A 5-10 per cent decline is expected in the revenue of India’s organised Food and Grocery (F&G) retail FY21, India Ratings and Research said on Monday.
The decline on business was attributed by the agency to the disruptions and general economic slowdown caused by the COVID-19 pandemic.
Primarily driven by the festive season demand, strong performance by the online channel and share gain by the organised segment, Ind-Ra expects the demand recovery to continue in 2HFY21 and FY22.
However, this will come at the expense of the unorganised sector, said the report issued on Monday.
The agency, however, maintained a full-year revenue decline to 5-10 per cent for F&G retail.
"Moreover, by taking cost-saving initiatives and proactive liquidity enhancing measures during 1HFY21, large retail players have successfully navigated through a demand slump in 1HFY21, avoiding sharp rating transitions. The agency continues to monitor the recovery in sector revenues and will take appropriate rating actions in case the rebound in sales is significantly below its expectations," it said.
Furthermore, the report said cited that despite visible green shoots of recovery during the quarter, the sector was adversely impacted by intermittent lockdowns across the country, and the pandemic spreading to non-metro cities as well.
"Most retailers have over 70 per cent of stores open July onwards, but the incremental recovery was gradual with the prevalence of social distancing norms, leading to reduced footfalls in stores, and prioritisation of spends towards essentials and low-ticket discretionary items amid a squeeze on income levels. Based on the select sample data, the revenue recovery was pegged at 45% of the pre-Covid levels for apparel retail, while it was over 95 per cent for F&G retail during the quarter," it said.
Besides, the report also looked at the country's apparel retail sector.
