After witnessing a sharp decline in footfalls and sales with the discontinuation of old Rs 500 and Rs 1,000 notes, the retail sector is gradually finding its feet.
Mahesh M, CEO of Ishanya and Housl!fe, said that initially the retail industry saw a slump due to the cash contraction in the economy. “For us, the immediate impact in two weeks post the announcement of demonetisation was a 40 per cent drop in footfall.
But the situation has stabilised since and we expecting things to be back to normal by December end. In terms of sales, as compared to the festive month of October, dip in November sales was steeper,” he said. He added that though demonetisation is a strong step but it is in the right direction and in the long-run, once the flow of new currency regularises, it will definitely boost purchasing power on one hand and organised retail on another.
Rajiv Malla, Director of Phoenix Marketcity, said demonetisation is a positive move with long-term benefits and its impact on retail sector will be short term. “Post the currency ban, we have witnessed a decline of around five per cent in footfall and around eight per cent in overall sales.
However, things have been getting back to normal lately with the circulation of newer currency notes,” he said, while adding that the impact will be less on organised sectors compared to unorganised retailing segments as the former offers more payment options to consumers like e-wallet, cards and other digital payment modes. “We anticipate that the Indian retail industry would be robust and growth-oriented in the long run,” he said. Derick Michael, COO of Amanora Mall, said the cash crunch has not really affected the turnout in malls.
Since October is a festive month the footfall is obviously more compared to November. He said November turnout was still better than September. “November saw lesser sales than the festive month of October for obvious reasons. Demonetisation affected the mall revenue in expenses like parking changes. But since most of our customers anyways used cashless modes, transactions through plastic money and e-wallet accounted for at least 30-40 per cent sales,” said Michael.
Ahead of Christmas and New Year, malls are expecting a substantial profit in business and are seen gearing up with attractive offers. “We hope that by then (December end) smaller denominations would be circulated by the government which would certainly encourage shopping. Besides, we have planned many exciting events such as the India Superbike Festival, Flea Fly Season 2 and the Christmas Bazaar plus the End of Season Sale to drive in more footfalls and thus more transactions,” said Michael.
Similarly, Mahesh said that Christmas and New Year sales are expected to bring in more cheer, encouraging customers to venture out and invest more. To help ease the pressure of cash crunch on customers and, more importantly, help them have more cash in hand for typical convenience goods, we are coming up with a consumer-friendly centralised scheme to offer finance options like zero downpayment EMI schemes cutting across all participating brands at Ishanya, he said.