Retailers, MSMEs, daily wagers hit hard by 2nd Covid wave

Meenakshi Verma Ambwani AM Jigeesh New Delhi | Updated on April 19, 2021

A mall looks deserted in the Capital on Sunday   -  KAMAL NARANG

Malls, restaurants grappling with revenue loss as most States impose curbs

Businesses, including malls, retailers and restaurants, are in a disarray as they grapple with restrictions, including weekend lockdowns and night curfews in different states and districts, as the country faces the second wave of Covid-19 pandemic. But daily wagers, casual workers and MSMEs, which lack deep pockets, have been hit the hardest.

Dalip Sehgal, CEO, Nexus Malls said, “With different rules and restrictions across states, it’s not just becoming difficult to conduct business, but it’s also leading to a lot of ambiguity amongst customers leading to a rapid decline in footfalls and sales.

Frequent night curfews, last minute decisions on weekend closures and complete lockdowns in places like Maharashtra are making sustenance extremely difficult and pose a grave threat to millions of those who are directly and indirectly employed in the retail sector across the country.”

AITUC Delhi general secretary Mukesh Kashyap told BusinessLine that daily-wagers and casual workers suffered due to Delhi’s two-day lockdown. “Most of them did not get wages during the 56-day lockdown. They have lost wages for two days now. For permanent employees, we will have to wait to see if the employers have cut their salaries for these two days,” he added.

Fearing a full lockdown

RSS-backed organisation for MSMEs, Laghu Udyog Bharati, also fears that the two-day lockdown may be followed by a full lockdown. Laghu Udyog Bharat's National Secretary Sampat Toshniwal said, “This is a beginning. We hope that this would not be stretched further. If this goes for more days, the impact on MSMEs will be much worse that the first lockdown. When production chain breaks, it will have an impact on demand, supply and overall economy of the country,” he added. On the other hand, according to estimates by Shopping Centres Association of India, malls across India, which had recovered close to 90 per cent of their business and 75 per cent of their footfalls, are witnessing a drastic drop due to the local restrictions.

“On an average, during pre-Covid days, the industry was clocking ₹15,000 crore per month and had reached the same during mid of March 2021, but with the local restrictions, almost 50 per cent revenue have been slashed,” it added.

Abhishek Bansal, Executive Director, Pacific Group said malls will need support from State governments and other authorities on fixed cost components such as property tax and fixed electricity demand charges among others to tide over this crisis.

Meanwhile, retailers, especially in categories that are driven by discretionary spends such as apparel, watches and footwear, are facing major challenges due to various restrictions and subdued consumer sentiment.

Siddharth Bindra, MD, Biba India, said, “We are yet again facing uncertain times. Business has been severely impacted and is down by over 60 per cent and footfalls are down by 80 per cent.”

Retailers are now hoping to re-negotiate rentals with landlords. Harkirat Singh, Managing Director, Aero Club, known for brand Woodland said, “Stores attract the maximum footfalls during the weekends and hence weekend lockdowns are crippling for retailers. At the same time, subdued consumer sentiment has also impacted sales.”

A ‘Catch-22’ situation

Companies are facing different set of challenges based on local restrictions. In Maharashtra, retailers are asking the State government to open up online deliveries for all goods, while in Delhi, restaurant players have raised concerns for not being able to get e-passes for movement of staff and deliveries during the weekend lockdown.

Thomas Fenn, Founder of Delhi-based Mahabelly Restaurant said, “It’s a catch-22 situation. Dine-in is not allowed in Delhi and restaurants’ only source of revenues currently are home deliveries. But most restaurants are either not getting approvals for e-passes or facing high rate of rejections.”

Published on April 18, 2021

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