Shoppers return to retail hang-outs as third wave recedes
PremiumSeveral companies had expected the impact of the third wave to fizzle out by mid-February
NEW DELHI : Consumer goods companies, retailers, malls and restaurant owners expect a swift recovery from the third wave of the pandemic, with consumers returning to shops and eateries in cities as restrictions are eased.
Mumbai’s Infiniti Mall reported an improvement in footfall over the past two weeks. “We have seen an increase in footfall, and as a result, sales also went up. So I think the phase of concern is slowly getting over, and people are coming out," said Mukesh Kumar, chief executive of Infiniti Mall.
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Kumar, also chairman of the Shopping Centres Association of India, said November-December were “pretty good" for retailers and malls across India.
However, the restrictions enforced at the end of December and January impacted businesses, with Kumar estimating malls losing 30-35% of business since pre-pandemic January 2019.
“There was an initial impact for around 15 days once the cases reported an uptick, but after that, things are stabilizing fast," said Sundeep Chugh, chief executive of coffee chain Costa Coffee.
Chugh said things are getting back to normal fast due to a lower hospitalization rate, limited stress on medical infrastructure and the general view that Omicron is a ‘manageable’ variant.
However, business at bars and nightclubs is still tepid. Sibi Venkataraju, director and co-founder, pH4 Food & Beverages, which runs Toit breweries in Bengaluru and Mumbai, said business is “lukewarm".
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Karnataka was under a weekend curfew but allowed restaurants to open with timing restrictions and a seating cap. Venkataraju said business in Bengaluru was 80-85% of a regular month and is likely to get better by the end of February.
“We are past the third wave. I don’t think that it impacted business as badly. It did put a little bit of a break on potential recovery," said Anuj Poddar, executive director, Bajaj Electricals Ltd.
However, Poddar flagged sluggish underlying consumer demand that he said reflected a broader slump, adding that inflation was possibly eroding household budgets.
Orient Electric Ltd said that it has started getting queries from distributors for the summer season after makers of cooling devices lost out on two consecutive summer months.
“As summer sets in, companies that have already built up inventory will go out and sell because there will be more demand and less supply. We have adequately stocked ourselves. We are carrying good inventory across product mix," said Salil Kappoor, business head, home appliances, Orient Electric.
Last week, Mumbai lifted night restrictions while allowing tourist spots to reopen. It instructed restaurants and theatres to open with 50% capacity and normal timing. Delhi, too, permitted restaurants to open with up to 50% of seating, but a night curfew was left unchanged. The city rolled back weekend curfews late last month.
Sagar Daryani, chief executive and co-founder of Wow! Momo Foods, said business dipped in January, but the impact was less severe than in the preceding two waves. “The third wave didn’t have much of an impact. We were down by 20% year-on-year, which was not that big. Delivery, again, went up from 50% to 60-70% (monthly). Some cities are still observing a night curfew. If you compare it to the first wave, where business was down by 90% and 35-40% in the second wave, this was much better," he said.
Beauty products company L’ Oréal said demand in January fell sharply in cities under mobility restrictions, impacting weddings, but the impact was not as severe as the earlier waves.
“Like with most other segments, the big impact on consumption happened in wave two—that is, April to June last year. We are not seeing such a big shift in consumption during this Omicron wave over the last few months. Obviously, the going-out occasions have reduced," Jain said.
Restrictions induced by the Omicron wave started surfacing in late December, derailing a nascent recovery reported by several consumer goods companies and retailers during the quarter. Retailers in Delhi and Bengaluru were the hardest hit during the third wave.
In Delhi, restaurants, for instance, were shut for dine-in for a part of January, while malls and markets were allowed to open on an odd-even basis.
Several companies expected the impact of the third wave to fizzle out by mid-February.
On Wednesday, India reported 71,365 cases of covid overnight, while the positivity rate fell to 4.5%.
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