The second wave of Covid-19 in India is now hitting the retail sector hard as more and more states impose lockdowns to contain the spiraling rate of new coronavirus cases, while some are tightening earlier restrictions.
Traders’ body the Confederation of All India Traders said the 80 million traders in the country suffered business losses of 6.25 trillion rupees (US$85 billion) in April as various state governments enforced weekend curfews and lockdowns, the Financial Express reported.
The cumulative loss of revenue to the government is about 750 billion rupees ($9.56 billion), it added. The confederation sourced data from more than 40,000 associations under its umbrella.
Providing further details, the traders’ body said that of the total business losses of 6.25 trillion rupees, retailers incurred losses of 4.25 trillion rupees ($58 billion), while wholesalers suffered losses of 2 trillion rupees ($27.3 billion).
However, despite these setbacks, the confederation favors stringent measures to contain the spread of Covid-19, which is breaking all past records. In a letter to Prime Minister Narendra Modi, the traders’ body called for a nationwide lockdown and urged the government to set up a ‘Pediatric Task Force’ to counter the third wave that could affect children.
Among retailers, the worst hit were those selling non-essentials, other than food items and medicine, as the ongoing restrictions in various states brought their businesses to a standstill. Retailers expect this trend to continue for a long period as the pandemic will force consumers to save more for unexpected medical expenses and avoid shopping for non-essentials.
Unlike last year, this time there are fewer consumers buying products online as the higher death toll during the second wave has dampened consumer sentiment. Also, various state governments including Maharashtra, Delhi, Chhattisgarh and Rajasthan have banned e-commerce firms from delivering ‘non-essential’ goods during the lockdowns.
They have been allowed to deliver only food, medicine and medical equipment.
Stores located inside malls across India were bearing the brunt as most state governments ordered closures of malls while announcing weekend curfews and lockdowns. The Shopping Centres Association of India, an industry body that represents malls in the country, said last month that footfalls had dropped by 75% due to local curbs.
The association is reportedly in talks with the government to take steps to mitigate the woes of mall promoters. They include options like relief on property tax, a moratorium on loans and payment deferments from power companies, among other things.
Mall promoters are looking to reduce costs, including layoffs, to stay afloat. Unlike last year, this time they are also not keen on extending rental waivers to retain retailers in 2020.
Meanwhile, two southern states, Kerala and Tamil Nadu, announced lockdowns after a sharp rise in Covid-19 cases. Neighboring Karnataka, Andhra Pradesh and Telangana have already imposed restrictions on the movement of people as the pandemic tightens its grip over south India.
Even some states in northeastern India, which was relatively free from the second wave, are now imposing restrictions following a rise in cases. Mizoram and Sikkim have imposed a week-long curb to rein in the pandemic.
India’s Covid-19 caseload crossed 22.2 million and last week daily cases crossed 400,000 five times and the daily death toll crossed 4,000 twice. According to official data, more than 242,000 people have lost their lives since the pandemic began more than one year ago.