30% retailers may shut shop in 6 months if no govt support: RAI
New Delhi, March 29 (IANS) About 30 per cent of Indian retailers may be out of business in six months time if the government does not provide them support amidst the nation-wide lockdown, Retailers Association of India (RAI) CEO Kumar Rajagopalan said.
Speaking to IANS on Sunday, Rajagoplan also noted that the business has been severely subdued since February, with 50-60 per cent of normal trade last month and nearly no trade in March.
“Outlook looks quite grim, I think if it continues, for example till April 15-20, I think most of the retailers would already be in very deep trouble,” he said.
Rajagopalan said that retailers are accustomed to be paid every day and that is how they pay their expenses. Rent costs about 8 per cent of their earnigs and salaries cost about 7-8 per cent of their earnings.
They also have to pay he suppliers and payments are still pending but there is no income, he said.
“As many as 85 per cent of their expenses are fixed expenses. Unless the government intervenes, I thing the 30 per cent of retailers are going to be out of the market in the next 6 months time,” the RAI CEO said.
Saying that the industry body has written to the government seeking an stimulus package, Rajagopalan told IANS that for retail businesses to sustain, the government needs to take up steps such as subsidising rents and paying wages for the employees.
The retail industry in the country employs around 60 lakh people and according to Rajagopalan, most of them right now are in jeopardy.
“Many of them will get paid this month and possibly even next month but that’s at the cost of the retailer. They don’t have that deep a pocket, that they can withstand, 2-3 months of salary,” he said.
“We have reached out to the government and asked for some kind of subsidy, for rentals, for payment of salary and also some moratorium on loan repayment.”
He said that although the moratorium has been impose on repayment of loan payments, there is no clarity in terms of bills of exchange.
“But in terms of bill of exchanges, that the retailers have taken against suppliers, those are not clear whether we have to pay now or not. If that payment is to be done, we don’t have the money to pay, so most of them would be default,” he said.
About availability of essential goods including food items during the ongoing lockdown, he said the association, in collaboration with local retailers and the authorities is trying to ensure availability of essential products.
He said that issues of price hike and non-availability of products are likely to get sorted in the next three to four days.
The nation-wide lockdown announced by the Prime Minister last Tuesday is scheduled to end on April 14. However, anticipations have been made that the lockdown may be extended, which may come at a greater economic cost.
–IANS
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