NEW DELHI : Anew wave of city- and state-level lockdowns to curb the spread of covid-19 could reverse the gains made in June, executives at consumer companies said.
On Tuesday, Bihar announced a total lockdown from 16 to 31 July. Bengaluru went into a lockdown late Tuesday evening till 22 July. In Maharashtra, local civic bodies have extended lockdown restrictions in Pune, Pimpri-Chinchwad, Aurangabad, Solapur, Thane, Kalyan-Dombivali, Bhiwandi-Nizampur and Navi Mumbai. In Uttar Pradesh, offices and markets will be shut on weekends, at least for the rest of July.
The latest shutdowns, against the backdrop of India’s case count crossing 900,000, are likely to disrupt the movement of goods and store operations, apart from crushing consumer confidence.
In V-Mart’s office on Tuesday evening, teams were on calls to discuss the value retailer’s plans for the month as several of its core markets reported short lockdowns. The retailer that sells everything from low-priced apparel to footwear runs over 265 stores in the country, 60 of them in Bihar.
“Most of our core markets are coming back to lockdown, Bihar, UP on weekends, and parts of Odisha. Things are not good; they are worsening," said Lalit Agarwal, chairman and managing director, V-Mart Retail.
Agarwal said while sales in June were 40-45% less compared to a year ago, they were “better than expected".
The new lockdowns could push the retailer to renegotiate rents. “While we won’t shut stores, we will discuss with landlords and employees what are the processes we will take," he said.
Electronics retailer Vijay Sales, which clocked 70-75% of sales in compared to a year ago, also fears supply shortage of electronics as movement, especially from some industrial locations, come under restrictions, said Nilesh Gupta, managing director. “Things started moving in the correct direction, and now lockdowns have come again; it will now again stop business. But this is inevitable," he said over the phone.
India’s top retailers had started seeing business revive in June as stores and malls began operations, with riders.
Anuj Poddar, executive director, Bajaj Electricals Ltd corroborated Gupta’s views. “In July, we thought the demand-side trend of June would continue but now we again are starting to experience lockdowns. That includes some of the key urban areas like the Mumbai MMR region, Bengaluru, Pune, Aurangabad, Patna, Guwahati, etc. That may dampen demand for goods as well as impact supplies. I was not expecting to see supply-side problems, but a lockdown means warehouses, factories and logistics are getting disrupted again now," he said.
Jewellery retailer Tanishq said it is closely monitoring the local and short shutdowns across the country. “While store walk-ins obviously get adversely impacted in those cities, we are also seeing an increase in online engagement from these centres. Further, we are well diversified across all geographies and town classes with a presence in over 210 towns; our demand gets aggregated across many geographies," said Ajoy Chawla, chief executive officer, jewellery, Titan.
Amitabh Taneja, chairman, Shopping Centres Association of India, said retailers and mall developers concur with the government’s concern to contain the spread of the virus. However, “frequent lockdown measures will end up creating greater economic impact than what the first lockdown did. It will put the entire business cycle in a spin leading to logistical and supply chain issues, impacting business continuity."
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