Amid third wave of Covid-19, mom & pop stores stock up on essentials

But modern trade in wait-and-watch mode; business as usual for e-commerce players

With India caught in a third wave maelstrom, mom-and-pop stores have started stocking up on essentials like edible oil, sugar, and salt. Modern trade stores, on the other hand, are in a wait-and-watch mode. They don't anticipate stock supply being hamstrung by logistic issues yet.

Consumer durables retailers have reduced buying from companies, seeing that discretionary demand has been impacted with people choosing to stay indoors. However, demand has moved online for television panels.

Apparel retailers are still lying low to see how the situation pans out on the ground.

Neighbourhood kirana stores have increased their inventory build-up by another week, with demand growing for edible oil, sugar, and salt.

Prem Kumar, chief executive officer (CEO), SnapBizz, a digital solutions provider to kiranas across the country, told Business Standard, “Retailers in our network have increased stocking up on inventory by a week since they don’t want to run out of stocks with increase in demand.” He also said that demand for edible oil has increased 20-22 per cent; for salt and sugar 7 per cent.

Kumar said that retailers are selling more home-grown brands as they are cheaper and households have reduced spending and buying affordable alternatives.

However, this is not the case with big-box retail chain Spencer’s Retail and its subsidiary Nature’s Basket. The companies have not increased buying or stocking up on higher levels of inventory, given that supply chains are not disrupted yet.

“Fast-moving consumer goods companies don’t have issues with supply-chain logistics and consumers have also not resorted to panic buying. Supply remained uninterrupted in the earlier waves,” said Devendra Chawla, CEO, Spencer’s Retail and Nature’s Basket.

In apparel retail, Lifestyle, a retail fashion chain, is yet to take stock of the situation and will do so by the end of the month. “We have seen an impact on demand causing an inventory pile-up due to weekend lockdowns in Delhi, Haryana, Karnataka, and Sunday lockdown in Chennai, but we will take a decision by the end of the month. We will see how it plays out,” said Devarajan Iyer, CEO, Lifestyle.

In consumer durables, Vijay Sales said it had planned to reduce buying, but since the situation is under control it will remain watchful.

“The situation seems to be under control. We expect people to visit the stores again as this wave passes. This time, the recovery is expected to be much quicker, compared to the second wave,” said Nilesh Gupta, managing director, Vijay Sales.

However, Godrej Appliances Business Head and Executive Vice-President Kamal Nandi said that demand has been on a slope since October and the festival season did not go well. "Retailers had reduced stocking up since October," said Nandi. However, he added that retailers don't have stocks piled up.

But it looks like it's business as usual for the e-commerce players.

Avneet Singh Marwah, CEO of Super Plastronics, the branding licence for international brands like Kodak, Thomson, Blaupunkt, and Westinghouse, said that offline retailers have reduced buying by 30 per cent, but e-commerce companies have increased their buying.

“Earlier 55-60 per cent of our sales were through the e-commerce channel, which has now changed to 75 per cent. E-commerce companies are stocking up on inventory ahead of the Republic Day sale,” said Marwah.