoise for weeks, it might finally breach the important 9 mark. How wrong! It is in double digits at 11% and I would be damned if the FM cites crude as the sole reason and believes the economy is healthy and sticks to his favorite “the underlying fundamentals are strong”. I can’t quite remember when I felt euphoric last. With investments in the red and dabbling in stocks not a sensible option for a novice trader like me anymore, it might only be wise to look for a stable source of income before the economy goes completely bust/corporates stop hiring.

That was off topic. Back to inflation and the retail shoppers, what I saw last weekend was not a one-off case. The numbers at the supermarkets and malls are definitely not coming down. So has not the numbers eating-out. The effect of inflation is beginning to reflect in our daily lives through the commodities we purchase - more glaringly for us consumers! I don’t know how it is in semi-urban and rural parts of the country, but on the face of it the rising prices is not a deterrent atleast among the youth population. Even today, the TGIF crowds hits the multiplexes straight from work for a quick munch at McDonalds followed by the first day evening screening of a new movie. For now, the protests are confined to the CPM (as Jug Suraiya calls it ‘Completely Paralyse Movement’) ruling states.

In another interesting observation, I noticed a “My dollar store” where every item is sold for Rs.99. I’m not sure if most malls have it and if they go by a different name. True to the name and price, it was hard to find a single Indian product/brand. Del Monte ketchup may not be a household name in India as Maggi or Kissan is but it is certainly not new to the well-travelled urban Indian. For some, products such as Imperial Leathermay be unheard of but these which are well known and well placed in the Gulf market are slowly making their way into the Indian shop shelves at the same price, if not less. That gives more reason for your Gulf/US residing cousins a ‘present’ problem - what to get as gifts for their Indian relatives. For the uninitiated, it was a common practice to get soaps, perfumes, cheese and other such everyday items as gifts for relatives - this was the pre-’92 era.

It’s a wait and watch game to see how far this “crude” story goes and it starts affecting our consumption - before the middle class starts returning to its dal-chawal days (god forbid not) giving up on the luxuries of Pizza!

Photo credit: http://www.delmonte.com/Products/TomatoItem.asp?id=136

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2 Responses to “Are urban Indians immune to inflation?”

Pradeep on June 21st, 2008 11:57 am

I think most of them are just hanging out there. I didn’t find the shops crowded..

Me: The hanging out part is mostly restricted to the college going crowd who are not out there for grocery shopping or general splurging. But they just form a section of the crowd. Even hanging out means a cup of coffee in the least. It’s hard to come by today’s youth who don’t spend on eating out.
Nita on June 21st, 2008 5:15 pm

I too notice that crowds haven’t come down, but then people buy at malls because malls are fairly cheap. You get bargains. But on the other hand, it’s the poor who are feeling the pinch. Not us. For those who barely make ends meet, they are the ones who have to do without.

Me : True, to an extent. And I don’t think this will spare the lower middle class too. They will have the essentials no doubt but will be forced to cut down on the extras. More than the older generation, it will be the younger generation in this strata that were used to consumerism and didn’t rely too much on budgeting and saving who will start feeling the heat.

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