While most sectors of the economy continue to struggle to overcome the impact of pandemic-induced lockdown, the essential goods segment, especially food and grocery, seems to have weathered this slowdown. This can be noted by a report saying that the average bill value for essentials has gone up 1.5 times after lifting of lockdownؙ—from Rs 650 per basket in early March to more than Rs 900 per basket presently.

According to a report by ANAROCK and Retailers Association of India (RAI) titled ‘Indian Retail – Certainty Despite Headwinds’, essential goods will fuel the Indian retail industry’s growth in the coming quarters as consumer expenditure continues to remain focused on essentials.

As per the report, food and grocery, followed by apparel, FMCD and electronics, furniture and home furnishings and QSR will see a V-shaped recovery within the next 2-3 quarters. Other segments like beauty, wellness and personal care and home essentials may take 4-6 quarters to recover fully.

Meanwhile, organised retail and e-commerce are on an upswing. The e-commerce is expected to more than double to 7 percent from the previous 3 percent in the same period.

“COVID-19 will work as a catalyst for the growth of organised retail and e-commerce in India. Online spending is on a marked rise with online shoppers projected to increase from 15 percent in 2019 to 50 percent of the total online population by 2026,” said Anuj Kejriwal, MD & CEO - ANAROCK Retail.

“In other new retail industry trends, omnichannel retailing is evolving rapidly with brands collaborating actively to enhance their reach. Many are using malls or in-mall stores as urban warehouses to ensure a faster delivery to customers and are tying-up with existing e-commerce/delivery portals to leverage their existing network and ensure reduced additional cost,” Kejriwal added.

The report also highlighted that digitally influenced spending is estimated to reach $550 billion (30-35 percent of all retail sales) by 2025 from $45-50 billion (8-10 percent of all retail sales) in 2016.

“The pandemic has enhanced the importance of retailers having an omnichannel strategy since concepts of digital browsing, click and collect, curbside delivery, video shopping etc. have gained importance. The pandemic has propelled consumers to purchase based on convenience either as delivery to home or by shopping at offline nearby stores or by time scheduled shopping,” said Kumar Rajagopalan, CEO, Retailers Association of India (RAI).

Recent surveys by RAI suggest that grocery and fashion are the top two preferred options immediately after relaxations in lockdown. As many as 33 percent of consumers were excited to shop post the lockdown while 75 percent of respondents in tier-II & tier-III cities plan to visit stores in malls in the next 3 months. Offline retailers have witnessed a conversion rate of 90 percent post-COVID-19 versus 20-40 percent pre-COVID-19.

Around 70 percent of retailers anticipate business recovery in more than 6 months and 20 percent in more than a year, as per RAI survey.

Further, revenue sharing models will ease rental pressure. The retailers are modifying business models to partner with mall owners to combat the situation, it noted.