Despite unlock 2.0 in progress, businesses are still waiting for their merry-times. Due to the constant increase in the number of COVID-19 positive cases, people still refrain themselves from moving out of the house. Hence retailers are experiencing very few footfalls resulting in around 67 percent de-growth. This leads to non-recoverable economic damage to the value chain, finds Retailers Association of India (RAI) survey.

In its latest business survey conducted by RAI with more than 100 big and small retailers, it reveals that there has been no significant growth in business or retailers even during the second half of June. Apart from experiencing 67 percent de-growth from June 15 to 30 compared to the corresponding period last year, malls witnessed 77 percent de-grwoth (YoY) on account of not being allowed to open uniformly across the country, high street retail showed de-growth of 62 percent (YoY) in business despite being allowed to open across India.

Kumar Rajagopalan, CEO, Retailers Association of India, comments on the current state of retail despite the best efforts of the Central government to open retail, “Although the quantum of de-growth majority reduced in June 2020, the first quarter of FY21 continued to witness de-grwoth of -74 percent. The figures depict a grim situation for not just retailers but the entire economy as retail is the backbone of consumption. The need of the hour is concerted efforts by all stakeholders. While retailers are doing their bit by following stringent hygiene practices, the policymakers too need to ensure uniform opening of all kinds of retail across the country”.

Retailers are doing their bit by following stringent hygiene practices, the policymakers too need to ensure uniform opening of all kinds of retail across the country

But is this reasoning valid in the times when the country seems to have started experiencing community transmission? With more businesses opening and inviting consumers out of their home, the contamination will increase profoundly resulting in India climbing the global COVID-19 meter higher to the next level. Even consumers want to stay away from getting infected. Even an earlier consumer sentiment survey by RAI reveals this. According to it, 60 percent of the consumers will wait up to 90 days before shopping, keeping in mind expenditure and safety factors. This move however significantly resulted in slow growth for the retail sector throughout June.

However segments like consumer durables (-19 percent YoY), furniture and furnishing (-44 percent YoY) and food & grocery (-40 percent YoY) are recovering faster in June 2020 compared to last year. High street retail stores are leading this recovery across these categories while business in malls continues to be in deep red. In June, large size retailers (>300 crore sales) witnessed a de-growth of 59 percent YoY while small retailers (<300 crore sales) witnessed a de-growth of 69 percent YoY. The region-wise findings indicate that West (-74 percent YoY) and North (-71 percent YoY) continue to suffer the most. East and South both signaled a 62 percent (Y0Y) fall in sales.

As the cases of coronavirus is increasing constantly in the country, the retail industry will have to wait for a while to experience growth, possibly by the end of this year.