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20-25 per cent of TN retailers may be out of business post lockdown, says traders' body

Banks have done 'sweet nothing' in this situation to help retailers in the country, said Kumar Rajagopalan, chief executive officer of the Retailers Association of India (RAI)

Published: 06th May 2020 03:33 PM  |   Last Updated: 06th May 2020 03:33 PM   |  A+A-

Before the lockdown, Ranganathan Street was jam packed with retail outlets as well as pavement shops. EPS

By Express News Service

CHENNAI: As many as 20-25 per cent of retailers in Tamil Nadu may be out of business or will need drastic financial infusion to stay afloat in the post-lockdown period, according to Kumar Rajagopalan, chief executive officer of the Retailers Association of India (RAI).

"The state retail, which is worth $77 billion and employs around five to six lakh people, had already been hit prior to the lockdown with business dropping to 20-25 per cent by the end of February 2020. With the onset of the COVID-19 crisis in the past one-and-a-half months, retail trade has been reduced further to 15 per cent," Rajagopalan said.

"For retailers of non-essential items, business has reduced by 100 per cent. These include apparel, jewellery, shoes, consumer electronics, durables, IT and telephones among others. Even stores selling essential goods that have been allowed to remain open during the lockdown are suffering losses as they aren’t allowed to sell other general merchandise, which would otherwise bring them higher margins," he said.

Apparel businesses could face revenue losses of up to 40 per cent and many small and medium players in the apparel industry are contemplating closure of their businesses, he added.

He said food retail has slumped by 30-40 per cent due to supply chain problems, shortage of manpower with attendance below 30 per cent and lower customer entry due to social distancing.

A recent RAI survey pointed out that the industry is experiencing severe liquidity challenges which can lead to large-scale unemployment.

Banks have done 'sweet nothing' in this situation to help retailers in the country, he said, urging the government to provide up to 50 per cent wage subsidies to help retain jobs of blue collar workers on salaries up to Rs 25,000 or minimum wages, whichever is higher.

He also urged the government to provide 25 per cent additional working capital credit lines to pay salaries and wages on time and provide working capital loans to the extent of 2-3 months of sales at low interest and a moratorium of 6-9 months for repayment of loans. All earlier loans should get a similar moratorium, he added.

More from Tamil Nadu.

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