Home >Industry >Retail >Retail businesses show marginal signs of recovery: RAI
August’s numbers are slightly more encouraging than RAI’s previous survey for July when retailers reported a 63% drop in year-on-year sales Photo: Abhijit Bhatlekar/Mint
August’s numbers are slightly more encouraging than RAI’s previous survey for July when retailers reported a 63% drop in year-on-year sales Photo: Abhijit Bhatlekar/Mint

Retail businesses show marginal signs of recovery: RAI

That retailers are nearing half their business levels compared to a year ago comes at a time when domestic consumption has been severely hit by India’s lockdown

New Delhi: India’s small and large sized-retailers said business in August recovered to nearly half compared to a year ago period as India moved to ease the stringent lockdown during unlock 3.0, however, sporadic localized lockdowns hampered gains made by easing up of restrictions, Retailers' Association of India (RAI), said in its sixth business survey on Wednesday.

"The survey revealed signs of marginal recovery as retailers continued to signal de-growth at -52% in the month of August 2020 on a Y-o-Y comparison," RAI said in a press statement. The smooth rollout of Unlock 3.0 in August 2020 encountered hurdles in the form of localised lockdowns in some States interrupting business planning and operations, it said.

That retailers are nearing half their business levels compared to a year ago comes at a time when domestic consumption has been severely hit by India’s lockdown—that was also among the most stringent in the world—to prevent the spread of covid-19. India’s GDP growth is set to shrink this fiscal.

However, August’s numbers are slightly more encouraging than RAI’s previous survey for July when retailers reported a 63% drop in year-on-year sales.

“The retail industry has started to witness some green shoots especially in States that are allowing retail to operate with fewer interruptions," Kumar Rajagopalan, CEO, Retailers' Association of India said in a statement.

Rajagopalan said that the central government’s assurance of curbing localised lockdowns will help fast-track recovery for retailers.

This will be especially helpful during the festive season when Rajagopalan expects sales to touch at least 80% of last year.

Some segments may even do better, he said.

The association that surveyed 67 mid-to-large sized retailers, and mapped their sales for the month of August, said it reported a marginal improvement compared to a year ago.

The improvement was specifically led by the sale of consumer durables—that saw steady recovery month on month largely driven by a surge in demand among households as they spend more time at home.

Even though sales of the category were down by over 20% compared to a year ago, sequentially they have seen improvement.

“In the month of August’20 on a Y-o-Y comparison, the only category that showed significant improvement was Consumer Durables with sales at -23%," according to findings of the survey.

Meanwhile, jewellery and watches remain the worst performing segments followed by QSRs, and furniture and furnishings that were down by over 60%.

Other categories such as food and grocery are still down 46% year-on-year, while apparel and clothing, still down 46%, showed improvement from the previous month. Sales of footwear retailers are still down 47% year-on-year in August.

Large retailers are drawing in more shoppers, especially in the consumer durables sector, the survey said.

“The Southern region is faring slightly better with sales at -46% y-o-y, followed by East at -52% y-o-y, and West & North at -54% y-o-y. On the whole, across regions, large retailers are performing marginally better than medium-sized retailers," RAI’s finding said.

However, small sized retailers performed better in the unorganized footwear and furniture segment.

RAI said it has appealed to the DPIIT and MHA to ensure that localized lockdowns are curbed to ensure business continuity.

“Despite the unlock 4.0 orders by the central government, local authorities in some states continue to impose partial lockdowns, which is dampening consumer sentiment and hampering recovery. RAI has appealed to the DPIIT and MHA to urgently intervene and instruct these State Governments to adhere the Central Government’s Unlock 4.0 guidelines as any shutdowns should be very carefully calibrated to ensure a balance between lives and livelihoods," RAI said.

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