BackRetailers continue to see slump in biz; malls see bigger dip in sales: Survey
Restaurants and QSRs, that rely on high footfalls, are the worst affected with a 70% dip in year-on-year salesConsumers with pre-planned purchases are picking large and trusted brands for their store visits to buy mobile phones, laptops, household groceries and furnishing goods etc
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New Delhi: Shoppers in India’s top cities aren’t stepping out to shop—despite easing of restrictions across the country. A survey by Retailers Association of India (RAI), conducted with over 100 large and small retailers, between 1 June and 15 June, suggests that retailers in malls reported a 77% year-on-year dip in business in the first 15 days of the month; while high streets saw business decline by over 60% in the same period, reflecting a grim consumer sentiment in the country that is in the grip of the coronavirus infection.
Restaurants and QSRs, that rely on high footfalls, are the worst affected with a 70% dip in year-on-year sales. Moreover, consumers cooped up at home gave discretionary categories such as apparel and clothing, jewellery, watches, accessories and beauty a skip—all categories reported over 60% slump in business in the first 15 days of June, compared to the same period a year ago.
“After the central government’s announcement in early June, most states permitted malls and high street retailers to reopen after a gap of more than 70 days. However, it was found that consumer sentiment continues to be at a low," RAI said as part of the survey's findings on Sunday.
Interestingly, categories such as furniture and furnishings, food and grocery, and consumer durables led the recovery in sales at high street stores with large sized retailers, or those with a turnover of a over Rs300 crore, reporting an average 14% year-on-year growth. Consumers with pre-planned purchases are picking large and trusted brands for their store visits to buy mobile phones, laptops, household groceries and furnishing goods—things they need as they largely stay indoors.
However, small retailers and malls are struggling to draw shoppers who continue to avoid large, crowded spaces and remain frugal as uncertainty about finances and the fear of infections is prompting them to hold back on any discretionary expenses.
“At the same time, small retailers are indicating a significant dip (-33%) in the same categories. However, businesses in malls continue to be in deep red zone across all categories. The trend was consistent across regions," RAI said.
Most businesses in malls—spanning restaurants, apparel and footwear retailers, electronics stores—reported between 50-90% dip in sales.
Parts of west and north India—where cases in large cities of Delhi and Mumbai—have risen sharply, continue to lead the slump in overall retail trade in the country. “Region-wise findings indicate that sales in the first half of June 2020 suffered the most in West (-74%) and North (-71%) India compared to the same period last year. East and South signalled a fall in sales at -63% and -59% respectively," RAI said.
More retailers resumed businesses earlier this month, with a degree of caution, after India moved to the “unlock" phase after a protracted lockdown that began in late March. Retailers, restaurants, and mall developers suffered huge losses as consumers remained indoors; moreover a surge in infection rates in the country’s top cities is likely to strain businesses further.
“While we appreciate the Centre’s intent to restart the economy and open up retail with detailed guidelines under the Unlock 1.0 phase, it is important for states to embrace the mandate and ensure smooth and regular opening of all forms of retail. Retailers are following stringent safety and hygiene protocols to ensure a safe shopping environment for consumers. We hope that in the coming days, restrictions across states will ease in a uniform manner, which is crucial for consumption to pick up," Kumar Rajagopalan, CEO, Retailers Association of India said in a statement.
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