A surge in India’s covid-19 graph has several retailers and consumer goods companies worried as states move to partial restrictions, curb large public gatherings and order random testing at malls, a move that could dent consumer demand and stall recovery.
While retailers across the board said they do not anticipate measures as stringent as the March 2020 nationwide lockdown but admitted they are watchful of impact on consumption.
For starters, restricted store-timings is a major concern for retailers. Nilesh Gupta, director at electronics retail chain Vijay Sales said that the summer season has kicked off with a strong demand for cooling products, “but in case there is restricted store timing, sales may get impacted”.
An executive at another consumer goods company said if the covid-19 situation worsens, consumers may become anxious, affecting spends. “The economy is barely recovering, and it will be a big blow if the cases rise,” the person said, declining to be named.
Dinesh Chhabra, CEO at appliances company Usha International said that “the second wave is on us, it is we the people who need to take the onus of curbing its growth… The only recourse the government has is to impose a curfew or a lockdown, the impact of which we already witnessed in the first round. Lockdowns adversely impact businesses, which in turn impact livelihoods and individuals.” He warned of the “grave snowballing impact” of lockdowns on businesses, individuals and the economy.
On Sunday, India reported 43,846 fresh covid-19 cases—the highest single-day surge in 2021. Maharashtra announced strict measures in several cities with the Brihanmumbai Municipal Corporation (BMC) asking for random testing at malls, railway stations, bus depots, markets, tourist places and government offices. Meanwhile, Punjab has closed most educational institutions and in 11 worst-hit districts, it has capped the number of people allowed to attend funerals, cremations and weddings. Ahmedabad directed malls and cinema halls in the city to remain closed on Saturday and Sunday, apart from enforcing temporary night curfews.
Retailers said the imposition of night curfews is bound to make recovery uneven across India, especially for apparel retailers who are expected to close FY21 with a 40-45% drop in business. Benetton India managing director Sundeep Chugh said that every market is performing differently given the restrictions in a particular area. “For instance, the markets which are under night curfews are on a slightly lower end of the demand scale due to limited shopping hours and thereby decreased footfall. Similarly, there have been few closures in select cities over the weekend which of course has directly impacted sales,” he said.
On Saturday the Shopping Centres Association of India (SCAI) asked the BMC to reconsider its random testing rules for malls in Mumbai as it is likely to spread fear among the public, dissuade genuine shoppers who have slowly returned to shopping centres and put into motion a spiraling effect on modern retail that could derail recovery of the segment. The move could eventually lead to a complete shutdown for the industry and cause job losses, SCAI said in a statement.
Last week, Maharashtra also directed cinema halls, hotels, restaurants and offices (except those related to health and essential services) to function at 50% capacity. Film trade experts point out that there may be some cause of concern with Maharashtra being the heart of the film business in India, and current curbs impacting as much as 40% of box office collections of films. Overall, Mumbai and Delhi contribute as much as 50% of the earnings of Hindi films. “More importantly, entertainment tends to be the last priority for people with such scary news and restrictions coming in. They wouldn’t want to take the risk of going out to the theatre when they aren’t even in the right headspace,” film producer, trade and exhibition expert Girish Johar said.
Yet most companies said they have learned their lesson in the first wave and are equipped to handle disruptions.
Alisha Malik, VP, marketing and e-commerce at footwear retailer Metro Brands Ltd, said that the pandemic enabled the company to see new opportunities and adapt to new techniques and ways of working. Most of the brick-and-mortar outlets are operational in cities where the impact is low and there has been substantial increase in e-commerce sales. “We cater to our customers via the stores, own e-commerce, marketplaces, home visits, pop-up stores in apartments and now even Whatsapp shopping,” she said.
Consumer electronics maker Panasonic India said although it is ready with its product range for the summer season, the company is evaluating remedial measures in case of any disruption in manufacturing or sales.
Lata Jha contributed to the story.