Curfew restrictions affect retail sales; health, hygiene, instant food purchase: The Tribune India
New Delhi, May 23
Retailers experience continued growth in health and hygiene category products as well as food, personal care and home care products, but discretionary categories like beauty and cosmetics, fashion and clothing have been affected. negatively during the second wave of the pandemic.
Now the focus is renewed on healthy alternatives such as toothpaste and Ayurvedic juices, while instant foods and ready-to-eat snacks with nutritional offerings are also seeing greater penetration.
Also, the value packs are doing well this time around as the smaller Rs 5 and Rs 10 packs saw an increase of up to 20% in categories such as cookies, ketchup and jams, while bulky and premium packaging have been affected by people’s caution. on their disposable income.
In addition, some retailers are also facing the problem of excess inventory in categories such as apparel, fashion and home care categories as they had stocked their inventory in March in anticipation of the coming season after having had a good operating rate in January-March. trimester.
“Spending has fallen in the high and non-core price categories,” METRO Cash & Carry India Managing Director and CEO Arvind Mediratta told PTI.
Future Group, which operates large-format stores such as Big Bazaar and has now mainly turned to the door-to-door model, said sales in the non-essential category declined after the second wave of restrictions.
“Of course, sales in the non-essential category have been hit because you only sell food and other essentials. For this reason, categories such as fashion and home are very affected. We have stocks, but sales have suddenly gone down. The summer sales, which we expected from fashion, are now carried away, ”he added.
Daily staples such as fresh vegetables, staples and legumes; dairy products such as milk; ready-to-cook items such as dosa barters; Packaged foods such as noodles, pasta and pickles sell well at the Big Bazaar, he added.
While Mediratta also points out that the restriction on the timing of stores in the second wave and the lockdown has “an impact on business and becomes a logistical nightmare”.
“As customers start to come in, it’s time to close the stores,” he said.
The challenge has been to receive inventory in stores, record inventory and manage customer visits within these tight 3- to 4-hour timelines in most of the company’s operating states, Mediratta added.
According to Big Bazaar, on the delivery side it doesn’t face any challenges, but there is still a different set of rules from a city perspective and causing confusion.
“We have ramped up our door-to-door deliveries, but of course as a daily retailer you need to continue to understand the changes in the local lockdown and continue to adapt to them. It’s a challenge for us, ”said a spokesperson for the Big Bazaar.
But, as it has now shifted primarily to the door-to-door model, it has not encountered any sales issues so far, he added.
METRO Cash & Carry also records many online orders on its app, but prompt delivery of orders to its kirana customers during those tight times was again a challenge, Mediratta said.
Pinakiranjan Mishra, EY partner and national leader (consumer and retail products), said this time around, retailers are much more prepared than the previous lockdown.
“The supply chain is not a big issue this time around,” he said. According to him, sales in certain categories such as clothing would be a challenge.
When asked if large retail chains might be facing an over-storage issue due to increased inventory, Mishra said, “It is possible that they have excess inventory and that it would take them longer to liquidate. Earlier this month, Avenue Supermarts Ltd, which owns and operates the D-Mart retail chain, said it was having a “serious and negative impact” on its revenues due to “significant disruptions” to its store operations. from March 2021.
In addition, D-Mart might also face a challenge of “excess inventory” as with the threat of a downturn from the pandemic and surging sales over the past two quarters, it had been optimistic about planning.
“We currently continue to receive a steady supply from our suppliers. However, this time we may have a problem with excess stock. A bigger problem than the first wave, ”Avenue Supermarts said in a press release on May 8.
The decline in the threat of the pandemic and the resulting surge in sales in the third quarter and most of the fourth quarter, followed by the summer season and back to school, prompted us to plan with more optimism. .
“This could have a longer term impact on our inventory-to-sales ratio, as we may take longer to liquidate excess inventory,” he added.
This time around, several state governments imposed lockdown-like restrictions in April and are now extending through the end of May in their efforts to control the spread of the coronavirus. – PTI