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City battles price highs and household lows

Retail too witnesses steep rise in prices in the past one year as families fight hard to maintain quality of life, reports Avishek G Dastidar.

delhi Updated: Mar 21, 2008 01:55 IST
Avishek G Dastidar

The wholesale price-based inflation rate may have reached a 10-month high, according to government data released on Thursday, but the spike in retail prices has been bigger. Any average Delhiite, who is feeling the pinch with every passing day, will vouch for it.

Forced to face the challenge of managing expenses, consumers are either cutting down on quantity or compromising on quality. Or both.

“The usual budget simply does not suffice anymore,” said Jharna Ghosh, a homemaker at Sarojini Nagar.

At Kendriya Bhandar outlets, where items are at sold at discount rates, standard rice, which was for Rs 18 a kg a year ago, is now almost 30 per cent costlier. Wheat flour, for Rs 125 for 10 kilos a year ago, is now for available for Rs 135.

The worst hit is, perhaps, cooking oil. A litre of branded vegetable oil, which was available for Rs 61 in March 2007, now comes for a whopping Rs 81 — almost 40 per cent more. Mustard oil has seen a jump from Rs 60-65 to more than Rs 80.

Ghee, which cost Rs 52 a litre this time last year, now costs an extra Rs 20.

And there is hardly any scope for a switchover because alternatives like soya oil have also become expensive. “Due to a shortage of soya beans, the oil has become 20 per cent costlier in one month,” said Suraj, a grocery trader at R.K. Puram’s Indira Market.

Soaps, toothpastes, washing powders, pulses and sugar... it’s the same story on every shelf. “Many things can be cut down but how can we do without our preferred rice and cooking medium like oil?” said Ghosh.

“The rise may not be that apparent at our outlets. The real rise can be seen at general retail points,” said R.K. Sharma, spokesperson of Kendriya Bhandar.

Subhiksha chain of stores said even discount stores could not escape the rise. In retail, the margin of profit is thin, so it is becoming difficult to compensate the customer, said a Subhiksha spokesperson.

Since monthly income in most households remains pretty much where they were a year ago, the pinch is felt.

“While the A-category households with monthly income upwards of Rs 25,000-30,000 has not been affected much, the larger population of B and C category buyers with incomes between Rs 10,000 and 20,000 are hit the most,” he said.

While standalone grocery stores have been cutting their margin thin and often selling items for prices lower than the printed price, chains like Subhiksha have been also depending on “bundle offers”.

“If, for instance, a kilogram of rice gets you two packs of mosquito repellents free, then in the market of inflation, the customer is happy. That is a way we are insulating the extra expenditure people have to bear,” said the Subhiksha spokesman.