Falling rupee forces retailers to cut down imports

The many hurdles for Indian retailers don’t seem to end. After witnessing an extended slowdown, low consumer sentiment, hike in excise duty for branded clothes, rising raw material costs and extended discount shopping periods, now they are

dealing with the rupee’s meltdown.

While on one hand foreign players waiting to enter India are putting their plans on hold, on the domestic front, local retailers are forced to cut down on imports they stocked. They are now replacing them with locally produced substitutes to battle the currency woes.

Falling rupee puts pressure

In the last three months, Indian economy is going through a crisis with the rupee loosing its value and falling against the dollar and other leading currencies. This has raised the rates of imported goods. Those selling imported consumer durables, clothing, food products, electronics, furniture among others are a troubled lot and expect to understand the correct amount of price rise once the new stocks arrive at their warehouses.

Since consumers have not been too interested in loosening their purse strings, these retailers are now reworking their offerings and merchandise mix. For instance, Shopper Stop’s hypermarket chain Hypercity is mulling whether to stop importing certain products with higher price tags. Even kids’ and maternity wear retail chain Mom & Me is considering new sourcing options including exploring localised products. About 40 percent of Mom & Me’s product range is imported and the chain has already witnessed a five percent price hike in its products.

Apart from Hypercity and Mom & Me, even Kishore Biyani’s Future Group, which has about five percent of its sales from imported products is planning to look for options within the country. If the rupees fall continues, it would definitely have a negative impact not only on the retail segment but also on the country’s economy as a whole. While apparel exporters were expected to reap the benefit of the situation, even there, the importing countries are expecting discounts and price cuts on the shipments.