From Shoppers Stop and Raymond to small retailers ⁠— thousands of people have lost their jobs

• India’s retail industry opened doors on June 8 but it’s still struggling with getting consumers to its shops.
• Shoppers Stop was the latest to lay off over 1100 employees.
• A survey from the Retailers Association of India said that a majority 67% of the consumers surveyed showed little to no excitement in shopping post the lockdown.

India’s retail industry opened doors on June 8 but it’s still struggling with getting consumers to its shops. As sales continue to slide and the crisis worsens, the retail industry is also seeing massive layoffs.

Shoppers Stop was the latest to lay off over 1100 employees. “With the declining business, layoffs are unfortunately inevitable. With a limitation on adding new stores in this situation, the size of our business is effectively reduced and, therefore, unfortunately we need to adjust our cost base in such times,” a spokesperson from the company told Economic Times.

Previously, apparel company Raymond had fired hundreds of employees because of a rising debt and the increasing pressure on the business due to the coronavirus pandemic.

The debt-ridden Future Group had already laid off hundreds of employees in January 2020, as the consumer spending hit an all time low while the company struggled with its debts.

Across unorganised retail, the number of job losses could be much much more. “Over 80% of the garment industry comprises MSMEs which don't have the resources to pay salaries to their employees,” Rahul Mehta, President of Clothing Manufacturers Association of India had said earlier.

A survey by Retailers Association of India (RAI) showed that 25% of small retailers said they needed capital to survive post covid, while 50% believed that they would have to shut shop. "If this happens, there will be a huge impact on jobs," said Kumar Rajagopalan, CEO of RAI.

India's retail sector accounts for 8% of employment in the country and was valued at $792 billion in 2018, according to CARE Ratings.

A survey by MyHiringClub.com said that the retail and FMCG sector has the highest percentage of layoffs at 49%. “Industries like aviation, hospitality, travel, FMCG, retail, automobile & manufacturing will suffer more and will take longer to recover due to a halt in spending. Job cuts, salary reduction and business downfall are major reasons for spending less in the current situation,” said Rajesh Kumar, CEO, MyHiringClub.com & Sarkari-Naukri.info.

Earlier, the credit rating agency CARE ratings gave the retail sector in India a ‘Negative’ outlook. “The impact on demand, which is expected to remain muted at least for the next three or four quarters, will be more in case of players with presence in non-essential items and luxury segments,” said the ratings agency in its report.

A survey from RAI said that a majority 67% of the consumers surveyed showed little to no excitement in shopping post the lockdown. Moreover, 78% of the respondents said their shopping expenditure would decrease.

The weak consumer intent to spend and the fear of the virus only further hurts the retail industry, which was completely shut during lockdown.

“During the span of 60 days of national lockdown, the domestic trade has lost a business to the tune of about ₹ 9 lakh crore, causing a revenue loss of about ₹1.5 lakh crore to both the central and state governments on account of GST,” said Confederation of All India Traders Secretary General Praveen Khandelwal.

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