The Indian retail sector has incurred a loss of about Rs 19 lakh crore in the last five months due to the coronavirus-induced nationwide lockdown. However, while several other sectors have started showing signs of recovery, retailers continue to face uncertainty as the footfall has remained weak despite the country going into an ‘unlock’ mode.
“The entire retail trade, which if often called a growth engine of the economy, is in great dilemma never seen before. The retail market is gripped with acute financial crisis as even the supplies made in November-December, the payment of which was to be released in February-March is still pending and there is no hope of its early realization,” the Confederation of All India Traders (Cait) said in a statement.
Praveen Khandelwal, secretary general, CAIT, said that domestic trade in the country was passing through its worst period in the “current century which reflects that if immediate steps are not taken about 20 per cent of the shops in India will have to close down.”
While revenues shrunk for lakhs of retail establishments with the imposition of the lockdown, a study conducted by Anarock and Retailers Association of India (RAI), ‘Indian Retail – Certainty Despite Headwinds’, revealed that the demand for essential items has surged. The average bill value for essentials has gone up by 1.5 times after the lifting of the nationwide lockdown. The average bill which was Rs 650 per basket in early March is now Rs 900 per basket, the study showed.
“This could also be due to the pent-up demand,” an analyst said. A pent-up demand usually refers to a situation when the consumption rises suddenly after very low levels. This situation can often be seen in recessionary times.
The study shows that food and grocery, followed by apparel, electronics, furniture and home furnishings, could see a V-shaped recovery within the next two-three quarters.
At present there are about seven crore traders and retail establishments employing another 40 crore people..