The great consumer comeback has recovery in sight

Customers scrambled at more than 260 countrywide outlets of Bata in September this year for formal shoes, school shoes and casual footwear as movement curbs were lifted, leading to a reopening of businesses, offices, schools and tourist spots.

After one and a half years of Covid-induced pressure on businesses, the supercharged demand for footwear led Bata's sales to an even better position than in pre-pandemic times.

"People are now coming out of their homes, and they need shoes to wear," Iftekhar Mallick, head of marketing at Bata, told The Business Standard, noting the company's Sep-Oct sales were "very good".

Like the top shoemaker, manufacturing sectors ranging from food to fashion to construction have witnessed a 10%-15% growth in the last two months thanks to a surge in consumer spending – hinting at a strong economic recovery from the Covid fallout.

Apart from the shopping spree, other gauges such as money movement, fall in bank deposits and revenue collection also suggest people have loosened their purse strings. Economists attribute falling infections, festivals and occasions in winter, spiked inflation, discount offers, peak tour season and release of pent-up demands are some of the reasons for the edging up of consumer spending.       

"People have started to move while social events have resumed. Customers are now sprinting for the pent-up shopping. These are causing the business growth," Dr Selim Raihan, an economics professor at Dhaka University and executive director at South Asian Network on Economic Modeling (Sanem), told TBS.

Traders agreed with the assessment by the academic. Bangladesh Fashion Designers Association President Shahin Ahmed said many manufacturers are offering discounts to lure customers, which also contributes to the surge in consumer spending.  

Fashion, footwear and furniture sales better than ever

Shoppers are flocking to clothing stores, jewellery shops and furniture showrooms, driving sales growth higher than in the previous two years.

Several fashion brands, such as Deshi Dosh, Westin, Artisan, Cat's Eye and Aarong, have said they are getting more customers than in pre-pandemic times.

Westin's Bashundhara Shopping Mall branch said people are buying more since the brand is clearing its piled-up products at discounted rates.

Like clothing and fashions, furniture sales are witnessing growth as few people, unlike in Covid peak times, are leaving the capital or moving to smaller flats as part of austerity measures.    

"Home furniture sales returned to normal in August this year after almost a year and a half. Sales of office furniture have also increased," said Selim H Rahman, president of Bangladesh Furniture Industries Owners Association.

Noting that sales are even better than in pre-Covid times, he, however, expressed concern over raw material price hikes in the international market and spiralling transportation costs.  

Consumer items see more than 15% sales growth

Even with the virus curbs in place, sales of consumer items were open. But sales then slowed down as social events were suspended and people faced a decline in income too.

Now with the reopening of schools and colleges, hotels, resorts and tourist centres, the sector has regained the momentum.

Sales of fast-moving consumer goods and consumer items such as salt, sugar processed foods, prepared meals, beverages, baked goods, fresh and frozen foods, dried goods, medicines, cleaning products, cosmetics and toiletries and office stationery witnessed more than 15% growth in the last two months compared to pre-pandemic times.

"Our sales have increased since August. But business costs have had an uptick by 20%-25% too. The actual growth could be lower if the cost is adjusted," Biswajit Saha, director of Meghna Group, told TBS.

Kamruzzaman Kamal, director (marketing) at Pran-RFL Group, said there has been a 12%-15% sales growth in the last two months.

Rafikul Islam, a trader in Karwanbazar wholesale market, said current sales are like those in pre-pandemic times.

Footpath vendors get ever more customers   

Aminul used to sell different types of clothing in front of the SME Foundation building in Dhaka. Before the pandemic, his daily sales amounted to Tk1,500-2,000. He said his income during the pandemic was too paltry to support his family.  

Aminul says he got back his old sales momentum in the last three months. Manjur Ahmed, a footpath shoe vendor in Dhaka's Motijheel, expressed similar views.  

Sadik Hossain, a trader at Gausia market, said more people are opting for the low-end clothing and footwear on footpaths after facing an income crunch.

He said his sales have been "much better" in the last two months as more and more customers have been turning up for winter clothes.

Few customers for motorcycles, mobile phones and electronics

According to a top motorbike brand, their motorcycle sales fell at least by 8% in October this year. The company said sales of its market peers have also dropped 8%-10% during the period.

"Almost all automobile brands had increased prices two months ago due to the rise in raw material prices in the global market. Buyers are holding back on car and motorcycle purchases due to inflationary pressure. Besides, the supply of automotive parts from abroad has also decreased," said Md Ashraf Uddin Dewan, chief marketing officer of TVS Auto Ltd.

Sales of home appliances and mobile phones have declined more than motorcycles.

Mesbah Uddin, head of marketing at Fair Electronics that manufactures and distributes Samsung products in Bangladesh, said sales had fallen by at least 10% in the past two months.

He said people relied on the devices since they had to attend offices and classes from home during the lockdowns – leading to a sales boom by e-commerce platforms.    

"Sales of all electronic products, including mobile phones and ACs, have declined as things have started to normalise," he noted.

Construction sector not doing well

With a more than 10% sales growth from the beginning of this year, cement logged a 25% sales growth in August. But the growth started to fizzle out in September, said people associated with the sector.      

Masud Khan, CEO of Crown Cement Group, said, "In September, cement sales growth was 6%, which is less compared to previous months. The growth is still going down."

Like cement, sales growth of other construction materials is declining. Apartment sales growth is also edging down.

Alamgir Shamsul Alamin, president of Real Estate and Housing Association of Bangladesh (Rehab), said prices of construction raw materials have been spiralling in the last six months. Realtors are not getting customers for high-end apartments while people are not interested in buying new homes thanks to the costlier rates.