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Retail segment feverish as COVID second wave hits with restrictions in place

The strain on the retail industry threatens to cripple the entire value chain

Retail markets in urban centres may face acute labour shortage as people have migrated to their towns and villages in the wake of COVID-19 pandemic | AFP The retail associations and bodies are opposed to the strict restrictions by a few states in order to curb the pandemic and cry that they would be hit badly in the months to come if the measures continue for some more time | AFP

The retail segment that was on the verge of recovery and inching towards pre-pandemic levels seems to have received a setback due to the restrictions due to the second wave of the Covid-19 pandemic. As the number of Covid-19 cases surge and the pandemic takes a new turn with the second wave in the country, the retail industry is beginning to see similar issues repeating in some form that were faced last year with varied localised restrictions across states in the country. The Indian retail industry had faced many hurdles last year due to the pandemic-led lockdowns and localised restrictions and had a tough time rebooting again. 

The retail associations and bodies are opposed to the strict restrictions by a few states in order to curb the pandemic and cry that they would be hit badly in the months to come if the measures continue for some more time. The Retailers Association of India (RAI) believes that there is a need for a coordinated effort at handling the second wave of the pandemic rather than creating diverse restrictions at the local levels like the local weekend lockdowns, shutdown at 8:00 pm and arbitrary testing inside malls, among others. 

“The RAI has been highlighting the fact that formal retail spaces, especially shopping centres are controlled spaces and have SOPs in place. They have got the ability to adhere to hygiene standards and can definitely ensure social distancing, as compared to local markets. The government could also consider these places to be used to vaccinate citizens and speed up the inoculation drive. However, as soon as pandemic seems to surge, a new wave of restrictions seem to apply on these places first, which beats the logic in our mind. These extemporized restrictions are creating setbacks for retailers as the already stressed retail businesses are getting further interrupted and in turn, dampening consumer sentiment,” remarked Kumar Rajagopalan, CEO, Retailers Association of India (RAI). 

RAI maintains that India will always be a consumption economy and strain on the retail industry cripples the entire value chain, which involves manufacturing, entertainment, right down to artisans and other micro enterprises. It has warned that such restrictions again may lead to layoffs and down scaling or even shutting down operations widely. The retailers' body feels that removing roadblocks at the local level will not only help retailers to plan ahead, but will also help them make decisions on hiring. It will also help the exchequer in the form of taxes collected by the state governments like GST, among others, which is important to help revive the economy. 

As per RAI, localised decision-making can be political in nature and can create a serious impact on the industry. Many of the states and sometimes municipalities continue to take ad hoc decisions at a local level, which has a distressing impact on the already strained retail businesses. The association has said recovery will need unconventional solutions and government support and at this juncture, all efforts are required to boost the local economy and help revive retail, saving millions of jobs. 

“We appreciate all the efforts taken by the Maharashtra government to curtail the spread of the pandemic. While it is important to control the surge of the second wave of the pandemic by taking adequate measures, it is also important to ensure that economic activities and livelihood are not impacted. The new requirements of random tests on consumers for entry into malls is causing inconvenience to customers, and mandatory closure at 8pm has begun to further impact the already ailing retail and malls businesses. On the contrary, longer operational hours will support the social distancing norms as footfalls will spread out allowing customers to visit malls at their convenience and benefiting businesses to recover faster. Malls are controlled spaces and can easily carry out  stringent safety and hygiene protocols, and also adhere to social distancing norms unlike local marketplaces,” observed Sachin Dhanawade, chief operating officer-retail and real estate, Grauer and Weil (India) Limited, which operates Growel’s 1O1 Mall in the Kandivali suburb of Mumbai.

Meanwhile, the Confederation of All India Traders (CAIT) had expressed concerns over the restrictions due to the pandemic and had said that after the Covid-19 lockdown, the retail sector of the country was awaiting the celebration of Holi starting this year for a long time. However, after the Covid-19 guidelines issued on Holi in all the states, including Delhi, traders all over the country had faced challenges in selling their stocks due to the second wave.

Due to an increase in Covid-19 cases this year people were scared and decided to celebrate Holi at home, due to which there had been a tremendous decline in the business of Holi. CAIT estimates that around Holi, retailers across the country have faced a business loss of around Rs 25,000 crore, out of which there had been a loss of around Rs 1,500 crore for Delhi retailers alone. 


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