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Tuesday, October 20, 2020

Weekend curfews dragging back retail industry

In times like this when the business is inelastic, it is crucial to keep stores open on all days, and for extended hours, RAI said. Only this will help retailers crawl back from the financial distress they have been facing and encourage social distancing.

The Indian retail industry continues to struggle to get back to its feet with constant roadblocks being faced at the state and local levels with weekend curfews and partial lockdowns, which continue to hurt retail business and dampen consumer sentiment, said Retailers Association of India (RAI) in representations to the states and local authorities.

Over 10 states like Punjab, Haryana, Kerala, Madhya Pradesh, Uttar Pradesh, Jammu & Kashmir, and Nagaland continue to impose irrational weekend lockdowns, it said.

“For retailers are dependent on the weekend business to help recover from the financial stress they have been facing. However, local authorities in some states continue to impose strict lockdowns on weekends, which are becoming a huge setback in their path to recovery,” RAI said.

In times like this when the business is inelastic, it is crucial to keep stores open on all days, and for extended hours, RAI said. Only this will help retailers crawl back from the financial distress they have been facing and encourage social distancing.

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“These are knee jerk reactions that are crippling the sector and gravely affecting the economy. We have urged the centre and the states governments to collaboratively work towards supporting the revival of the retail industry. India will always be a consumption economy, and if the retail industry suffers, it will have a rippling effect on the entire value chain which involves manufacturing, entertainment, right down to artisans and other micro-enterprises,” said Kumar Rajagopalan, CEO of RAI.

“For retailers, nearly 60%-70% of costs are fixed costs – rents and salaries to employees make a large part of this cost. This, along with low margins, leaves businesses with limited flexibility that has already started leading to layoffs and downscaling or even shutting down operations widely. If the weekend business is lost then the hopeful recovery from the festive season will become a distant dream,” Rajagopalan further said.

Recent Retail Business Survey by RAI indicated that businesses continued to be impacted with marginal recovery observed in the month of July 2020 (-63% y-o-y) as compared to June 2020 (-67% y-o-y) after witnessing more than 80% losses in April 2020 (y-o-y).

SourceET Retail
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