Despite stores opening up, the retail industry hardly has a reason to rejoice. The fear of contracting the virus has still kept shoppers away from stores. When the stores opened up in the beginning of June, many retailers did see pent up demand and footfalls were at 25-30 per cent of pre-COVID levels but that also died by the second week. For instance, the salon industry, after two weeks of high demand, saw footfalls dipping by over 40 per cent. A recent report by the Retailers Association of India says that retailers recorded a 67 per cent de-growth between June 15-30, compared to the corresponding period last year. The last two weeks of June, however, is a tad better than the first couple of months of FY21, which registered a year-on-year degrowth of 74 per cent.
With work from home likely to be be a way of life at least in the near term, consumers have started investing in durables and furniture that would make work from home easier. The RAI report reveals that consumer durables is on the road to recovery with a degrowth of just 19 per cent, while furniture degrew by 44 per cent and food and grocery by 40 per cent in June 2020 compared to June 2019. The worst hit are sectors such as restaurants and beauty and wellness which have degrown by 71 per cent, 69 per cent respectively. Apparel, jewellery, watches and personal accessories have de-grown by 67 per cent.
The rate of degrowth has been lower on high street compared to malls. According to the RAI report, high street stores in the second half of June, witnessed a degrowth of 62 per cent, while in the case of malls it was 77 per cent. Barring southern and eastern India, where malls have opened, malls in the rest of the country are still not operational.
"The figures depict a grim situation for not just retailers but the entire economy as retail is the backbone of consumption. The need of the hour is concerted efforts by all stakeholders- while retailers are doing their bit by following stringent hygiene practices, the policymakers too need to ensure uniform opening of all kinds of retail across the country," says Kumar Rajagopalan, CEO, Retailers Association of India.