Business Shrinkage Activity: The coronavirus crisis has changed the world completely in the last few months. Since the day lockdown was announced, all of us were locked into our homes, economic activity has come to a near standstill. Everyone has been impacted may it be a companies, start-ups, salaried persons etc.
Ever since the Corona Virus panic broke out in early March, major business sectors may it be Hotels Restaurants, retail sector and other business sectors have witnessed a huge dip in revenue.
Stores selling essential goods that have been allowed to remain open during the lockdown are also suffering losses as they aren’t allowed to sell other general merchandise, which would otherwise bring them higher margins. Overall, there has been a significant impact on retail industry.
Business Shrinkage Concept
Retailer’s fears that if the panic situation continues till June end, India is staring at a scenario where 25- 30 per cent of the retail stores may shut down, leading to lakhs of people losing their jobs.
Now, retail shops have started opening with conditions, the challenge will be, whether the customers will start purchasing as normal as previous. That’s when retailers would be in the brink of closure, which will lead to loss of jobs. Restaurants are open with half sitting capacity and booking through app, these condition have reduced the sale of restaurants by 35% to 40%, many Chain of restaurants will be closed soon because of current Scenario of market.
Financial year 2020-21 will be learning year for major business sectors. People have changed their life style and government is making many rules for running these businesses, of which practically implementation is very tough. Business Shrinkage Activity will be performed by most of Industries with large scale, as market sustainability is important. As per a market survey 20% to 30% business shrinkage activity will take place in current financial year under impacted sectors.
