With the recent layoffs at a city-based mall, the retail sector in Ahmedabad and in Gujarat overall, has begun a reality check. According to industry players, retail sector is currently witnessing reduction in sales by 30 per cent, apart from layoffs.
The industry is facing a reduction in footfalls by 40 per cent and sales by 30 per cent, says Ashish Shah, managing director of Aarvee Denims and Exports Limited. "Many retailers outsource their products, especially garments where the order books have been down.
Also, the footfalls have fallen drastically in Gujarat, especially in Ahmedabad. This has resulted in a reduction in sales by 30 per cent. Moreover, there have been layoffs happening to some extent as well," adds Shah. Last year, the denim major launched its retail brand 'Dextase' which is witnessing a decline in footfalls as of now.
However, some are witnessing a steady growth in retail markets of Gujarat. According to Rajan Malhotra, chief executive officer of Future group's Big Bazaar, "Gujarat has been a steady market for us, neither going up or moving downwards. In fact, apart from the one store in Ahmedabad which was converted into a Brand Factory outlet, all our existing stores in Gujarat are doing reasonably well, even during recession."
Talking about the current trend in the retail market, Malhotra says that most of the products have shown an upward market trend. "The worst is behind us and most categories have started showing strong trends now. Among them are fashion and merchandise as against food, which had been strong throughout. As for categories like mobiles and furniture, there is a still a lull but their markets have also started showing an upward trend. As for recruitments, they happen as and when new stores open. We are planning to expand our retail presence by opening two new stores in Sangli and Hyderabad soon, besides four stores in the next month," he says.
Experts opine that the while on one hand some retailers are facing a tough time in Gujarat, there have been others who are still on a hiring spree. "The retail scenario has been bad this season since the number of stores have not gone up. Several retailers have shelved lot of their plans as well. Yet, there have been others who have been hiring for the front end which is a good sign," points out Piyush Sinha, faculty member at Indian Institute of Management, Ahmedabad (IIM-A).
"This is a short term correction which was anyways expected in the retail sector. While there has been a decline in growth by 30 per cent in the industry in Gujarat, it will take a few months before the scenario begins to change," says Amit Vasavda, former mentor at the Ahmedabad Retail Academy (ART) and retail management expert.
