Give us an overall picture regarding the data you have put out. Region wise it shows that the western region is hit the most. Is that because of longer duration of restrictions in the state of Maharashtra?
You are right, it is because of the initial problems happened in Maharashtra and so the reactions happened in Maharashtra, and western region automatically gets impacted. It is a very large market and that has impacted the region. It is worrisome and we know that things were improving as the data shows. As of March, we knew that things are getting better but there was worry among retailers that there could be some problems and are we ready for it. The April figures are automatically showing the problem that we thought could be the worry.
Are you seeing items linked to discretionary spends undergoing a tough time?
So, this is the new impact. For example, last year by June when things were getting better, some of the categories that really did well were things like sportswear, electronics etc., because people were at home and there were few things that they wanted. They wanted home wear items, they definitely wanted items to be able to keep themselves fit. So, sportswear was still selling very well. Electronics was on a boom and everybody wanted to buy because they were trying to set up their house to become an office or the house to become a school.
These were the things that was doing well. This time the worrying trend is not only has the business been impacted because of the lockdowns, but also the deliveries got stopped. One of the things that we did not understand is when we have learned our lessons, why are we stopping home deliveries? This is creating an issue. Now even the small store nearby could find out from its customers what they want and deliver without needing the customer to come into the store. Plus, ecommerce should be allowed to be able to work because overall understanding of this whole essentials, non-essentials, it is not the same anymore as it was last year. So, these are things that have created the big issue for us.
But this is restricted to just Maharashtra is not it you are talking about the essential, non-essential which is restricted just to one state and that is also loosening up overall would you say that most retailers have not been able to make the full transition to an online kind of a model where you do not require people to come in?
Actually, it is that many of the key markets in the country have got restrictions. That is the first part. In the key cities there are restrictions. The other part is that this is not about transition, the percentage of ecommerce in this country has been about 4%. Even if you double it, it is not going to go anywhere. It is not doubled. So, I think we are trying to see if the tail can wag the dog. At the end of the day there has to be enough capability for the local stores to be able to take care of the customers who come to them and talk to them.
There is a lot more trust with our own local dukaans, as we talk. Both are essential. I will not ever undermine the requirement of ecommerce, but the local stores are much larger and they are much more needed in this country and we have a large population. Now this is what really propels the business. Frankly what is happening is this is not something that we can blame the government for because it is happened and we all know that you will need to restrict crowding.
One of the problems that we have always had is that malls get shutdown and formal retail – since I represent more numbers from the formal retail sector – most of the malls in the country have been shut down. For some reason, whenever there is a problem, the government seems to believe that malls are the first things to be shut. The crowded unstructured markets are not shutdown first, so this is the way we work. That is resulting into the data that we are presenting at RAI also. The requirement going forward is most important and that is what we should be really concentrating on. We know there are going to be restrictions, we know there are going to be problems. Can we allow for home delivery without restrictions?
Secondly, can we get all the frontline employees of this retail businesses, including delivery personnel, vaccinated? Third is the retailers and the mall owners and the landlords are working together to try and see if they can, within the industry, adjust the money so that they can survive. But that is not enough. Is the local government and the state government doing anything to help in easing the burden of things like property taxes, licence fees, etc.? We believe that this can be done and this will help.
Last full year there was no such levy available and that means that although you asked us to shut these stores, we were still asked to make payments of all these taxes, which is a big fixed cost. The last part is the Centre has to work along with the RBI and the banking sector to try and chip in because we will need original money in the hands of retailers to take care of their running costs even if the stores are shut because you still have to pay rents, you have to pay salaries; most important is salaries.
This is the large employment sector; 46 million work in this sector. The second part is about easing the repayment schedules for loans. So, big moratorium again to the stressed sector. Retail should become a stressed sector. We definitely hope it is and in the ECLGS that was announced, retail has not been taken in and this is something that we have been asking for. At least it was there in 2.0, 3.0 does not have it.
