Skyrocketing gold prices hit sales in Bengaluru ahead of Akshaya Tritiya

Gold retailers have extended numerous offers and discounts to mitigate the increased gold rates.
| Photo Credit: FILE PHOTO

Sudha Eeshwar, a school teacher, won’t be buying gold for Akshaya Tritiya, which falls on April 30, this year. “I will probably buy it later when the prices drop.”

As the price of gold hits new highs, many like Ms. Eeshwar are choosing to skip buying the yellow metal at this time of the year, when it is considered auspicious to buy gold. Jewellers, on the other hand, are leaving no stone unturned to attract customers despite the skyrocketing gold prices.

Gold retailers have extended numerous offers and discounts to mitigate the increased gold rates. “Akshaya Tritiya is an auspicious day. People buy gold to welcome Goddess Lakshmi into their house and for prosperity. So retail stores have done a lot of preparation in anticipation of the high gold rates,” said Chetan Kumar Mehta, president of the IBJA and president of the Jewellers’ Association of Bengaluru (JAB).

Discounts and gifts

Abaran, a jewellery house, has offered a ₹500 discount on every gram of gold purchased. “It’s a small contribution from our side on the occasion for the customers. ₹500 is a big amount- if you add it up for 200 gms of gold, it will make a big difference,” said Sudhindra, manager of the M.G. Road branch.

“Because of the USA-China trade wars, gold prices have gone up even more. Nowadays, gold is the best investment to make. More than the automobile industry or the stock market, gold is more profitable. Hence, everyone wants to invest,” explained T. A. Sharavana, president of the Karnataka Jewellers Association and MD of Shree Sai Gold Palace. “For Akshaya Tritiya, we are trying to give offers to customers because of the high gold rates. If a purchase of ₹50,000 of gold is made, customers will get a silver idol free. The idol has been blessed at the Ram temple in Ayodhya,” he added.

Despite these incentives, customers are still apprehensive. “Have you seen the rates? They are so high! It costs 1 lakh for 10 gms. I am not buying this year,” revealed Kamakshi Bansal, a homemaker.

Preference for lightweight jewellery

Retailers also expressed awareness of the shift in purchasing patterns. “Sales value or sales turnover has increased, but sales volume has stayed the same. This is because customers’ budgets have remained the same. Their budgets have not increased according to the gold rates,” remarked Pratap Kamath, managing director of Abaran.

Antony Chirayath, general manager of JOSCO Jewellers, observed similarly, noting that despite the consistency in several customers, the amount of gold being sold has reduced. “This is because people prefer to buy lightweight jewellery.”

Several vendors across the city have increased production and marketing of lightweight jewellery since its demand has gone up post the price hike. Mr. Chirayath said, “We have observed the preference for buying lightweight jewellery for the last two years. 18 karat gold jewellery sales have also increased.”

Impact on small businesses

Mr. Sharavana highlighted that while major gold dealers have a steady customer base, the price hike has heavily impacted smaller businesses in the gold industry. “Unless there is an emergency, buyers are still looking for big names when it comes to purchasing gold, putting further pressure on small dealers that dot the neighbourhoods,” he said.

Vijay Davanam, CEO of Davanam Jewellers, Kamaraj Road, said that they have been unable to apply any marketing strategies to attract customers. “Our customers totally dropped,” he said, while mentioning that they plan to put out limited offers on lightweight jewellery in the days leading up to the festival.