Delhi Businesses See 20-30% Drop In Sales As Smog Keeps Consumers Indoors

Extreme pollution in the capital city and its neighboring regions is taking a toll on businesses, as residents choose to stay indoors to protect themselves from hazardous air quality. The bustling local markets, cafes and restaurants as well as shopping malls have seen a 20-30% decline in foot traffic and sales over the last few days, with consumers prioritising their health and well-being over shopping and dining.

"Sunday was particularly scary," said Kabir Suri, co-founder of Azure Hospitality, which runs popular chains like Mamagoto, Dhaba Estd. 1986 and Sly Granny. "Sales at our open-air restaurants fell by 20% during the weekend gone by, while our mall outlets are seeing more than 15% decline."

To tackle the alarming situation, the Delhi government enforced Stage IV of the Graded Response Action Plan on Nov. 18. This included curbs on vehicular movement, limiting access to commercial areas and impacting businesses directly. Besides, operational hurdles have arisen due to restrictions on diesel vehicles, including trucks, leading to delays in the transportation of goods to markets.

"Small and medium enterprises, especially in markets like Chandni Chowk, Karol Bagh, and Lajpat Nagar, Connaught Place, South Extension, Sadar Bazar, Kamla Nagar, Pitampura, etc. are experiencing sharp revenue drops due to reduced customer visits and supply chain issues," according to Praveen Khandelwal, secretary general, Confederation of All India Traders. "Whereas seasonal businesses, those relying on weddings, are bracing for huge losses as pollution curbs coincide with the peak sales period."

CAIT's Khandelwal estimates that the loss in business could be nearly 20%.

A toxic blend of smoke and fog blankets the city every year during winter as cold air traps dust, emissions, and smoke from stubble burning in surrounding states. Businesses are worried that prolonged severity could jeopardise their crucial festive sales, particularly after a turbulent recovery from the pandemic followed by a slowdown in discretionary spending driven by high inflation.

The upscale Khan Market in Lutyens Delhi turned into a "virtual ghost town", according to Sanjiv Mehra, president of the Khan Market Traders’ Association. "This is usually a peak time for us, especially with the ongoing wedding season. But we have seen our sales fall by 50% in the last 15 days as people are scared to come out, especially those with children."

Shopping malls in the city are also experiencing a 20-30% decline in visitors compared to last year — a concerning trend following lackluster sales in the first half of the financial year. Typically, the festive season leading up to Christmas and New Year brings crowds of shoppers eager to spend.

"All our malls have better indoor air quality than outdoor as installed HEPA filters," said Pushpa Bector, senior executive director, DLF Retail. However, she acknowledged that footfalls were lower than normal in the malls.

After GRAP Stage IV was rolled out, the pollution level in Delhi dipped a bit, but it remains dangerously high.

The latest data from the Central Pollution Control Board indicates that the air quality level remained "severe" in Delhi with an index value of 419 as of 4 PM on Nov 20. The air quality of surrounding areas like Ghaziabad, Noida, Greater Noida, Gurugram was also "very poor", the data showed.

Businesses are hopeful that improved air quality will support a return to normalcy. But, for now, the thick haze hangs over parts of North India, affecting both public health and the economy.