The demonetisation of high-value currency notes has triggered a contradictory trend in Madhya Pradesh as far as prices of grains and food items are concerned --- with many retailers, mostly restaurants and grocery shops, raising prices by 10% to 20% citing losses whereas wholesalers claiming to have reduced the prices accusing retailers of profiting.
Retailers hiked prices despite the risk involved in it as it may have a domino effect on their business. But they say they have no option left but to do so due to fall in their business and dip in sales. They say they did it to compensate the losses due to decreased footfalls.
“We have incurred substantial losses due to demonetization. The target customers for restaurant owners are students and youngsters but after demonetisation, they are spending only on basic necessary products. Even facilities of Paytym and point of sale machines are not giving us any advantage,” said F Cube restaurant owner Siddharth Pali, adding now we are trying to compensate losses by increasing prices of products.
Restaurant owners who bring food items and beverages from other states are feeling the pinch of demonetisation as it has put a negative impact on transportation cost of products and logistics.
Indian Tea House owner Mohammad Faisal Khan said, “We had double setbacks due to demonetization --- on the one hand the supply cost of products doubled and on the other the footfall decreased substantially. We are left with no other option but to revise prices of products. We increased prices not to earn profit but to make up for our losses.”
Wholesalers, however, disagree with their (retailers) argument and allege they are making profits by raising prices.
“Initially the prices did increase but now the rate of wheat flour and other food grains has decreased to a large extent. Grocery shop and restaurant owners are taking undue advantage of the situation to make profit,” Vivek Sahu, a wholesaler, said.
Echoing similar views, another wholesaler Anupam Agarwal said retailers have increased the prices just to make profits.