Economy

Weekend lockdowns mean big loss of business, rues retail industry

Meenakshi Verma Ambwani New Delhi | Updated on August 28, 2020

With the festival season round the corner, retail players are a worried lot   -  AFP

Supply chain, logistics are getting severely hit, says retail players

With the festival season approaching and more States imposing weekend curfews and partial lockdowns amid rising Covid-19 cases, the retail industry has raised concerns about their impact on operations, consumer sentiment and the recovery of the segment.

Retail industry players pointed out that weekend/partial lockdowns in many regions include shutting down of not only non-essential shops and warehouses but also essential shops and this is hitting business.

Supply chains disrupted

Harkirat Singh, Managing Director, Aero Club which owns the Woodland brand, said, “Sales during the weekend on an average contribute 45-50 per cent to the entire week’s business. Hence, such lockdowns are hurting retail industry’s business. Weekends are also important for supply chains and logistics purposes, which are also getting disrupted.”

Festival season ahead

The festival season, which contribute nearly half of the annual revenues of retailers, is round the corner and if retail stores are not allowed to open on weekends, it will hit their business hard, he added.

As of date, more than 10 States have imposed weekend lockdowns to curb the spread of Covid. These include Punjab, Haryana, Madhya Pradesh, Uttar Pradesh, Nagaland, Assam, Chandigarh, Andaman & Nicobar, Jammu & Kashmir and Jharkhand. West Bengal, and Uttarakhand are imposing partial lockdowns. Some local level authorities are also imposing partial or weekend lockdowns in cities.

Arvind Mediratta, MD and CEO, Metro Cash & Carry India, said, “The weekend lockdowns are severely impacting the brick-and-mortar retail industry and the uncertainty also dampens consumer sentiment. Even as consumers are working from home, weekends are important for them to shop.”

Loss of taxes flagged

Industry bodies such as the Retailers Association of India (RAI) and the Shopping Centres Association of India (SCAI) have raised concerns with various State and local authorities regarding this issue. The RAI has also argued that the loss of sales due to weekend/partial lockdowns directly impacts the taxes collected by State governments.

Association CEO Kumar Rajagopalan said that the loss of sale on weekends is “exacerbating the financial woes of retailers”, who are struggling to pay rents, bank EMIs and salaries.

“Retailers are depending on the weekend business to recover from the financial stress they have been facing. Such restrictions at the local level throw a spanner in the wheel and result in a cascading effect that negatively impacts the entire value chain. Not only does it create uncertainties for retailers but also disrupts the supply chain. If the weekend business is lost then the hoped-for recovery from the festival season will become a distant dream,” he added.

SOPs for safe shopping

Amitabh Taneja, Chairman, Shopping Centres Association of India, said the SOPs developed by the industry are stringent to ensure social distancing and offer safe environment to consumers for shopping.

“There has to be a concerted effort to find ways in which businesses are allowed to operate while containment measures are implemented. Frequent lockdowns will end up creating a greater economic impact than what the first lockdown did,” he added.

Published on August 28, 2020

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