Capital Calls: Reliance spotlights a troubled consumer

A woman walks past an apparel store of Reliance Industries Ltd, in Mumbai, India, October 7, 2020. REUTERS/Niharika Kulkarni

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SHALLOW POCKETS. Reviving Indian consumption will be hard if management commentary and results from Reliance Industries are any indication. Foot traffic at the conglomerate’s grocery, fashion and electronics stores recovered to 88% of pre-pandemic levels in the three months to March. In April, it nosedived to as little as 35%, below activity levels seen during the first wave. Retail revenue for India’s biggest company shrank 5% from a year earlier, to roughly $19 billion.

A more virulent virus which has overwhelmed hospitals is making shoppers cautious read more . Indians also know they are unlikely to get government handouts to cushion their spending.

About 80% of the workforce is in the informal sector, where real wages may have contracted as much as 30% in 2020, Ambit Capital’s Sumit Shekar reckons. The influential Confederation of Indian Industry trade group on Sunday called read more for “the strongest national steps” to curtail economic activity to save lives. It could take time for demand to store up again, and even then shopping may be restrained. (By Una Galani)

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