Thread by @marginalideas

Impact of lockdown on Retail sector -

Lockdown across the country has resulted in non-grocery retail businesses coming to a complete halt. Traditional retail has come to a halt except for stores stocking essentials.

1/n

Estimates for losses ranges from USD 0.5-2 billion dollars due to closure of malls, stores and factory production. Job losses imminent 15 lakh modern retail stores in India employing 60 lakh people; several small players may have to shut shop.

2/n

There are significant delays in delivering online orders, while being open for essentials during lockdown due to lack of complete clarity on definition of “essentials” and different interpretations by local bodies and authorities initial 2 days of lockdown witnessed...

3/n

.. significant issues with local authorities and cancellation of orders; 80 85% network has been open in the last 3 days of lockdown.

Other key issues are - Warehouses closures (for Big Basket, Grofers etc.), supply chain and transportation issues adding complexity ..

4/n

..(movement of essential items across state borders has resumed). Shortage of delivery staff for both, ecomm & offline players offering delivery options, due to return of migrant workers to villages – Players are paying 25% more than the usual rates and still facing issues

5/n

COD options have been halted for better liquidity management. National & Local supermarkets are tying up with e commerce players with bandwidth to augment delivery personnel

ITC have tied up with Jubilant to deliver essentials and we can see similar tie ups in near future

6/n

Good thing is that most large retailers have not planned lay offs or cuts in the near term; smaller players may witness salary delays /cuts for senior management based on their liquidity position. Some are increasing allowances to the tune of Rs. 600/day to manage volumes.

7/n

Force Majeure seems to have been invoked by larger players – Delayed rents and lawsuits will be dragged in the industry, given the laws are not very clear here. Retail association has also asked for relief packages.

8/n

Overall, it can turn into a make or break for those doing essential services. This could be a great opportunity for start-ups such as gourmetgarden.in to scale up – they provide amazing fresh vegetables and fruits in Bangalore.

9/n

Impact is varied, but FMCG players with emphasis on basics will ride this out. Premium strategy will suffer

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