First there was BC and AD. And now there is pre Nov 8 and post that date. 85% of the currency in the economy was declared illegal thus throwing the economy into a tailspin. Businesses that depended on cash transactions were seriously hit and trade across various sectors just collapsed. That was then. Today, March 2017, how is the retail market faring and rather more pointedly how are the malls in Goa faring. Are the footfalls back to pre Nov 8 levels normal and sales buzzing or is there still a drag on sales?
The rapidly evolving retail space in the state received a boost last year with the launch of a mall in Porvorim. The Mall de Goa offered a platform for various brands to expand their presence and others to make their debut in the State. International brands like McDonalds, Marks and Spencer made their much awaited presence in the State and national brands like Big Bazaar entered Goa. A walk through the mall is quite a revelation. Ram Vasumani of Marks and Spencer’s said the week starting November 8 was terrible with a dramatic drop in sales but after that, there was a very quick recovery. He attributed this to the fact that 75% of their customers conducted business using credit and debit cards.
Vasumani said “Goan’s were certainly affected and I will say that is still the case but we have international tourists like Iranians, Russians pay using credit cards and yes we also have domestic tourists making purchases using credit cards.”
Another international brand Louise Phillipe did not suffer any drop in sales. Nisha Kuswar who handles the store said there was absolutely no effect on the sales at the outlet. She said “The use of debit and credit cards just increased. 9 out of 10 customers used debit or credit cards and that one who pays in cash is usually a foreigner for whom it is fantastically cheap.”
Tommy Hilfiger however suffered through tough times. Siddarth, the manager of the store revealed that November was bad, December and January was good because of a sale but February was again not up to expectations. At the store, he said around 15 cards were swiped for around Rs 60,000 every day and cash transactions usually totaled Rs 15,000-20,000. A large number of the customers were domestic and Russian tourists.
Da Milano, the outlet that retails high end leather bags has witnessed a drop in business. Anju Naik, the store manager said “Prior to demonetisation, we had people walking in, paying cash and leaving. Now there are just 5 or 6 walk-ins in a day and just one will buy. On a weekend 10 to 14 will walk in and 6 or 7 will buy and all of them will pay by credit card.”
Now every mall has that one store that drives footfalls and generates fantastic sales. A walk through the store revealed that Big Bazaar was generating good business. Or so it seemed. Since no one at the outlet is authorised to speak, an executive on the floor said business had suffered after demonetisation.
The executive said “We have witnessed a 20 to 25 % drop in business across all segments. Earlier people would come and buy 20 kilos of basmati rice but now that has reduced to 5 kilos. This is because the cost of basmati rice has increased dramatically after demonetisation.”
Asked about the billing every month, he smiled and said that it was around Rs 4 to 5 crore a month now though he conceded it was much more before demonetisation.
A keen observer of the retail trade in Goa who did not want to be identified for this story said the store which was the anchor store in the mall was generating business worth Rs 10 crore approximately every month.
Shashank Mahatme, CEO, Jai Bhuvan Group, the company behind the mall said business could be better. He said around the time the government announced demonetisation, people were unsure as to how this would play out. Safety first had become the byword for consumers. December however was much better with demand improving with several non-resident Goans coming in with their liquid cash and banks had also eased up on the restrictions. Platforms like Paytm had come to the fore. Targets for December were achieved though the approximate 45% drop of Nov was not made up. January was good but not as good as December but the regular trends had caught on. He however conceded the buoyancy in the market was missing, people who were shopping for example for a wedding were still spending but that splurging on such occasions was now missing.
Shamik Caculo who now handles the operations of the Caculo Mall said the 15 to 20 days after demonetisation was one of total chaos. People, he said were just not spending however by mid December, the situation was under control and things starting getting back on track.
There was one very significant change he said “Earlier payment was in cash now 7 in 10 payments are done via card. I expect to witness old levels later in the year.” He said his mall was aimed at the Goan and this was seen in the sales figures with 85% being Goans and the rest shared between domestic tourists and foreigners.
The overall lethargy in business at the mall can be best exemplified by the drop in sales of the brand BlackBerry which has outlets in both the malls. A sales executive at the Mall De Goa said business had been affected. Transactions which were earlier evenly divided in cash and credit card payments were now skewed heavily towards credit cards. There was a drop in sales too. The outlet in Caculo Mall which had generated sales worth Rs 3.7 crore last year had now slipped to Rs 2.83 crore.
Perhaps the final word should go to a professional in the retail industry who did not want to come on record who said “The Indian consumer is very canny. He or she are still waiting and watching what the government will do. Since the government wants people to use their card so as to encourage records, people would like to see if the government will then use these records to then guess the expenditure of families over the last few years. I suppose by the end of this year we will witness possibly sales increasing. Till then all we can do is wait and twiddle our thumps.” Amen to that.
