While several phases of unlocking the economy have helped to free up trade to an extent, it has had only limited impact on improving the market sentiments. Ground level check among local store owners reveals that, demand continues to be feeble.
According to Goan retailers demand is decreased not only for consumer essentials but even for non-essentials like clothes, shoes, bags, luxury, etc. Consumers appear to be exhausted by the pandemic hardships of day-to-day living, feel retailers. They add that, the new normal of masks, social distancing, giving up public celebrations, etc, is not really conducive to spending.
The poor consumer sentiments is reflected in the reduced footfalls in local malls, superstores and bagayatdar’s with stakeholders in the state’s organised retail industry revealing that, business continues to be lackluster due to the economic fallout of the pandemic.
Large retailer, Kirit Maganlal, chairman, Magsons chain of supermarkets says that, Goa’s organised retail industry is yet to come back to its original pre-COVID state. “Retail as such is growing but that’s because there are hundreds of small shops, roadside vendors who have mushroomed. However as far as organised retail is concerned people today are still not willing to venture out to enclosed spaces,” says Maganlal.
He reveals that, the loss of business is by almost 30-40 per cent mainly because customers are not willing to come out and shop. “I would say that, the retail sector as of now is recovered 75 per cent of its pre-COVID business but the industry works on very thin margin so even 75 per cent recovery is not enough,” discloses Maganlal.
Goa’s retail industry like its counterparts in other states is vast. It comprises several business segments such as groceries, pharmacies, clothing, appliances, furniture, luxury goods, etc. Dean Menezes ,CEO, CMM Group, having presence in the retail sector along with logistics and warehousing industries, points out that, each segment in retail is affected differently.
Menezes estimates the decline in business is at 20 per cent for modern superstores or mini-markets dealing in groceries, 50 per cent drop in revenues for apparel retail and as much as 70 per cent decrease for electrical appliances. He feels that, groceries demand is remained unaffected by the pandemic but there is the change in the purchase channel.
“Large mini-markets and modern super markets are down but smaller stores are doing better. People are shopping closer to home. Overall the market is flat,” says Menezes .
In the initial months of the pandemic lockdown the problems of Goan retail industry were on the supply side as movement of good was restricted in the state. Popular grocery items were unavailable in the market for small as well as large retailers. Presently the issues on the supply side have been sorted out to a large extent, according to retailers.
On the other hand the consumption basket is changed. Maganlal says that the share of the pie has become thinner for large retailers as multiple, small players have sprung up. “The cost is remained the same for organised retailers especially those who have outlets in malls. There has been no reduction in mall rentals,” he says.
Pandemic is changed the way residents shop and it is reflected in the large number of roadside vendors, for instance the vegetable vendors sitting along the Taleigao roads. “It is good for them as ultimately they earn a livelihood but it is having an adverse impact on organised retail,” points out Maganlal. He feels that, recovery from the pandemic crisis is still way off for Goan large retailers.
According to a research report prepared by India Rating and Research, the apparel retail industry is expected to witness a 40-45 per cent decrease in revenues during 2020-21. The report expects demand to recover in the festive season if COVID-19 related fears subside. Yet the rising number of positive cases indicates a long stay for the pandemic. Under these circumstances what can Goan retailers do to cope, other than wait for the pandemic to pass?
Menezes believes that waiting for the crisis to pass is not going to be easy as one needs to have the sustaining capacity. He says that, large store owners will have to reduce their overall cost of operation and make themselves amenable to home deliveries. “D-mart in Mumbai is doing extremely well because it started home deliveries while similar chain outlets in interior Maharashtra are suffering as they have not adaprted to the new model,” says Menezes.
All in all Goan retailers feels that, business is going to be very challenging in the remaining months of 2020-21, or until the pandemic continues. They say that, the cost of operating is not getting covered. “The smaller players are thriving but bigger stores are feeling the pinch,” according to players in retail.
“The current environment in COVID is not changed. Positive cases are rising by the day and it all depends on the chances of getting a vaccine soon. The recovery in businesses also depends on government policies. There has to be alignment between the state and center on handling the unlocking measures. The MHA guidelines on unlock say one thing and the state says something else. Not only is there difference in interpretation between the state and center but also difference between how north and south Goa views the guidelines,” adds Maganlal.
The Federation of Indian Chambers of Commerce and Industry (FICCI) has recently said that, the adverse impact of the pandemic on the retail industry is going to be long term, viz. much after the coronavirus infection disappears.
