Covid-19 forces retailers to reassess volume-driven business strategy

Crowd management policy critical; associations turn to government

Social distancing will now acquire significant importance in the retail manuals of all companies, said apex industry bodies on Monday, implying the focus will move away from a ‘volume-driven business strategy’ that has underpinned organised retail for over two decades now.

The industry bodies including the Retailers Association of India (RAI), Clothing Manufacturers Association of India (CMAI) and National Restaurant Association of India (NRAI) had come together in a virtual conference to discuss the way forward for retail in the aftermath of the coronavirus (Covid-19) pandemic.

From getting footfalls into stores and ensuring maximum sales per square foot, the emphasis will increasingly be on crowd management and ensuring an effective queuing policy in place during business, Kumar Rajagopalan, chief executive officer, RAI, said.

RAI has already indicated that 25 per cent of retailers will exit the business if the government does not provide relief measures to the sector, which employs nearly 6 million people.
 

“It is clear that retailers will now have to re-look their scale of operations and will have to see how crowds can be managed better at their stores,” said Rahul Mehta, president, CMAI. The statement acquires importance given the growing number of Covid-19 cases in India and the stress it is putting on the health care system in the country.

Local authorities have also become stringent in implementing lockdown and containment rules, forcing retailers, especially grocery owners, who are currently open, to assign time slots to shoppers, maintain safe distance between staff and people and ensure only limited consumers get entry into stores, with everyone donning masks and wearing gloves if possible.

Anurag Katriar, president, NRAI, said retailers would have to communicate hygiene and sanitisation measures to consumers, who remain nervous about getting into stores and enclosed spaces following the health crisis.

While the industry bodies said retailers would have to formulate individual crowd management policies for their outlets, sources in the know said the associations were also turning to the government for direction.

Currently, most organised grocery retailers such as Big Bazaar and DMart have rigorous sanitisation measures in place across high-contact points within stores, including cash counters, racks and trolleys.

Temperature checks are also carried out at entry and exit points of stores to ensure hygiene standards are maintained, apart from home deliveries being carried out to ensure convenience and easy availability of groceries.

Restaurants such as Domino’s and McDonald’s have begun ‘contactless delivery’ to ensure hygiene standards are maintained. However, Mehta said this might not be enough as convincing consumers wary of catching the virus may take time.

The industry bodies have made representations to the government asking for deferment of taxes, easy working capital loans, wage subsidies and a moratorium on loans as part of a comprehensive relief package.

“The industry is in for tough times and the challenge is to tide over the April-June period first before we can look ahead towards recovery,” Katriar said. The industry bodies said it would take between 9 and 12 months for most retailers to recover from the crisis, though larger companies could turn around in six months.