About a fifth of the retail shops across India may fold up even if lockdown is lifted soon because expenses such as high rents will make business unviable amid muted sales, with customers expected to shop only for essential goods, trade bodies said.
In congested areas, where social distancing is impossible, traders have decided to remain shut even after the restrictions are relaxed. More than 60 per cent retail outlets in major markets including Colaba, Nariman Point and Andheri in Mumbai and Khan Market, Connaught Place and Sadar Bazar in New Delhi are occupied by tenants, traders say and many have defaulted on rent.
Rent for a 1,000 sq. ft. shop can be as high as Rs 5 lakh a month in Khan Market and Rs 3 lakh in Breach Candy area, said Praveen Khandelwal, secretary general of the Confederation of All India Traders. In Delhi’s old markets, shopkeepers who pay rents of Rs 4-5 lakh a month are scared, said Sanjay Bhargava, president of Chandni Chowk Sarv Vyaapaar Mandal. Most rent agreements have a force majeure clause and it has been invoked. Traders are trying to manage on their own with savings.
Ajay Bajaj, senior advisor to Confederation of Sadar Bazar Traders Association in Delhi, said rentals are expected to fall more than 50 per cent once lockdown goes.