Businesses staring at losses this Ramzan too

Businesses took a hit last Ramzan on account of the COVID-19 lockdown. With the restrictions being eased in the past few months, the trading community was hopeful of a resurgence in business activity, and was looking forward to making up for losses. But with the second wave hitting hard, prospects now seem grim.

Those part of the business community said that in the last 15 days of Ramzan, business, especially for those in the retail segment, picks up. While the first week of Ramzan generally doesn’t yield much in terms of footfall, eventually translating into sales, it is the last fortnight, especially last daha (10 days), which is crucial.

“After the lockdown last year, the market had picked up really well till late February this year. But as soon as March came about, and an increase in COVID-19 cases was noticed, there was a drastic slowdown. There is an unbelievable drop in revenues by up to 70%,” says Esa Mohammed, who runs a chain of popular clothing stores, and has interests in real estate as well.

Mr Mohammed says his company analysed the revenue generated through sales this year with data of the corresponding period over the past three years. What they found was that the revenues were far lesser.

“Overall, even if we do well in the last 10 days of the holy month, there can be an overall drop in revenue by 30% to 40%. The only way to beat this is by being careful, and wearing a mask all the time,” he says.

With the rumour mills of another lockdown or a night curfew on an overdrive, the business community says this has done little to instil a sense of equanimity. Instead, it has sparked confusion.

“The case is the same with all businesses, big or small. It is in the last 10 days of Ramzan that they seek to make headway. A substantial number of businesses depend on this. That another lockdown will be economically devastating is the prevailing sentiment among all traders,” says Ibrahim Bukhari, who heads the chain of ethnic wear stores, Jahanpanah.

While the brick-and-mortar stores are still open, the uncertainty has forced Mr Bukhari to take proactive steps. This entails moving his inventory online, so that those who do want to step out can shop on the website. “In such circumstances, it is important to think of such business models. There is no other option but to keep up with exigencies created by such situations,” he opines.

Another trader who did not wish to be identified said that clothing is usually procured from cities such as Kolkata, New Delhi and Mumbai. With COVID-19 restrictions in force in Maharashtra, procurement activity, too, has taken a beating. Wholesalers who have limited stocks are unwilling to deliver goods on credit.

“The uncertainty is so much that only those retailers who have a near-excellent track record are being given credit facility. Otherwise, it is cash-and-carry,” he said.

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Printable version | May 11, 2021 3:20:39 AM | https://www.thehindu.com/news/cities/Hyderabad/businesses-staring-at-losses-this-ramzan-too/article34353122.ece

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