BUSINESS WASHED OUT DUE TO INCESSANT RAIN

BUSINESS has been washed out, it seems. Retail stores in the Kathmandu valley have reported a drop in sales with the monsoon in full swing. Major retail chains in the capital city have said that their sales have gone down 15-20 percent due to the heavy rains. They said that people don’t go out shopping because of the wet weather and flooded streets, which has led to a slump in business. “We have witnessed a sharp decline in sales since the past few weeks,” said Sachin Shrestha, marketing manager at UFO, a well known apparel chain in the country. “People are reluctant to step out of their homes during rainy days. Only those having an immediate necessity are coming to us.” Another prominent store, Peanuts situated on New Road, too has seen a steep fall in apparel sales. “It is normal for business to slow down during the monsoon season. However, the impact has been quite high this year,” said Surendra Tuladhar, proprietor of Peanuts. “Compared to the same period last year, our business has gone down around 20 percent.” Apart from the pouring rain, a stronger US dollar has made imported goods more expensive, turning off potential buyers and causing sales to drop. Traders said that apparel prices had increased hitting the affordability factor of the general people. Prices in the domestic market have swelled 10-20 percent as the country imports most of its clothing products from China, Hong Kong, Korea and Thailand where payment has to be made in US dollars. The Nepali rupee has been on a constant slide these past few weeks with Nepal Rastra Bank setting the exchange rate at Rs 95.50 per US dollar on Thursday. The rupee plunged to a record low last fortnight hitting Rs 97.69 per US dollar. “The strengthening of the US dollar has taken its toll on branded apparels. With prices going up by almost 20 percent, imported products have become unaffordable for the general people,” said Shrestha. The impact of a rising greenback has also become visible on non-branded products. Tuladhar added that the heavy dependency on third country imports had compelled traders to jack up prices. Merchants have predicted that garment prices will shoot up during the Dashain festival in October when people usually go on a buying spree. According to Tuladhar, traders normally place orders for clothes two months prior to the festive season, and since the exchange rate of the dollar dœsn’t seem like easing any time soon, prices for imported products are going to be at the higher levels. Meanwhile, traders are hopeful that the retail market will rebound soon after the end of the rainy season. The end of the rains also means the start of the festive season when demand for apparels jumps several-fold. Similarly, a timely announcement of the budget for the fiscal year 2013-14 has encouraged traders. “Since the budget has been announced on schedule this year, the cash flow in the market is likely to be smooth,” said Tuladhar. He added that they were expecting the market to perk up as the salaries of government employees have been increased. Traders said that the retail clothing business primarily depends on the people’s disposable income, and that the increment in the salary of government employees would bring positive vibes into the business.