Arvind Mediratta: ‘Expect shortage of some essentials; seeing decline in footfalls of kirana customers’

Yes, a lot of trucks are stuck in inter-state borders carrying essential items, along with non- essential items in the same vehicle. Otherwise, exclusive essential items trucks are on the move. In some cases, police is stopping the vehicles at the borders and, in some places, the drivers are not reporting on duty due to the scare of the outbreak. Due to these problems we are facing issues in receiving stocks from our supplier partners.

Also, initially we had issues delivering essential supplies to our kirana customers as there was lack of implementation of advisories from central government at the state level across all states. With regular conversations with relevant authorities and timely intervention from the central government, these issues are being ironed out.

Is the company facing any issues due to shortage of labour at its warehouses, stores or within its transport chain?

For the past two days, we are facing some issues to get labours into warehouses of Bengaluru, where attendance is around 50 per cent. Compared to other warehouses in the vicinity, this attendance is good but we are working with our third-party partners to improve the attendance. Since most of the warehouse labour is local, local issues like decisions taken by surrounding villages to close village entries for movement of people, propaganda of new infections reported in nearby towns push the labour back to homes.

There is no issue with transport within METRO supply chain network. All our vehicles, people have secured required permissions to work. Our vehicles are plying from warehouses to stores. The big challenge is in getting trucks from suppliers as there is a huge scarcity of trucks in the market.

Over the last week, we have been struggling with an average attendance of 30-40 per cent at the stores. Given we are in the essential services business, this is well below sub-optimal and there is immense pressure on store staff to manage the inflow of customer. With local transport unavailability during the lockdown, most employees at shop floor level are reliant on public transport and do not have their own vehicles to commute.

Of our total staff strength, 25 per cent is female, who are unable to commute under these circumstances. Furthermore, public transport is not accessible and therefore people who left for their hometown are not able to join back despite their willingness to do so. Across most locations, the police is not accepting company ID cards or company letters granting permission.

In addition to these issues, there are other societal and family pressures that the staff is facing. The staff is highly dependent on local food vendors/hawkers/dhabas post-store working hours. With the current lockdown, these vendors are unavailable and there are no food options present. The company cafeteria and other employees are trying to provide support in this regard. The employees are also facing family and community pressure. Local landlords and locality are not supportive of staff working with essential services.

We have made provisions to ensure our staff is well protected and taken care of. Upon the government’s orders, passes have been given to our staff, so that they are not stopped or harassed by local police authorities.

Has the company faced any supply hit from particular brands for FMCG goods?

We have stock of all the essential food items — rice, dal, atta stock at our stores for next 2 weeks. Having a global presence has given us several learnings. We have been having regular e-meetings with our headquarters in Germany and other European countries where we have operations to understand the consumption and buying patterns in different stages of COVID-19.

As far as food items are concerned, we will eventually witness shortage in pulses and whole spices as these items are largely transported from states like Rajasthan, Gujarat and Madhya Pradesh, as these states were restricting movement of goods earlier. The demand for packaged food products like biscuits and noodles is likely to see a spike but since the production has been hit, there will be a shortage.

For FMCG companies, production units have stopped, there is manpower challenge, coupled with transportation issues.

Furthermore, interpretation of the advisories at the state level is a major problem which is impacting the production for most companies, thereby resulting in the disruption of the entire supply chain. Depot operations of many FMCG companies were constrained severely last week. It is improving gradually. As of now only about 40 per cent of FMCG essential supplies are running smooth, others hit with labour and transport issues. Only about 80-85 per cent of FMCG essential business warehouses are operational now. Major FMCG brands with supply constraints are HUL, ITC, Nestle, Britannia, etc.

Over the last one week, has there been any significant change in the company’s customers turning up to replenish their own stocks?

There is an irregularity in store footfall as a result of several reasons. Initially the footfall increased as customers felt our stores may not stay open and stocks could become an issue. However, in the past one week or so there has been a significant drop as customers are scared to come out of their homes or in some cases they are not even allowed to come out. In some cities, they are not being issued passes which would allow them to buy essential commodities and food items.

There is also a fear of getting harassed by the cops. Footfalls have also dropped because of disruption in store operations. Some stores are allowed to stay open only until noon while some stores are allowed to operate for limited hours. For our stores in Surat, Amritsar, Jalandhar, Lucknow and Meerut, we are only given permission to do home deliveries.

Geographically, METRO stores in which states are the most affected in terms of supply shortage arising from disruption of transport systems?

Our stores located in Nashik, Delhi, Jaipur, Kolkata, Hyderabad, Indore & Ahmedabad have seen disruption due to transport unavailability. However, we are working with our transport partners, picking stocks from FMCG company depots and factories to mitigate the crisis of transport. Our stores had a shortage of pulses and whole spices as the movement of trucks was restricted in Madhya Pradesh, Gujarat and Rajasthan. There was no shortage in the supply of Atta and Oil.

As rice is produced locally in most states, the restriction did not impact the supply, likewise the case with wheat and flour. We also increased the availability of our own brands at stores to cater to the demand.

Disruption also occurred due to sudden increase of freight and transportation costs by transporters and caused the shortage of trucks. The government so far has not reduced the costs of diesel/fuel.