Consumption sentiment has turned shaky over the past week as many states have imposed restrictions to contain the resurgence in Covid-19 cases, said industry executives across the retail, fast-moving consumer goods (FMCG), consumer durables and dining out sectors.Consumption and footfalls have declined 30-50 per cent in impacted states, they said, denting business on the eve of Holi and ahead of Easter and Navratri in April, considered auspicious shopping windows.Refrigerator and washing machine maker Godrej Appliances business head Kamal Nandi said business was good in the first half of March but started slowing thereafter in some markets due to curbs.“While the industry will still clock growth over last March in these markets due to great initial sales, retailers are apprehensive to stock up products fearing the outcome in states like Maharashtra, Punjab and Madhya Pradesh,” said Nandi, who also heads the Consumer Electronics and Appliances Manufacturers Association.Delhi, Maharashtra, Punjab, Kerala, Madhya Pradesh, Gujarat and Rajasthan are among the big markets that have announced restrictions until April 15 at least amid rising cases. On Saturday, Delhi capped the number of guests attending marriages and other events, having added 800 red zones in the past six days. Maharashtra has banned social gatherings until April 15 besides imposing a night curfew, which means hotels and pubs shutting at 8 pm.Punjab, Kerala, Indore, Gujarat, Rajasthan and Odisha have also announced restrictions.81741572This has been a setback to the recovery in discretionary and impulse categories that had picked up in November amid the festive season, coinciding with declining Covid-19 cases and positive consumer sentiment. “Over the last five days, we have seen demand being impacted specially in Maharashtra, Punjab and Kerala,” said Dabur chief executive Mohit Malhotra. “Buying sentiment has turned shaky in impacted markets.”The worst affected are stores inside malls. “Lots of restrictions like night curfew or closure of stores have led to footfalls declining steeply,” said Sundeep Chugh, Benetton India CEO.‘Sharp Reversal in Dine-Out Trend’“Then there is random testing happening, so the mobility of the consumers gets restricted,” said Chugh. Footfalls have dropped drastically, declining as much 50 per cent in the past week, specifically in western markets, he said.81741580Mukesh Kumar, chief executive at Infiniti Malls, said directives such as paid testing counters outside malls in Mumbai have resulted in footfalls being impacted by at least 20-25 per cent week on week.“People have to wait 15 minutes to half-an-hour, and they have to pay to get tested,” he said. “Who is going to wait for so long? They are not testing at railway or metro stations — why discriminate against malls?”Pawan Khandelwal, chief executive at premium department store chain Iconic, said week-on-week numbers have declined 25-30 per cent.Dining out, which had been seeing a steady recovery with sales reaching nearly 70 per cent of pre-Covid levels, is seeing a sharp reversal too, executives said.“The opportunity to do business has been severely curtailed with curfews and other curbs. Reduced timings and Covid-test requirements at malls are directly impacting dining out,” said Anurag Katriar, president of the National Restaurant Association of India (NRAI), which represents over 500,000 restaurants and bars in India.Overall business robustBrands said overall business is yet to feel the heat since ecommerce has surged in these markets, compensating for the loss, and other geographies were doing well.E-grocer Grofers said weekly sales have increased by about 30 per cent in markets such as Mumbai and Pune. A spokesperson said demand has swelled again for categories such as ready-to-eat and ready-to-cook by 80 per cent, frozen foods by 500 per cent, packaged milk and milk products by 150 per cent and hygiene and disinfectants by 50-100 per cent. Sales through online marketplaces such as Flipkart and Amazon have also surged sequentially in the past 7-10 days in the states with restrictions.Leading smartphone maker Realme India CEO Madhav Sheth said offline sales have dropped by about 10 per cent in states experiencing the second Covid wave.“There is chaos in offline trade right now in these states and people are getting panicky with offline business dipping in last 7-10 days,” he said. “There is an online sales surge, but it’s too early to say how the situation will eventually pan out.”The new wave of infections and restrictions will impact sales over the next few weeks, said Sanjeev Mohanty, managing director, South Asia, Middle East and North Africa, Levi Strauss & Co.“However, there is no negative impact on brick-and-mortar stores at an overall level as there are other strong pockets in the country to compensate,” he said. “But it takes no time for things to go completely sideways as we saw in other parts of the world.”
from Economic Times https://ift.tt/3cu8vji
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