What is the impact of coronavirus on Retail business in India?

Indian retail industry has more than15 Million traditional and Modern retailers. The Indian retail sector employees more than40 million people and their contribution is approx. 40% to consumption and 10% to country GDP. The lockdown implemented by govt to prevent the spread of coronavirus. This adversely affected the Indian retail business. Except stores that are providing essential goods and grocery, all stores have been closed and non-essential good providers reports 80-90% deduction in sales.

85% of Retail cost are fixed cost, which is putting financial pressure on the retailers. During this lockdown, industry is experiencing liquidity challenges which leads to large scale of unemployment. The survey was done by Retail Association of India to gauge their view on impact of Covid-19 on their business and manpower. The survey was filled by 768 respondents across India.

Among that (135)18% of respondent were food retailer and (633)82% were non-food retailer.

Small Retailers : 65% of respondent

Medium Retailers : 24% of respondent

Large Retailers: 11% of respondent

RAI highlighted the survey result from the following key:

Impact on Non-Food Retailer :- More than 95% of retailers have closed their shops in the lockdown and practically there is no revenue till the lockdown is in place. In next 6 months, Non-Food retailers expected to earn 40% of revenue as compared to last year revenue.

Impact on Food Retailer :- Most of Food Retailers also sell non-essential goods in the same and/or different stores. The non-food business in the stores has come to a standstill in the lockdown leading to revenue loss. Additionally 25% of these retailers have non-food stores which have been closed leading to further losses.In the next 6 months, Food Retailers expect to earn 56% as compared to last year’s revenues.

Small Retailers are expecting to lay-off 30% of their manpower going forward, this number falls to 12% for Medium Retailers and 5% for Large Retailers. On the whole, retailers who responded to the survey expect layoff of about 20% of their manpower.