Sitting outside his small but tidy shop at Irinjalakkuda, Thrissur, Abraham heaves a long sigh. Basically, Abraham’s shop is a bakery but it holds all kinds of Christmas items — from cakes to greeting cards and Christmas stars — but the only factor missing right now is rush of customers. “I have been in this business for 14 years. This is the first time I am seeing such a lean season. People simply aren’t coming,” he says.
The basis of Abraham’s despair is the cash crunch his customers are facing since note ban which has now affected Christmas-New Year business after hitting like real estate and construction. According to sources in the association of the State’s bakers, the State’s Christmas-New Year cake market, which used to be worth Rs 50 crore, is unlikely to realize even 60 percent of that in this season.
The Christmas-New Year season accounts for nearly 75 per cent of the annual sale of cake in Kerala, which has about 20,000 bakeries. “But I am sure that the sector is not going to meet that target this season. I will be happy if this season brings 60 per cent of the normal sales,” said Ansar Abdullah, a bakery owner in Kozhikode.
Speaking about the how demonetisation has impacted the sales in the sector of bakery, including cakes and other items, Ansar says that the sales had fallen to ten per cent in the week after demonetisation. “Between December 1 and 15, it grew to about 25 percent and now it stands roughly at 40 percent. When the season peaks by December, 22, it may go up to 55 or 60 percent but not beyond that,” he says.
Sources in the bakers’ association said that business at the leading bakeries in cities like Kochi and Thiruvananthapuram and big towns might survive the cash crunch as customers with the habit of using debit cards were easing the pressure to a large extent but the bakeries in rural areas were certain to be hit by the negative effects of demonetisation.
Parameswaran Nair, a bakery owner in a Thrissur suburb said that sales in the third week of December usually gave a picture of the mood of the Christmas market. “I must say the mood is dull. I used to sell a minimum of 250 kilos of plum cake in the third week of December. But I haven’t sold even 75 kilos after December 15. POS machine would have been a relief but I am yet to get it,” he said.
Cake sale is not the only area of Christmas-New Year market that has been hit by the cash crunch brought about by currency demonetization but it has affected the sale of Christmas stars, cribs, greeting cards and even garments, say traders. The cash crunch is also likely to affect the New Year festivities in places like Fort Kochi, they say.
According to traders, card payment for items like Christmas stars and cribs is very rare as the volume of payment is normally small. “The stars I sell here are priced at between Rs 75 and Rs 400 and the cribs cost between Rs 300 and Rs 600. People somehow don’t like to use their cards for paying such small amounts,” said lonappan, a trader in Kochi.
Meanwhile, a cement merchant in Iritti in Kannur district on Monday became the second person to commit suicide in the State after demonetization allegedly due to losses caused by the cash crunch. The body of Babu (42) of Vilakkode was found hanging from the ceiling of his shop on Monday. A 59-year-old bread wholesaler in Changanassery, Kottayam had committed suicide in his shop on November 28 in similar circumstances.