Mumbai: Demand for gold jewellery has dropped as much as 80 percent with jewellery shops witnessing drastically reduced footfalls and low volumes.
A month later, footfalls continue to be lacklustre, especially, at a time when weddings are held across the country starting by the year-end till mid-February. Business has thinned down to a mere 10 to 15 percent, say jewelers.
Demonetisation has been the biggest crisis ever for the business, said Ashok Minawala, partner in the 80-year-old Mumbai-based Danabhai Jewellers and Sons. Ticket sizes have dwindled to below Rs. 2 lakh and that is the budget most weddings are also trying to adhere too with the cash crunch enveloping the entire country.
Jewellery is a high value purchase and customers are putting their decision to shop for the yellow metal on the back burner as they are focussed on taking care of the essentials items. People are focused on having cash reserves until they can access their money easily given the fact that banks and ATM are cash-strapped and are rationing money.
Unless there is a wedding in the family which necessitates spending or buying a gift for a close relative's wedding, people are reluctant to enter jewellery stores. “We do not see our regular customers coming into the stores anymore,” said Minawala. He pegs the drop-in business to almost 40-50 percent where cheques are given for gold purchases. Sales in cash purchases of gold has plunged to over 50 percent, he said.
