Indian retailers have turned cautious and are revisiting their business plans as dark clouds still loom large over the economy and spending on borrowed money.
Overall retail market managed to grow by mere 2% for Q2 FY09 according to Nielsen report on Indian retail. The tightening consumer credit has hit the middle market the report added.
Mr. Kishore Biyani, the Pioneer of Indian retail said,
We are going to talk to fast moving consumer goods company to extend credit period to us. It’s always good to have longer credit period.
Mr. Ambeek Khemka of Vishal Retail said,
The panic in global credit market with reports of job cuts have put consumers into saving mode. We don’t want to get stuck with unsold stock for long in a weak market. One needs longer credit period, else our cash flow will get restricted and impact our entire business. Footfalls have also been affected and we are analyzing the same. All our expansion plans are on hold and we are going more for the franchise route rather than company owned and operated.
Mr. Samar Singh of Spencers Retail said,
As a part of our cost restructuring, we have shut at least 10% of our economically unviable stores. Though Food and Grocery businesses have been least impacted by the slowdown, we are extremely cautious about the situation and new store openings have been postponed temporarily.
Mr. Rajan Mittal of Bharti Wal-Mart retail said,
Cost cutting has become a reality. We are renegotiating with our vendors. Many retailers are picking up stocks on credit are prolonging their vendor payment.
Mall developers have been dragged into re-negotiations of rentals and in some cases they are forced to enter revenue share agreements. Have you stopped your big ticket retail purchasing or postponed your purchase decision so far ?