Concise insights on global finance.
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)
On Twitter http://twitter.com/breakingviews
Earlier in Capital Calls:
UK is late arrival on SPAC launchpad read more
EU music probe will ring in Apple’s ears read more
Darktrace’s IPO pop is deceptive read more
World’s back office is suddenly front of mind read more
DBS adds to Asia bank optimism read more
Reuters Breakingviews is the world’s leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.