Retailers in smaller Indian cities are likely to see business recovery sooner than those in metros thanks to the limited impact of the lockdown, migration to smaller cities and better rural income, says a report by analyst Motiwal Oswal Financial Services. According to the report, demand in smaller cities could return to normalcy by the festive season in October-November. However, overall revenue in FY21 could be lower by 20-30 per cent. Retailers expect a full recovery over the next six to nine months.

In fact, regional retailers in smaller towns are seeing footfall at 50-60 per cent of pre-COVID levels. In cities where the Coronavirus cases were limited, consumers are returning to stores, indicating pent-up demand. The report said sales were already in 60-70 per cent of pre-COVID levels as now, only serious buyers are turning up. Currently, customers are purchasing low ticket size essential products. However, the kids wear segment has seen a spike in sales, while demand for wedding clothes has dropped sharply.