Weekend curfews continue to hurt retail sector: RAI

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August 26, 2020 8:43 AM

The month of July witnessed a 63% degrowth in sectoral business year-on-year (y-o-y) after registering an estimated 67% y-o-y degrowth in June, indicated surveys by RAI.

Weekend curfews, retail sector, partial lockdown, covid 19 pandemic, RAI, weekend business, coronavirus lockdownConsumption remains tepid and businesses have failed to attract decent footfalls since resumption of operations in a phased manner starting early June.

Weekend curfews and partial lockdowns continue to hurt the retail sector that makes over 45% of a week’s business during the weekends, according to a survey released by The Retailers Association of India (RAI) on Tuesday. The month of July witnessed a 63% degrowth in sectoral business year-on-year (y-o-y) after registering an estimated 67% y-o-y degrowth in June, indicated surveys by RAI. Segments like apparel, sports goods and beauty & wellness have been severely impacted.

Over 10 states continue to impose “irrational” weekend lockdowns including Punjab, Haryana, Kerala, Madhya Pradesh and Uttar Pradesh. “After facing losses for over four months due to lockdown, retailers are depending on the weekend business to help recover from the financial stress they have been facing. In times like this when the business is inelastic, it is crucial to keep stores open on all days and for extended hours,” RAI said in a statement.

Consumption remains tepid and businesses have failed to attract decent footfalls since resumption of operations in a phased manner starting early June. Consumers have restricted purchases to essentials and need-based items. Discretionary spending is yet to pick up and even discounts have failed to spur demand. Some retailers have had to shut a few outlets after rental negotiations with landlords did not work out.

While business has been lost, retailers continue to incur fixed costs that make up nearly 60%-70% of a retailer’s total expenses. “This, along with low margins, leaves businesses with limited flexibility that has already started leading to layoffs and downscaling or even shutting down operations widely. If the weekend business is lost then the hopeful recovery from the festive season will become a distant dream,” said Kumar Rajagopalan, CEO, RAI.

RAI said it has submitted representations to state and local authorities requesting removal of the timing and days of restrictions that have been imposed in some regions derailing smooth operations.

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