Summer lockdown eats into sales, industries expect Rs 30,000 crore hit
Sales of summer products such as air conditioners (ACs), refrigerators, soft drinks, and ice cream have been hit as the coronavirus lockdown has restricted consumer spending during the usual peak business months of March to May, the Economic Times reported.
Sales in the summer account for close to 50 percent of the total annual sales for these goods and companies are facing Rs 30,000 crore in sales losses.
The Consumer Electronics and Appliances Manufacturers Association (CEAMA) has estimated Rs 22,000 crore losses for the period – the bulk in AC and refrigerators. While industry experts estimate Rs 5,000 crore loss for the soft drinks segment and Rs 2,500 crore loss for the organized ice cream industry, the paper said.
Businesses in these segments usually peak between March and May, but the lockdown is extended for most of this period. Companies also fear that business will continue to be slow post lockdown as well, as individuals may prioritize spending in light of the coronavirus or COVID-19 situation.
“Our ice cream sale is currently down by 85 percent over the same period last year. The season is gone and even if the lockdown is lifted in May, we fear there may be restrictions on movement, which would continue to impact sales,” RS Sodhi, MD of Amul India told the paper.
A Coca-Cola spokesperson was, however, optimistic about business momentum as the company is beginning to see improved momentum in consumer sentiments and consumption, compared to when the lockdown began.
KJ Jawa, MD of Daikin India told that the situation is “uncertain” and “there could be recovery”. He also pointed out that the Indian Meteorological Department (IMD) has estimated monsoons to begin in mid-May. “Right from factories to warehouse and logistics, everything is in a complete mess now,” he said.