The industry body has also appealed to major oil marketing companies, including Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum, to maintain adequate commercial LPG allocation for food service businesses.

The appeal comes after communications from oil marketing companies indicated that LPG supplies are currently being prioritised for domestic consumers due to geopolitical disruptions impacting global fuel supply chains. While the retail body acknowledged the importance of safeguarding household energy security, it noted that the restrictions are creating operational challenges for restaurants and commercial kitchens that rely heavily on LPG for daily cooking operations.

According to RAI, the restaurant and food service sector plays a critical role in India’s urban food ecosystem, serving millions of consumers every day. These establishments provide meals to hospital staff, students in hostels, industrial workers, office employees, travellers, and customers using food delivery platforms.

The association warned that prolonged disruption in commercial LPG supply could lead to temporary closure of restaurants and commercial kitchens, interruptions in food services for hospitals and institutions, employment losses across the hospitality ecosystem, and operational stress for small and medium food businesses.

To mitigate the situation, RAI has requested the government to consider a minimum assured allocation of commercial LPG cylinders for restaurants and food service establishments, particularly those serving institutional needs such as hospitals, educational institutions, industrial facilities, and transportation hubs.

The association has also proposed establishing a structured coordination mechanism between industry bodies and oil marketing companies to address supply challenges during the current period of global fuel disruption.

“A prolonged disruption in LPG supply to restaurants and commercial kitchens could lead to the non-availability of food for millions of citizens who rely on these establishments for their daily meals, including students in hostels, individuals without adequate housing, and busy working professionals. Restaurants and food service businesses are integral to India’s daily food supply chain. Ensuring continuity of LPG supply will help maintain food availability while safeguarding livelihoods across the sector. At the same time, policy support such as GST exemptions and incentives on electric commercial cooking equipment, along with the promotion of bio-LPG and other alternative fuels, can help the sector transition toward more resilient and sustainable energy sources,” said Kumar Rajagopalan, CEO of the Retailers Association of India.

RAI added that it is willing to work closely with the government and industry stakeholders to identify practical solutions, including medium-term transitions to alternative energy sources such as piped natural gas and energy-efficient commercial cooking technologies, to ensure stability across India’s retail and food service sectors.

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Retailing is one of the pillars of the Indian economy and accounts for about 10 percent of its GDP. The Indian retail market is estimated to be worth $1 trillion and is expected to reach $2 trillion by 2032. India is one of the fastest growing retail markets in the world, with 1.4 billion people.

A key aspect of retail sector is that the advantages are not just restricted to specific strata of the society; instead, retail has the ability to benefit different entities ‐ institutional as well as social. The contributions from modern retail flow to the exchequer due to increased transparency.

With the recent reforms, the government has made substantial efforts to revitalize the sector. The Retailers Association of India, are genuinely supportive of the government’s vision to achieve inclusive growth for India. The retail sector has the true potential to provide impetus to the government’s vision.

RAI Pre-Budget Memorandum 2023-24, highlights certain areas that require governments attention, as they have the potential of providing a necessary push to unleash growth in the sector. RAI recommends that the government should consider the following key points to make the retail industry stronger and contribute to the GDP of the country.

1. Boost retail and consumption: To ensure the growth of the sector, the Union Budget for FY 23–24 should focus on generating demand and spurring consumption by offering benefits or concessions in the form of lower taxes. It will boost the overall consumer sentiment and benefit the retail sector. Consumption equals to Development. Tax benefits and relief to individual tax payers will increase the monthly disposable income and support consumption.

Further the budget must prioritize growth-oriented measures to stimulate demand and consumption. The budget should outline supportive policies, simplified regulations, skill development and simple goods and services tax (GST) norms to aid in the development of the retail industry.

2. Provide low-cost finance to retailers: There is a need to provide lower interest rate to the retailers through the special announcement in the budget to assure easier financing for the retail businesses. The government should allocate a special fund and formulate a special trader finance scheme with SIDBI to help millions of independent retailers across the nation by declaring low-cost loans, and relaxing some industry guidelines.

3. Encourage innovative and convenient digital payment methods: Consumers can now make payments more easily, thanks to the Unified Payments Interface (UPI), and other digital payment options. In India’s semi-urban and rural shops, UPI alone saw a 650% increase, eliminating the need of the cash-based economy and making it simpler for corporations to enhance their operations in the online segment.

However, new upgrades in the technology, and new and easy modes of digital payments must be supported by the government. Further, there is a need to promote digital transactions by subsidizing MDR, on use of the debit card.

4. Consider retail as an essential service: F&B retail sector needs to be considered as a priority and an essential service. Subsidies and benefits should be given on land rates and other necessities such as electricity.

5. Expedite National Retail Policy to enable ease of doing business: There is a need to expedite the formulation and implementation of National policy. Such a step would provide a substantial boost to the retail sector and facilitate ease of doing business.

6. Extend all the MSME benefits to retail traders: The government has included retail and wholesale trades as MSMEs, and they are allowed to be registered on Udyam Registration Portal. However, benefits to retail and wholesale trade MSMEs are restricted to Priority Sector Lending only. RAI recommends that retail and wholesale traders should be eligible for all benefits available to other MSMEs.

7. E-enablement of MSME retailers: There is a definite need to modernize Indian retailers. The first step to modernization is the use of Point of Sale Machines (also called as POS machines) as these help retailers in making bills for customers and also allow the owners of the stores to allow a non-family member to the cash tills without the worry of embezzlement.

The uses of the POS machines are:

• It allows owners of businesses to employ managers who can manage the business without losing control over basic data of sales.
• It allows a quick update of stock, sales, and intake, and hence helps manage sales and inventory
• It helps keep a record of customers and allows for a more useful CRM (Customer Relationship Management)
• The bills made from such machines create accountability to customers and ensures that retailers take responsibility for what they sell to customers.

8. Model Shops and Establishments Act: The Central Government introduced ‘The Model Shops and Establishment (Regulation of Employment and Condition of Services) Act 2016′ (hereinafter referred as The Model Bill) on 29th June 2016 which has been one of the key asks of the Retailers Association of India for the overall benefit and growth of the Indian retail sector.

The Model Bill is a progressive move by PM Narendra Modi’s government that enables the states to keep shops and other such establishments open 24×7, all through the year. This gave a substantial boost to employment generation and will also benefit the consumers in terms of convenience and accessibility.

The government of Maharashtra and Gujarat has recently amended the Maharashtra Shops & Establishments Act 1948 in line with the Model Bill.

The government should encourage and incentivize other states to adopt the Model Act. Retail businesses also need EDC (Electronic Data Capture machines) for acceptance of various bank cards and other digital payment devices. This helps in the acceptance of digital money and also promotes an accountable trading environment. According to RAI, the promotion of the use of Point of Sale machines is a good way to move the country and its citizens towards a fully-accounted economy.

Small traders have to be encouraged to use EDC machines so that they can accept digital payments without worry. Efforts should be made to ensure that all retailers in the country use EDC machines and also that the cost of accepting digital payments is never more than the cost of accepting cash. The government may want to create free or subsidized dispensation of such machines in the country. This can be done in stages – around 25 lakh machines to start with. It will also help government as these retailers will register under GST.

Efforts should also be made to encourage retailers to get POS machines with good software for sales bills and sales accounting. Reimbursement of money for such POS to small retailers can be a good way to encourage adoption. All these software’s should have an inbuilt security system and robust accounting standards so that an audit trail of bills is feasible. Some care needs to be taken to certify acceptable POS machines and software.

9. EPCG for Retail Sector: RAI also recommend to reintroduce ‘EPCG for Retail Sector,’ to create modern infrastructure in retail sector. Concessional duty benefits under EPCG scheme shall be extended for import or capital goods required by retailers having minimum area of 1000 sq. meter.

The post RAI Provides Pre-Budget Recommendations to Boost the Retail Sector appeared first on Business of Food.

The post RAI Retail Business Survey Indicates a Growth of 3% in May 2024 vis-a-vis May 2023 appeared first on Business of Food.

Speaking about the findings, Kumar Rajagopalan, CEO, Retailers Association of India (RAI), said,  ‘‘In March 2024, our review of the retail sector revealed signs of a recovery in growth. The consumption landscape appears robust, driven by increased discretionary spending on apparels and sporting goods. However, the jewellery sector, despite its significant growth since last Diwali, has experienced a slight slowdown this past month, likely due to the recent surge in gold prices. CDIT (consumer durables and IT) segment is still yet to recover.’’

He further adds, ‘‘In the lead-up to the 2024 General Elections, we are optimistic about the retail sector’s growth prospects. Historically, election years catalyse economic activities, enhancing consumer spending across regions and categories. This year, we anticipate a similar trend, with substantial increases in discretionary spending, particularly in sectors such as FMCG and consumer durables.”

Retail businesses across regions have indicated growth in sales as compared to March 2023 sales level with the highest in South India signaling a growth of 9%, while West India indicated a growth of 8% followed by North and East India signaling a growth of 7% and 6% respectively. 

In categories, sports goods reported a growth of 11% followed by apparel and beauty showing a growth of 10% each as compared to sales levels in March 2023.

The optimism is also visible as retail chains have resumed expansions across the country.

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