Retailers not carving up the price relief with customers

Retailers not carving up the price relief with customers

Despite of fall in the prices of pulses and sugar in the local whole sale market (Dandia Bazaar) in Karachi, the retailers are not willing to pass on the relief to the consumers.

A persistent decline in the sugar prices has been observed in the sugar prices for the past 10 to 15 days, pegged at Rs. 53 per kg, but the retailers are still charging Rs. 58-60 per kg from the customers. Only a month ago, the
customers had to buy sugar at Rs. 80 per kg, when the whole sale rate was Rs. 75 per kg.

With a persistent decline in the prices of pulses in the world market, prices in Karachi’s domestic wholesale markets also fell significantly in the past few weeks. There is a wide difference of Rs20-40 per kg between retail and
wholesale rates in pulses which is not justified in view of the distance between Dandia Bazaar and city’s various grocery markets. It clearly seems as if the retailers are not willing to carve up the price relief with people and desire to generate as much
profit as they can by over charging the prices. Increase in diesel prices might have raised the transportation costs coupled with labour charges in the country but retailers are keeping far larger margins while selling the particular items.

Most of the retailers have in mind that a majority of customers remain unaware of the wholesale prices and readily pay the demanded prices. Karachi Wholesalers Grocers Association (KWGA) Chairman Anis Majeed said: “the wholesale
rate of good quality ‘masoor’ pulse had dropped to Rs55 per kg following its price tumbled to $550 from $700 per ton in the last one month in Canada and Australia.”

The retailers have claimed that the wholesale rate for ‘masoor’ pulse is Rs. 65 and not Rs. 55 per kg and that why they are adamant on charging Rs. 73-80 per kg from the consumers. The unawareness of general public about the wholesale
prices is letting the retailers taking the most out of the decline in prices.

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Posted by Farhan Hameed on Dec 7 2011. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry