Who cares for consumers?
Even they could hardly lay their hands on essential commodities to keep their domestic flames alight.Hippox [Creative Commons]

Who cares for consumers?

Consumer Rights Day should have been themed around the war against arbitrary and illogical price rise, instead of ‘tackling plastic pollution’

Covid-19 pandemic, among other things, has brought consumers to the center stage. For almost two years, the pandemic forced the consumers to be in a dormant stage as pandemic-induced lockdowns caused never-seen-before disruptions in the economic supply chain.

Even they could hardly lay their hands on essential commodities to keep their domestic flames alight. Starvation loomed large as millions of households lost their income stream. Despite all odds, consumers remain pillars of economic recovery after being badly hit by the pandemic.

Actually, it’s the consumer behavior which is pivotal to the demand and supply in an economic cycle. With the ease in economic activities, the demand and supply is picking up as consumers are venturing out, though cautiously in the wake of the Omicron variant threatening onset of third Covid wave, to shop beyond essentials. However, this time the consumer behavior is not what we used to come across in pre-Covid times. If consumer surveys measuring pandemic impact are taken into account, we find the traditional economic wheel re-oiled and at the same time re-aligned to the new virus-induced normal.

Today, we find a drastic change in spending and shopping patterns of the consumers. Even as the virus has proved as a termite on household budgets, consumer behavior signals that they have an intent to spend. With economic recovery taking place in stages and opening cautiously amid the threat of third Covid wave, the consumers are showing signs of behavior in line with the new shopping trends rolled out by the pandemic.

The market scenario reveals that people are spending more on household goods, groceries, medicines and other essentials on a priority basis. The consumer spending on discretionary items, such as clothes, footwear, electronics, etc. is also showing improvement as people could be seen queuing up in stores to make purchases. To be precise, we can see people now working out plans to go for purchasing discretionary and non-discretionary items. And amid this surge in spending intent, many consumer surveys have uniformity in highlighting the shift of consumers to online platforms. However, offline channels of making purchases too are being accessed by the consumers.

The most visible change in the consumer market landscape is the use of e-commerce and other digital platforms. A vast percentage of consumers, particularly the millennial segment are click-happy to make online purchases. The online shopping trend is catching up fast among the consumers not because it’s convenient to make purchases while sitting at home, but because the discounts and other offers lure them to board the online shopping platforms. However, consumer behavior varies among different consumer segments.

So, the current scenario can be summed up that consumers are venturing out of their homes to go for discretionary as well as non-discretionary purchases through a mix of online and off-line channels. All said and done, the main issue is the cost of making purchases. Are the consumers comfortable with the current pricing of items, be it essentials or non-essentials? I don’t think it needs a brainstorming session to arrive at an answer to this question. The unprecedented huge price rise of essential commodities and even non-discretionary items is one of the major onslaughts of the pandemic which is proving more deadly than the virus itself. Prices of day to day items such as tea, coffee, biscuits, toothpaste, electric components, etc. have witnessed more than 10 per cent increase and it continues almost every month.

Here the mathematics is simple, the manufacturers passing on the burden of rise in production costs like energy cost and raw materials to the consumers. The rising prices have been hurting consumer sentiment. The manufacturers, even big corporates, have been listing their own reasons such as burden of taxes, etc. to revise the prices of their commodities upwards, but the rising prices are going to prove a major hurdle in the growth of economic recovery.

Precisely, it’s the inflation which is now emerging more deadly than the coronavirus. The skyrocketing prices of essential commodities is contrary to the given situation where wage deflation and increasing joblessness have pushed (and continue to push) households into a distress situation. In fact, those essentially known as staple food items (potatoes & onions) of economically poor sections are fast getting out of reach of the kitchen budget of these households. Notably, potatoes have witnessed the steepest rise of over 100%, followed by onions at around 50%. A comparative analysis of data by the consumer affairs ministry shows that in average wholesale prices, potato prices have gone up by 108% and onions witnessed an increase of 47% in the past one year.

It’s also worth noticing that household savings have been witnessing a dip during the Covid crisis. Even the falling incomes too have been making the households struggle to keep themselves afloat.

Take the case of rising fuel prices. The steady rise in petrol and diesel prices over the past few months has not only fueled inflation concerns, but has also triggered changed spending patterns in households. A report reveals that the fuel is eating the domestic budgets more than the expenses on health. In fact spending on other non-discretionary items, like grocery and utility services has observed a dip to such an extent that the demand for such products has significantly declined.

Now let’s have a look at the exploitation of the inflation fears at our own place, to be precise in J&K markets. Here the price control mechanism has been thrown to the winds as traders and merchants stamp their own prices on the commodities to rob the consumers of their hard earned money. It’s more ironic that none of us, as consumers, is vocal to resist the skyrocketing prices of essential commodities, be it grocery items, food grains or vegetables.

Let me explain. The rise and fall in prices has a lasting effect on the cost of living of the common man. Cost of living is the price of goods and services required for maintaining an average level standard of living and varies from place to place, and fluctuates from time to time. It has a direct bearing on the prosperity of an individual.

When the cost of living goes up, the social structure of a common man too takes a hit, exposing him more to complexes. As far as essential commodities are concerned, we have two categories. One is the traditional category of essentials and the second constitutes modern living essentials. The immediate impact of price rise is that it limits the access of common man only to necessities. Modern living essentials have become a luxury for him. While negotiating the situation, a common household engages more and more members of a family.

Normally, the price rise is attributed to the factors like rapid growth of population, increase in incomes, rising non-development expenditure of the government and increase in money supply, on the demand side. And on the supply side inadequacy of agricultural output, inadequacy of industrial output and high-priced imports are listed in the price hike. But ours is a place where the hike in prices is not based on economics. It’s the writ of the supplier which runs, pricing the commodities arbitrarily. We as consumers are left with no option but to pay the illogical prices of the essentials.

Let me conclude that the Consumer Rights Day observed in India on December 24 should have been themed around the war against arbitrary and illogical price rise, instead of theming it ‘tackling plastic pollution’. At the moment pollution lies acutely in pricing of essential commodities and non-discretionary items. The question remains – who will rescue consumers from the exploitation of traders and merchants who unlawfully hook inflation fears in pricing the essential commodities?

Disclaimer: The views and opinions expressed in this article are the personal opinions of the author & not the Institution he works for.

The facts, analysis, assumptions and perspective appearing in the article do not reflect the views of GK.

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