Reopened stores see pent-up consumer demand but long term outlook remains uncertain: CII
As lockdown eases, retailers have experienced sales driven by pent-up consumer demand from the earlier, stricter stages of lockdown but spending could slow down unless shoppers continue to have disposable income.
Around 31% of retailers have seen their sales increase by between 25% to 50% as stores begin to reopen, according to the Confederation of Indian Industry’s latest survey, accessed by ET Bureau. The CII surveyed 51 Indian businesses during the first week of ‘Unlock 1.0’ when the majority of retail activity has been allowed to resume.
“Many enterprises are facing demand challenges, and firms in certain sectors in specific regions such as retail, tourism and hospitality continue to be under restrictions regarding opening up,” the CII’s director general Chandrajit Banerjee said, ET Bureau reported. “While usual capacity utilisation is yet some distance away depending on the health factors, we are hopeful that with supply chains functional, output will keep rising in coming months.”
Factors that have contributed to a slower resumption of business activity include higher costs for production and delivery, labour shortages, a lack of public transport for workers, and reduced cash flow, according to the survey. The surveyed businesses said that they are unsure whether the trend of increased consumer spending will continue and hope for measures that will ensure that consumers continue to have money to spend.
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