At a webinar hosted by Retailers Association of India (RAI) and Trust for Retailers and Retail Associates of India (TRRAIN) on Monday – in which top industry associations Retailers Association of India (RAI), National Restaurant Association of India (NRAI) and The Clothing Manufacturers Association of India (CMAI) – participated, it was said that clothing, dining out and grocery retail industry will take about a year to recover.
Predicting a bleak immediate future, the top bosses of RAI, CMAI and NRAI say they see a 25-30 percent impact on business with multiplier effect on subsidiary industries and lasting job losses.
The retail industry BS Nagesh, founder of TRRAIN, said, will see revenue drops anywhere between 30-35 percent and the biggest challenge that retailers have in hand is to run their business with 100 percent employees despite the huge dip in revenue.
“While apparel manufacturing and sales will be severely hit because consumers only want essentials, subsidiary fashion retail industries such as zips and tags will also be adversely affected. We cannot expect fresh production to start before the July-August period,” said Rahul Mehta, chief mentor of CMAI.
Bleak Year Ahead
“It may take six months for the larger companies to revive and 12 months for the smaller retailers. Retailers are sitting with six months of unsold inventory,” said Kumar Rajagopalan, CEO of RAI.
“People will not step into bars and pubs as they are typically crowded with social distancing becoming the new normal. Even discretionary spend will reduce,” said Anurag Katriar, president of NRAI.
The recovery period after the lockdown could see a significant change in business approach, as per Katriar. He said that the restaurant industry will be in for a tough time and that restaurants will have to revamp their communication approach to reassure customers of safety and hygiene.
“In these hard times, consumers have to become part of the value chain. Once we go into revival stage, PM Modi should urge Indians to come together and celebrate the end of the crisis by spending even on discretionary products,” Nagesh said.
He pointed out that consumers and businesses are no longer on opposite sides of the table. Consumers are now a part of the value chain and have an important role to play in reviving the economy.
While RAI has been pitching for a comprehensive stimulus from the government to prevent job losses, the heads of all three associations have urged the government to offer them immediate help with working capital, extended tax holidays and moratorium.
“Over 80 percent of the garment industry comprises of MSMEs which don’t have the resources to pay salaries to their employees. A wage subsidy from the government will help them to retain their employees,” said Rahul Mehta.