The coronavirus pandemic amid an economic slowdown has hit revenue at Indian retailers selling non essential items like clothes and jewelry by 75% so far and is likely to cause widespread job losses, an industry body said on Monday.
About 40% of the six million employees working in India’s modern, rather than traditional, retail sector could likely lose their jobs in the next four months if the government does not intervene, Kumar Rajgopalan, chief executive, Retailers Association of India (RAI), told Reuters.
“Unless the government provides some relief, revenues will slide by 90% in the next six months,” Rajgopalan said, suggesting moratoriums on the payment of loans, and on the payments of the goods and services tax (GST) and other government duties.
The RAI represents 500,000 stores in India, including brands like V-Mart, Shopper’s Stop, Future Group and Avenue Supermarts, which operates the grocery chain D-Mart.
On Sunday, Future Retail, which owns hypermarket Big Bazaar, said the pandemic, has resulted in a “degrowth of revenue”.
“The expected impact of COVID-19 as of now is hard to ascertain,” it said in a filing to the exchanges on Sunday.
India has registered 341 cases of coronavirus, with seven deaths as of Sunday. Experts have warned the rate of increase in cases in India mirrors those seen in the early stages of outbreaks in other countries, which then went on to see rapid growth.
Gurgaon-based fashion retailer V-Mart Retailer has seen a 30% fall in revenue in the week of March 15-21 due to store closures. The retailer has shut about 116 of its 265 stores as of Saturday.
“Manpower costs are fixed, we are trying to support our staff at least for the next 45 days,” said Lalit Agarwal, managing director,V-Mart Retail.
Aditya Birla Fashion and Retail said on Monday that business had been significantly affected without specifying the impact of the pandemic.
In India, the virus threatens an economy that was already hit by a slowdown in consumption that has bruised demand for everything from cars to clothes to chocolates.
The virus, which originated in China, has infected nearly 200,000 people worldwide, forced countries into lockdown and fear over its impact on global economy has sent world financial markets crumbling.