Third wave curbs upset discretionary cart at stores

Rising Covid-19 cases and stringent state-level curbs have hit offline sales of products across discretionary categories such as personal care, beauty, furniture, consumer durables, sports goods, jewellery, footwear and apparel.

Retailers selling discretionary products said their businesses have declined up to 60% in the last two weeks and there is an uncertainty about how sales will pan out this month and even the next as the third wave has prompted several states to impose restrictions including night curfews and weekend curfews.

Company executives said online sales are unlikely to offset the decline in sales of non-essential categories in physical stores as consumer confidence is down. "There is also a fear factor of lockdown and its resultant impact on salaries and earnings," said Nilesh Gupta, director at electronics retail chain Vijay Sales. "Consumers also seem to be saving money for medical expenses."


Financial services group Nomura in a report on Monday said, "With Covid-19 spreading rapidly in India, voluntary pullbacks on activity and state-wide restrictions are starting to bite the economy as evidenced by a fall in mobility."

Premium cosmetics maker Lotus Herbals' sales through physical stores in metros are down by 25-40% year-on-year in the last two weeks, its joint managing director Nitin Passi said. "This is a really tough time again for general trade," he said.

Footwear and apparel brand Woodland's sales are down by almost 60% in the last fortnight with the peak season lost due to curbs like weekend curfew, shortened store operating hours and lower footfalls, said Harkirat Singh, managing director of Aero Club that owns Woodland.

'More Challenges for Standalone Shops' | page 6
A senior executive with one of the largest apparel retail chains said sales are down by 15-20% year on year in the last 15 days despite the end-of-season discounting. "Footfalls are badly affected," he said on condition of anonymity. "While there is a surge in ecommerce, it is not able to compensate for the loss in store business."

Sales of standalone neighbourhood mobile phone stores, too, have dropped 45-50% across the country in the last two weeks, according to mobile phone retail industry body All India Mobile Retailers Association.

In markets where cases or restrictions are high such as Delhi-NCR, Mumbai and Kolkata, the drop is almost 60-70%, said Arvinder Khurana, president of the association. "Consumers are already afraid to step out, and in markets like Delhi we can operate for three days a week at most due to restrictions. The challenges are much more for standalone stores," he said.

Retailers said sales started falling in the last week of December.

"The retail business was on a steady growth trajectory during most of December; however, the pace of growth was seen dropping off significantly towards the last week of December due to fresh sets of curbs imposed in most parts of the country," said Kumar Rajagopalan, chief of Retailers Association of India (RAI).

Sales of categories like beauty, wellness, personal care, furniture and furnishings have dropped below pre-pandemic levels in December, as per latest RAI data based on offline sales and what retailers have uploaded on their respective sales database.