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Coronavirus impact: Retailers fear job losses as revenues fall 30-35%

As per a survey, 25 per cent small retailers sought working capital support from the government to run their business post lockdown, while over 50 per cent were relatively sure that it's end of the road for them

twitter-logoAjita Shashidhar | April 27, 2020 | Updated 15:37 IST
Coronavirus impact: Retailers fear job losses as revenues fall 30-35%

Associations like the Retailers Association of India (RAI), Clothing Manufacturers Association of India (CMAI) and National Restaurant Association Of India (NRAI), which represent 66 million employees, have called out to the government for urgent help in order to be help the members of their respective associations restart their business post the COVID-19 lockdown. In a webinar organised by Trust For Retailers and Retail Associates Of India (TRRAIN), the heads of these associations have urged the government to offer them immediate help with working capital, extended tax holidays and moratorium.

Rahul Mehta, President, CMAI, said that if the government doesn't come to their aid, the textile sector would see over 1 crore job losses. "Over 80 per cent of the garment industry comprises of MSMEs which don't have the resources to pay salaries to their employees. A wage subsidy from the government will help them to retain their employees." Mehta said that over 20 per cent of garment manufacturers would have to shut down their business post the lockdown, while, 60 per cent would incur revenue losses to the tune of 40 per cent. Similarly, Kumar Rajagopalan, CEO of Retailers Association of India said that in a survey conducted by RAI, 25 per cent of the small retailers said they will be able to run their business post COVID-19 only if they got working capital support from the government, while over 50 per cent were relatively sure that it's end of the road for them. "If this happens, there will be a huge impact on jobs," pointed out Rajagopalan.

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"We are fighting a battle of survival. The proportion of fixed operational expenses is high in our business therefore losses are high too," added Anurag Katiyar, President, NRAI. B S Nagesh, Chairman of TRRAIN said that the retail industry needs urgent help from the government to stay afloat. "They have to facilitate retailers to get working capital and also give a longer moratorium." Kumar of RAI talked about enabling ease of doing business in the new normal post coronavirus. "Can payment of property tax be postponed, or can licenses be renewed once in five years instead of renewing every year? All these moves will help reducing friction."

Can the retail industry bounce back without government help? Katiyar of NRAI and Mehta of CMAI said that in a situation like that, companies will have to manage with a sustenance allowance. "We have to look at it as a human problem. So, if I pay Rs 10,000 to my employee per month, I will pay Rs 5,000 for two months just to keep his kitchen fire burning," explains Katiyar.

Rajagopalan says that the need of the hour would be to look for partnerships. "If banks also refuse loans, then the retailers will need to swallow their ego and even partner with their competitors to manage funds to keep their business going."

The retail industry said, Nagesh, will see revenue drops anywhere between 30-35 per cent and the biggest challenge that retailers have in hand is to run their business with 100 per cent employees despite the huge dip in revenue.

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