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A series of acquisitions over the last few years, compounded by the covid-19 crisis, prompted Kishore Biyani to sell his chain of retail stores, warehousing and logistics businesses to Reliance Retail in a slump sale amounting to 24,713 crore earlier this year.

“I think with this business, we got into a trap, to be very honest with covid...if you look at the first 3-4 months, we lost nearly 7,000 crore in revenue and there was no way we would have survived losing 7,000 crore. The problem is, rent does not stop and interest does not stop," Biyani said in a conversation with B. S. Nagesh, founder, TRRAIN, and chairman and non–executive director, Shoppers Stop. It was part of an hour-long chat at the Phygital Retail Convention hosted on Wednesday.

Biyani acknowledged that the group had made too many acquisitions in the last 6-7 years, specially of small-format stores. “Somehow everything came together with this covid—when we saw it coming, I thought there was no other answer but to exit." He said that the group had other options, but it needed to find a “holistic solution" to clear its mounting debt, than to part ways with one entity or format.

Biyani, who sold the retail business comprising 1,800 grocery, lifestyle and apparel formats, including Big Bazaar, Foodhall, Fashion at Big Bazaar and Nilgiris, to Mukesh Ambani’s Reliance Industries in August, is left with a very limited part of the group’s consumer-facing business—namely manufacturing of packaged consumer goods. However, he spoke at length about the future of consumption in the country.

Biyani said covid will prove to be a huge setback for India’s consumption story and retailers and marketers will need to work hard to get shoppers come back to stores. Consumer behaviour and patterns have changed, and curbs on mobility have rendered several large-format stores useless at this point in time, as consumers are preferring to make trips to shops closer to home, said Biyani.

The last six months have been a good time for introspection and how customers have changed. The pandemic will contract India’s economy as forecast by several financial agencies. “...Our economy is going to shrink and we will have to restart our life again from there. So, we will have to rebuild consumption in a way, (because) our consumption is definitely going to drop." Biyani warned the worst is yet to come for retailers.

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