MSME-dominated retail recovers to 70% of year-ago level; preference to buy from standalone shops up 25%

Ease of Doing Business for MSMEs: MSME-dominated retail sector continues to witness monthly recovery. The sector has scaled up from minus 63 per cent in July vis-à-vis the year-ago period and minus 52 per cent in comparison to August 2019, to around minus 40 per cent in September and minus 30 per cent in October from the year-ago period. “Till October, retail recovery was up by around 70 per cent but I think many of them have adjusted it to Diwali since last year the festival was in October. so festival adjusted recovery is around 80% compared to the same period last year,” Kumar Rajagopalan, CEO, RAI told Financial Express Online.

According to a recent RAI survey, while 75 per cent of customers, down from 76 per cent last year during the festive season, was planning to shop from online channel including shopping websites and apps, the standalone shops as a channel to buy during the season saw an increase from 41 per cent to 66 per cent by customers. On the other hand, customers looking to shop in malls declined from 71 per cent to 37 per cent during the said period, according to the October survey. The association, in order to help restaurants recover, has now written to all state governments in the country to allow the use of open space in malls as additional dining areas for operating restaurants and food courts to tap into the footfall.

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Importantly, the in-mall food & beverages and restaurant businesses have been facing existential crisis due to financial crunch amid seating capacity restriction to only 33 per cent and other challenges even after months of ease of lockdown, the association said on Wednesday. “Food is a very important part of the shopping experience. They are not able to utilize the space fully in the mall due seating restrictions, social distancing, etc. Also, when customers visit malls and see a safe and nice place to eat, there are chances for them to explore other shops and buy from them. It helps everybody,” added Rajagopalan.

“Utilisation of open spaces will also provide malls additional revenue in absence of any mega events that were previously done to attract footfalls. Customers are also looking for activities for leisure or entertainment, something that they have been missing out on for months due to the present situation,” said Sachin Dhanawade, COO Retail & Real Estate, Grauer & Weil (India) Limited. The company operates Growel’s 1O1 Mall in Mumbai.