Maharashtra shutdown: Retailers, traders fear closure of non-essential shops will cripple industry

Our Bureau New Delhi | Updated on April 05, 2021

Maharashtra continues to be a hotspot for new infections   -  PTI

The Retailers Association of India (RAI) urged the Maharashtra government to calibrate a balance between lives and livelihood and stated that complete shutdown of non-essential retail businesses will impair the ability of retail and allied businesses to survive.

The Confederation of All India Traders (CAIT) has also urged the State government to not overlook the economic impact of such restrictions.

Calling it a ‘Retail Lockdown’, RAI said that the order by the Maharashtra Government issued on April 4, has brought a majority of retail businesses to a complete halt. It added that retail businesses of non-essential goods are feeling discriminated against for being pressed by restrictions without any respite from the government.

Retail lockdown

In a statement, Kumar Rajagopalan, CEO, RAI, said, “The retail industry will again start experiencing severe liquidity challenges due to the ‘Retail Lockdown’ in the State, while the fixed operating costs remained intact. It is expected that the retailers pay electricity bills, property taxes, among others inspite of being shut. The new order will have a contagion effect on the entire retail ecosystem in the state and across the country majorly impacting manufacturing and employment of millions.”

“Nearly 60 per cent-70 per cent of costs are fixed costs. This, along with low margins, leaves businesses with limited flexibility. Rents and salaries to employees make a large part of this cost. Large capital is invested as working capital as it is a long lead time industry. As most of this is borrowed capital, retailers are already finding themselves in a deep liquidity crisis. Though the manufacturing sector is permitted to operate in the State during this time, they will be unable to get orders since retail is shut,” he added.

The retail industry said that formal retail spaces are controlled spaces and have SOPs in place and have the ability to adhere to hygiene standards and can definitely ensure social distancing, as compared to local markets.

“While the order mentioned that the stores cannot be opened until all employees get vaccinated, there has been no recognition of retail employees as frontline workers or prioritising their inoculation. Nearly 90 per cent of the frontline retail workforce is less than the age of 45 years," RAI stated adding that it has urged the Health Ministry to consider prioritising vaccination for the frontline retail workers.

Tweak in timings sought

Meanwhile, CAIT urged the Maharashtra state government that instead of a full lockdown, timings for non-essential shops should be reduced from 11 am to 5 pm and in cooperation with Trade Associations, extra efforts can be made to maintain Covid safety protocols at all levels.

Praveen Khandelwal, Secretary General, CAIT, said, “Other states who are suffering from rising coronavirus, may follow Maharashtra. Though strict measures are needed to combat Covid increase. The role of supply chain manned by the traders assumes much significance as the total population of the state or the country largely depends upon the traders for seamless supply.”

Published on April 05, 2021

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