aut aut research journal issn no: 0005-0601 retailing and

RETAILING AND ITS IMPACT DURING COVID – 19 IN

COIMBATORE CITY

Dr. B. ADALARASU, Dean Academics - Research, KG College of Arts and Science,

Coimbatore

Abstract

Back Ground: Retailing in India has several outstanding achievements as well as

impressive growth during last few decades. Indian retail market is one of the top five retail

markets in the world by economic value and also it is considered as one of the fastest

growing retail markets in the world. Retailing in India is the most important pillar of its

economy and accounts of about 10% of its GDP. Indian retail industry is classified into

organized and unorganized sectors. Retailing in India is business activity which evolves

from ancient and medieval period. It has faced many developments and changes in

multiple folds in the last three decades. This COVID-19 has brought so many changes

around the world in all aspects. It has marked an imprint on retail sector also. It has given

so many challenges to the modern retailers and provided a lot of opportunities to both

traditional and modern retailers. All these challenges made the retail sector to take a new

facet. This descriptive study provides information about the challenges of retail industry in

Coimbatore city due to Covid and its future prospects.

Objectives: This descriptive study provides information about the challenges of retail

industry in Coimbatore city due to Covid and its future prospects. The main purpose of this

study is to identify the challenges faced by the retail industry during this pandemic.

Material & Methods: The research is descriptive in nature. The structured questionnaire

was designed to collect data from the target respondents (retailers). The population of the

study includes the retailing industry of Coimbatore City. The researcher hence considered the

population to be infinite. The researcher has distributed around 400 structured

questionnaires and received back around 387 questionnaires. The sampling method adopted

for the study was randomized probability sampling. The pilot study was conducted with a

sample of 40 respondents; Cronbach Alpha value has been identified more than 0.8. The

collected data was fed in the SPSS 20 software and the statistical tools like measures of

central tendency (Mean), measures of dispersion (Standard Deviation), and correlation

Aut Aut Research Journal

Volume XI, Issue XII, December/2020

ISSN NO: 0005-0601

Page No:120

have been used to extract the research.

Result: There is a lack of a direction as the situation is constantly evolving and goals are

shifting drastically within the epidemic timeframe. There are going to be a significant

amount of exits in the next 6 to 9 months. The retailers should focus right now on sustain in

the market and not on profitability. With things like work from home becoming the new

normal, it will bring business to cafes because people will end up working from these places

Keywords: Retail, Retailing, Retail Industry, Lockdown, Coronavirus, Covid – 19.

1.1. Introduction

India has been in a condition of lockdown for over six months because of the Novel

Corona virus pandemic and notwithstanding the legislature conceding advance EMIs and

facilitating credit, miniature, little and medium undertakings, and retailers are gazing at a

sombre future. The East India retail industry, which has a solid presence of neighbourhood

and little retailers, is confronting an intense money mash because of a sharp fall in business

and operational difficulties with low or zero manpower. It will be a major test for the East

Indian retail industry, which has been on development binge throughout the most recent ten

years, to beat the current circumstance. A webinar was organized by the Retailers Association

of India (RAI) on „East India Focus – Impact of COVID-19 on Retail Business‟, the next in

Coping with COVID-19‟ series. Moderated by Pulkit Baid, Director, Great Eastern Retail, the

webinar focused on the issues faced by retailers in East India.

1.2. Indian Retail during Pandemic

The novel covid-19 pandemic has tilted the entire globe and the life of human

beings. This pandemic has greater effect on individuals and also the business community.

The global business scenario has slowed down and it doesn't fail to leave a mark on the

retail sector too. This pandemic disease has created a large impact on the retail sector and

made it to a standstill position, especially the high end and luxury retailers. This effect on

necessary items retailers is also not worthy but not to the far extent.

In India, this pandemic has started affecting retailers from the last week of march

2020 to till date. The lockdown announced by the government has made all the retailers to

face decline in their business. The traditional retailing pattern has supported the consumers a



ISSN NO: 0005-0601

Page No:121

https://www.indiaretailing.com/tag/covid-19/

https://www.indiaretailing.com/tag/covid-19/

https://www.indiaretailing.com/tag/pulkit-baid/

https://www.indiaretailing.com/tag/great-eastern-retail/

lot in this pandemic situation to get the necessity items. Most of the traditional retailers deal

with the necessity items such as food and grocery which helped a consumer to a greater

extent. The modern luxury retailers such as electronics stores, jewellery stores, fashion and

apparel stores are the real sufferers of this season. As the malls remain closed due to

lockdown, they want to move out of these large buildings to fetch customers of their own.

Apart from this the confidence of spending among the people has reduced to a large

extent due to uncertain economic conditions prevailing in the society. Most of the disposable

income has been spent on food, grocery and medication, the thought of spending for lucrative

items has been postponed which affected the organized retail sector in high proportion. The

organized retailers are in a position to face the financial crisis of their business and also to

long for the dawn of a booming economy. Though the traditional retailers are less affected

in their business, they too face problems related to the supply chain, stockpiling, hygiene

maintenance, government rules and regulations and etc. during this period the consumers are

also facing the threat of losing jobs, reduction in financial benefits, health care difficulties

and other lifestyle disruptions which all have a direct effect on the retailers.

1.3. Challenges - Retailers during Pandemic

The novel pandemic has changed the business practices of retailers and made them

face many confrontations in doing business. Some of the challenges faced by retailers are as

follows:

Shrinkage of Business - Due to the lockdown, the entire economy has faced a

slow pace and all the retailers faced the shrinkage in their business volumes. In

India, most of the apparel, footwear and fashion retail shops have the habit of

doing March year end sale/ March clearing sale in the last week of every March.

This financial year end sales have got affected by this lockdown.

Fall in Consumption - The consumption pattern of the consumers has also

decreased which tends to fall by 25 to 30 % for the next six to nine months. This

lockdown has reduced the confidence of consumption among the consumers, and

the decrease in consumption pattern is due to the fear of disease, loss in income

and also fear in job security.

Diminishing Brand Loyalty - The recent change in shopping habits of the



ISSN NO: 0005-0601

Page No:122

consumers made them to stick on to one retail store even for buying necessity

items. But, the restrictions laid in commutation during lockdown make people

buy the essential items from the nearby retailers itself and avoid them going to

their usual shopping areas. This has paved the way to the consumers to use /

switch over from nationalized brands to private brands, as small retailers are

selling more amounts of private label items.

Subsidised Hedonic Needs - The growing young population of this country has

given importance to hedonic needs when compared to the utilitarian needs. But

in this pandemic situation, the young generation also changed their need pattern

due to life fear. This fear and the restrictions made by the government also made

the youngsters to turn towards the online retailers instead of brick and mortar

retail stores.

Reduction in Money Flow - This novel pandemic disease has created a large

amount of fear among the earning families due to salary cut, low business

volume, fear of losing job and etc. This decrease in the money flow among the

low income group people who purchases the necessary grocery items only and

avoids unnecessary items. This fearful situation has created a setback to the

luxury item retailers and also switching off to local brands.

Managing the Fixed Cost - In retail business, the proportion of fixed cost is

high when compared to the variable cost. The fixed cost includes rent,

employee‟s salary, power cost and etc. which utilize the 60% of their revenue.

During this lockdown, this fixed cost has to be managed with the poor revenue

earned by the retailers and this may lead to shutdown of business also.

Operational Difficulties - Apart from the business fall, the retailers have to

change themselves in the way of doing their business. Organised retailers have to

manage the supply chain disruptions, restriction in the footfall of the stores due

to the social distancing, hygiene improvements as per the local governance,

reduction in promotional campaigns so as to avoid over crowd. Even unorganised

retailers are in a position to face these kinds of operational changes such as home

delivery, e- payments, hygiene practices laid by local authorities and etc.



ISSN NO: 0005-0601

Page No:123

Other Threats - Recently developed formats like Malls, Hypermarkets and

Supermarkets are facing the threat of shopkeepers moving out of these large

buildings due to rent problems, restriction in consumer traffic and etc. The

retailers association is having a negotiation with mall owners in order to have a

revenue sharing rental method but which was not been accepted by the mall

owners. Forum mall in Bengaluru has accepted for some kind of rental relief for

its retailers. The branded necessity stores are facing a major downfall due to this

lockdown by losing their business to local kiranas, mom & pop stores and etc.

1.4. Aim of the Study

The study aims at shedding light on problems faced by Coimbatore city due to the

hassle of the lockdown, change in consumer behaviour and markets. The role of the

stakeholders of the retail units like landlords, retailers and the government in the revival and

recovery of the economy is also studied.

1.5. Review of Literature

Kavita Verma and Deep Punia (2012) studied on Brand preferences for soaps and

detergents in rural Haryana, revealed that among nine brands of bathing soaps, Lux was the

most preferred brand followed by Dettol and Dove. Lux was most preferred by non-working

women due to its good smell, softness and faith in brand and because of the celebrity

endorsements of Lux. whereas Dettol was most preferred by working women because of the

concept of hygiene. Among washing soaps, Rin and Nirol were more preferred by the

working women. Rin was preferred by the working women because it saves time and

removes dirt effectively than other soaps. Rin was more preferred by high income group

respondents because of good result. Whereas Wheel and other local brands like Bhai, Kinara,

Mahajan, etc. were more preferred by non- working women because these are relatively more

cost effective and consume less water. Regarding detergents, it was observed that Surf

Excel was most preferred brand followed by Surf by the working women whereas non-

working women preferred Nirma followed by Wheel detergents.

Parrish (2010) has investigated how fashion retailers use private labelling to

differentiate their products and to gain competitive advantage. This type of competitive

strategy results in increased profits and market share.



ISSN NO: 0005-0601

Page No:124

Barry Burman and Joel Evans (2006) have offered a different kind of approach to the

present system of retailing. The authors have noticed that the non-traditional retailing

especially Web Stores, or Electronic Retail Channels are becoming more profitable and

popular because of changing tastes and styles of buyers. This has changed the competitive

strategies, distribution systems and promotional strategies that are adopted by the retailers.

Bowd et al. (2006) has examined a stakeholder and management perspectives of CSR

in retail. They found that the symmetry between management and stakeholders‟ views of

CSR (the core importance of obeying the laws and regulations of government, ethical

conduct, community involvement, philanthropy, human rights, health & safety), limited

awareness of CSR activities by stakeholders, and assessment of the benefits resulting from

CSR communication (e.g. corporate reputation).

Rajan, Irudaya (2006) have explained that the changes in the attitude of the shoppers

has resulted in firms insisting to focus on maintaining balance between the rate and quality

in addition to price competitiveness.

Morschett et al. (2006) have tried to identify types of competitive advantage within

the retail industry which based on (1) quality of performance, store atmosphere, service (2)

convenience (3) price. However, they concluded that price and quality are independent

factors that can be mutually achieved without any trade-off between them.

Gonzalez-Benito et al., (2005) have stated that the competition in retail changed over

the past years. Nowadays, different competing categories of store types provide specific

benefits to match the needs of different customer types and shopping situations.

1.6. Research Gap

There are many studies related to the retail industry with regards to customer

constraints during this pandemic. Very limited study has been made in congruence with the

retailers. Hence the researcher was much interested in finding out the challenges faced by the

retail industry during this pandemic.

1.7. Statement of the Problem

Growing share of the organised retail sector in India has been one of the major drivers.

Over the last decade, India has witnessed a demographic shift, with rapid adoption of internet



ISSN NO: 0005-0601

Page No:125

and growing digital media, and has significantly altered the purchase decision of Indian

consumers. The sudden outbreak of the pandemic, past a year has made a tremendous decline

in the retail market. As mentioned in the above theory the challenges faced by the retail

marketers are enormous. The pandemic has toppled the retail market upside down. This made

the researcher to identify the various challenges faced by the retail industry during this

pandemic.

1.8. Objectives of the Study

Based on the previous research studies the objectives of the present research are

designed and are given below;

1. To identify the challenges faced by the retail industry during this pandemic.

2. To offer suitable suggestions to the retailers in tackling the pandemic situation.

1.9. Research Methodology

The study is descriptive in nature. The primary and the secondary data were adopted

for collected the data. The secondary data was collected from the previous literature and

related journals. The primary data consist of structured questionnaire. The structured

questionnaire constitutes the attributes of Retailing. The major variables are Operational

difficulties, Managing the fixed cost, Reduction in money flow, Subsidised hedonic needs,

Diminishing brand loyalty, Fall in consumption, Shrinkage of business.

The researcher conducted the pilot study with a sample of 50 respondents. The

reliability statistics was administered for the 50 respondents. The Cronbach‟s Alpha value

for the attributes of Retailing were found to be more than 0.8, this clearly signifies that the

questionnaire is reliable. After reaching the approved alpha value, the researcher has moved

forward for the major research in the prescribed geographic location and the industry.

The geographic location and the target industry selected for the study was retailing

industry of Coimbatore City. The target population for the current study are the retailer. The

researcher found that the non-availability of exact number of retailers. The target population

was found to be infinite; using the De Morgan‟s table the researcher was able to consolidate

the sample size of 384 with a confidence level of 95% and a confidence interval of 5%. The

sampling method adopted for the study was randomized probability sampling.



ISSN NO: 0005-0601

Page No:126

The researcher has distributed around 400 questionnaires and tried to reach out the

sample size. The questionnaire reverted back from the respondents were 387 and remaining

13 questionnaires were found to be biased and unanswered. So, the researcher was able to

achieve a sample size of 387 which is above the required sample size listed in the De

Morgan‟s table. The collected data were fed into Statistical Package for Social Sciences

(SPSS) 20 version, popularly used Statistical Software for Social Research Analysis. The

statistical tools used for analysis were Measures of Central Tendency and Dispersion (Mean

and Standard Deviation) and Bi - Variate Correlation.

1.10. Data Analysis

The data were analysed using Measures of Central Tendency, Measures of Dispersion

and Bi - Variate Correlation.

1.10.1. Measures of Central Tendency and Dispersion

The current part analyses the Measures of Central Tendency and Dispersion for the

variables of Challenges faced by the Retailers during this COVID 19. The analysis is as

follows;

Table 1. Retailers Challenges during COVID 19

Variables N Mean Sd Rank

Operational Difficulties (OD) 384 4.36 .480 8

Managing the Fixed Cost (MFC) 384 4.49 .501 6

Reduction in Money Flow (RMF) 384 4.43 .495 7

Subsidised Hedonic Needs (SHN) 384 4.31 .463 9

Diminishing Brand Loyalty (DBL) 384 4.10 .302 10

Fall in Consumption (FC) 384 4.73 .446 3

Shrinkage of Business (SB) 384 4.58 .494 5

Rent Problems (RP) 384 4.67 .472 4

Restriction in Consumer Traffic (RCT) 384 4.80 .399 2

Losing Business to Local Kiranas (LBLK) 384 4.91 .288 1

Challenges (CHA) 384 4.54 .185

The mean value for the variables of “Retailers Challenges during COVID 19”

ranges from 4.91 to 4.10. The respondents strongly agree with the variables Losing Business

to Local Kiranas (LBLK) (Mean Value = 4.91, Standard Deviation = 0.288), Restriction in

Consumer Traffic (RCT) (Mean Value = 4.80, Standard Deviation = 0.399), Fall in

Consumption (FC) (Mean Value = 4.73, Standard Deviation = 0.446), Rent Problems (RP)

(Mean Value = 4.67, Standard Deviation = 0.472), Shrinkage of Business (SB) (Mean Value



ISSN NO: 0005-0601

Page No:127

= 4.58, Standard Deviation = 0.494), Managing the Fixed Cost (MFC) (Mean Value = 4.49,

Standard Deviation = 0.501), Reduction in Money Flow (RMF) (Mean Value = 4.43 Standard

Deviation = 0.495), Operational Difficulties (OD) (Mean Value = 4.36, Standard Deviation =

.480), Subsidised Hedonic Needs (SHN) (Mean Value = 4.31, Standard Deviation = 0.463)

and Diminishing Brand Loyalty (DBL) (Mean Value = 4.10, Standard Deviation = 0.302).

The overall mean value for the variables of “Retailers Challenges during COVID 19” is

4.54 and standard deviation of 0.185. This clearly shows that the respondents are having high

level of Challenges for operating their business during this COVID 19.

1.10.2. Bi - Variate Correlation

Table 2. H0: Relationship between the Dimensions of “Retailers Challenges during

COVID 19”.

Variables Challenges

Operational Difficulties 0.329**

Managing the Fixed Cost 0.712**

Reduction in Money Flow 0.353**

Subsidised Hedonic Needs 0.563**

Diminishing Brand Loyalty - 0.040

Fall in Consumption 0.264**

Shrinkage of Business 0.708**

Rent Problems 0.462**

Restriction in Consumer Traffic 0.325**

Losing Business to Local Kiranas 0.320** **. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

Values in the table are Pearson Correlation coefficient

The independent variables “Operational Difficulties” (r = 0.329), “Managing the

Fixed Cost” (0.712), “Reduction in Money Flow” (0.353), “Subsidised Hedonic Needs”

(0.563), “Fall in Consumption” (0.264), “Shrinkage of Business” (0.708), “Rent Problems”

(0.462), Restriction in Consumer Traffic (0.325) and “Losing Business to Local Kiranas”

(0.320) shows positive correlation with dependent variable “Retailers Challenges during

COVID 19”. The variable Diminishing Brand Loyalty (Pearson Correlation Value = -.040)

shows no correlation with dependent variable “Retailers Challenges during COVID 19”.

1.11. Recommendation

The retailers are facing high level of challenges during this Covid 19 time period. The

hierarchy challenges are shows in the Table 1. As opined by the respondents are facing high

level of challenges in the variables like “Losing Business to Local Kiranas (LBLK)”,



ISSN NO: 0005-0601

Page No:128

“Restriction in Consumer Traffic (RCT)”, “Fall in Consumption (FC)”, “Rent Problems

(RP)”, “Shrinkage of Business (SB)”, “Managing the Fixed Cost (MFC)”, “Reduction in

Money Flow (RMF)”, “Operational Difficulties (OD)” and “Subsidised Hedonic Needs

(SHN)”. To controversy “Diminishing Brand Loyalty” alone shows low level challenge to

the retailers in tacking the situations. The retailers can handle the challenges by the following

strategies, which has to adopt for the success of their business;

1.11.1. Moving to Online

This Pandemic situation made customers to move highly towards the online retail

activities when compared to brick and mortar system. Many retailers in tier 1 and tier 2

cities has started to do business and services using smart phones through Whatsapp,

Messenger etc., and receive payments using online platforms such as Gpay, Paytm, PayU

and etc.

1.11.2. Market Penetration

Middle class family of India has got economically affected due to this lockdown and

they form a large proportion of business for the organised retailers. To ensure their

continuation in the business, retailers can go for reduction in price and also value and range.

The retailers have to concentrate on low premium products when compared to the high end

products.

1.11.3. Diversifying Products

The retailers can concentrate on the products which are necessary in this pandemic

situation. For example, Bata showrooms are now concentrating on home chapels when

compared to the fashion footwear, as people are remaining at home and most professional has

shifted to work from home mode. Even more number of drug manufacturers has started to

produce hand sanitizers and garment manufacturers moved to produce masks and gloves.

1.11.4. Looking Beyond Market

Organised retailers have to move to new market or to rural market which can

balance the business loss in tier1 & 2 cities. For example, Maruti Suzuki has planned to open

new dealer showrooms apart from tier one or two cities so as to reap the benefit of economic

stimulus package announced by central government for rural people. The giant retailers can



ISSN NO: 0005-0601

Page No:129

start to concentrate on tier two and tier three cities to multiple their business volume.

Many small retailers in tier 3cities are facing financial crisis due to this lockdown and may

be running out of business. This situation can be easily utilized by the organized branded

retailers to open their outlets.

1.11.5. Move Out of Large Buildings

Due to business crisis, the organised retailers are ready to move out of the malls,

hyper and supermarkets towards the high end streets. Doing their business as standalone in

the retail hub areas will get their own customer traffic and dependency is not required. This

situation is quite obvious as malls and Hypermarkets are at the end of the list for relaxation of

lockdown.

1.11.6. Benefit for Unorganised Retailing

The least affected group of retailers is unorganised sector. This sector has supported a

lot to the consumers in providing the necessary items during lockdown. Thanks to this sector

for their incredible service in this situation. Unorganised retailers who constitute 92% of

retail business in India has the timely option of changing themselves by introducing new

services to the customer for the same value.

1.11.7. Government Support

The government needs to give enough time for retailers to prepare before issuing

directives. The government needs to come out with phase wise resuming of operations.

Support from RBI to ensure that banks help with liquidity. Help with rent, EMIs still getting

debited and salaries to employees. Government intervention for guidelines in terms of how

store rentals will be charged. Some labour laws should be liberalized to generate and retain

employment..The government should refrain from measuring all retailers with one scale.

Different sizes and types of retailers. Govt. has to de-legislate. Government has to ensure

consumption starts. People will have to keep buying. So that everyone is able to survive the

next one year. Stimulating consumption is more important than just levying taxes and

interests. The government needs to address the issue of interest payments; with zero revenue

or most retail, piling interests is a huge cause for concern. Subsidy on the safety and

sanitization products that store-owners will end up spending large amounts of money on once

operations open to ensure a safe shopping environment.



ISSN NO: 0005-0601

Page No:130

Conclusion

There is a lack of a direction as the situation is constantly evolving and goals are

shifting drastically within the epidemic timeframe. There are going to be a significant amount

of exits in the next 6 to 9 months. The retailers should focus right now on sustain in the

market and not on profitability. With things like work from home becoming the new normal,

it will bring business to cafes because people will end up working from these places.

Reference

Bowd, R., Bowd, L., Harris P. (2006) Communicating corporate social responsibility: an

exploratory case study of a major UK retail centre. Journal of Public Affairs, Vol. 6, pp.

147-155.

Burman Barry and Evans Joel, Retail Management (2006) : A Strategic Approach, 10th

ed., Prentice Hall. Pearson Education Inc., Dorling Kindersley Publishing Inc.,.

Gonzales-Benito, O., Munoz-Gallego, P.A., Kopalle, P.K. (2005) Asymmetric

competition in retail store formats: evaluating inter and intra-format spatial effects.

Journal of Retailing, Vol. 81, No. 1, pp. 59-73.

Kavita Verma And Deep Punia., 2012, Brand preferences for soap and detergents in

rural Haryana. Annals of Agri Bio Research; 17(2): 149-151.

Parrish, E. (2010) Retailers‟ use of niche marketing in product development, Journal

of Fashion Marketing and Management, Vol. 14, No. 4, pp. 546-561.

Rajan, Irudaya S., (2006), Population Ageing and Health in India, Background Paper

Series 1, Center for Enquiry into Health and Allied Themes. Mumbai.



ISSN NO: 0005-0601

Page No:131

aut aut research journal issn no: 0005-0601 retailing and

Documents