Big Bazaar expects revenues to decline as sale of non-essential items is put on hold

Forum Gandhi Mumbai | Updated on March 27, 2020

The Kishore Biyani-owned Big Bazaar is staring at a drop in overall sales as the sale of non-essential items has been prohibited. Over 40 per cent of products in Big Bazaar stores comprise non-essential items. The Centre has allowed the sale of essential items only during the 21-day lockdown.

The Big Bazaar CEO, Sadashiv Nayak, told BusinessLine that in order to comply with the orders, the company has shut down several sections and floors, including fashion, apparel, home, and other non-essential sections.

According to him, approximately 40 per cent of each Big Bazaar store comprises non-essential items. Without quantifying the drop, he said,“These sections have a significant share in each store, as food alone does not contribute to the entire sales”.

Big Bazaar, part of the Future Group, is a supermarket chain of 289 outlets spread across the country.

Since 40 per cent of each store is technically shut, it would translate into lower sales. “The entire industry is seeing a decline. Obviously, there will be a little decline in sections that are shut. Besides that, we have also seen a decline in a few stores in a few areas,” he said.

“We have told our team that our overall numbers (sales or revenues) are likely to be impacted,” said Nayak. He added that numbers or sales aren’t the company’s concern at the moment. “This lockdown is leading to panic buying. We want people to be able to buy their necessities to avoid a state of panic,” he said.

The company has been trying to figure out which stores are open, the availability of stock, coordinating with local authorities and issues of employees being unable to reach the stores.

Supply chain and distribution issues

BusinessLine had reported that retailers and online grocery players were facing issues in supply chain and deliveries as some local enforcement authorities were stopping delivery boys and van drivers at toll booths. A few of them were beaten up by the police.

“Though most authorities are supportive, what’s happening is that by the time it trickles down to the District Collector’s office or other local authorities, there is a lack of translation in communication. We need help. The staff have a letter from us, a declaration from the state that the essential stores should be open,” said Nayak.

According to a Future Group spokesperson, as of last week, there has been a significant spike in sale of staples and personal hygiene products, which has caused a demand-supply mismatch.

According to a recent study by LocalCircles, a social media firm, in the past three days, 17 per cent of consumers could not find most of the essential goods when they visited retail stores.

A report said 75 per cent of the companies contacted in late February and early March reported some kind of supply-chain disruption due to the coronavirus and 44 per cent of the companies didn’t have a plan to deal with this kind of disruption.

In-store app and doorstep delivery

Big Bazaar is working on innovative ways to ensure people spend lesser time at stores during the lockdown.

The retailer has launched an in-store quick-service app in Mumbai as a pilot. “Customers who have to buy fewer products can come to the store, and a customer service executive will help them order the products on the app, and the order will be delivered to their doorstep. This will mean lesser time at the store and a boost fpr social distancing,” he said.

However, even if it’s a success, Big Bazaar is not thinking about launching the app across India at the moment.

Alternatively customers can call a pan-India number and have the products delivered at their doorstep. The company saw a spike in calls within 48 hours of the launch of this service.

In a tweet on March 25, Big Bazaar said: “We are here to serve you. In light of the announcement, we have received an unprecedented number of requests for Doorstep Delivery. There could be delays due to restrictions on movements.”

Nonetheless, the company is positive that these attempts would help customers stay indoors, and yet, get their essentials.

On March 24, the Prime Minister called for a nation-wide lockdown as the number of coronavirus positive cases crossed 500. Prior to that, several state governments had called for a partial or complete lockdown.

According to the official lockdown notification, "Shops, including ration shops (under PDS), dealing with food, groceries, fruits and vegetables, dairy and milk booths, meat and fish, animal fodder" can remain open. The notification also said that "District authorities may encourage and facilitate home delivery to minimise the movement of individuals outside their homes."

Published on March 26, 2020

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