Even as citizens are coming to terms with the government‘s demonetisation drive, Future Group‘s Kishore Biyani says that cash payments at its retail chains have dipped and consumers are moving towards digital payment mediums.
Even as citizens are coming to terms with the government’s demonetisation drive, Future Group’s Chief Executive Kishore Biyani says that cash payments at their retail chains such as Future Retail have dipped and consumers are moving towards digital payment mediums.
Biyani said while sales dipped a day after the demonetisation was announced, it picked up in the days that followed. He said sales have been stabilising and cash transactions, which accounted for about 60 percent of sales, have reduced to 10-15 percent now.
The company’s supply is likely to get impacted but it's well-stocked for the next 15-20 days, Biyani said.
Below is the verbatim transcript of Kishore Biyani’s interview to Sumaira Abidi & Nigel D'Souza on CNBC-TV18.
Sumaira: It is pertinent to ask you this question because the pulse of the people really comes back to you. What is the impact as you see it on sales in the last one week and how long may this entire thing draw out?
A: What we saw on the first day was a significant drop of reaching sales level of 60-65 percent. However, from second day onwards it picked up and probably on Saturday and Sunday we were above budget and Monday was an exceptional day yesterday because of a holiday. We are now trending more towards achieving our numbers, but there is a pattern which has changed a lot. Cash used to be 60 percent of our business, 60-70 percent and cash is now only 10-15 percent of our business. So, people have moved to debit cards.
Sumaira: One of the reasons you may have seen is little surge over the weekend is also because there were a lot of rumours doing the round perhaps truckers are not being allowed within the city bound region therefore vegetable prices etc may either go up or may be in short supply as is for other daily essential commodities. Could that be the reason for this spike, I mean this week onwards what is the feedback that you are getting back from your dealers?
A: I believe that people are well stocked. We manage our entire supply chain and we have well stocked on all the essential items as well as other items. However, if you look at the pattern of our sales, the fashion merchandise is also selling well. If you look at our central numbers we have achieved a 100 percent numbers yesterday also and we did on Sunday also; Brand Factory has been in fact 10 percent plus, Sodexo have fashion in business, so we expect consumption to happen and people are already bankable, in a sense they have a bank account so we don’t see a problem there. We have also seen maybe a new trend wherein people are now wanting to spend money rather than store it and then go through the hassles.
Nigel: What kind of a damage do you see in tier I, tier II parts of the country and also could you tell us in terms of categories one would think that maybe categories like toothpaste etc doesn’t get hit? Give us your sense on the same?
A: I also believe that top 30 percent of India doesn’t get impacted or a people who have a bank account or a debit card in their hands are going to consume maybe will come back to normal consumption. Secondly, there is a move towards informal trade to normal trade and whoever has better stocks and are well stocked. So, we fall in that category. So, I don’t think we might get impacted on this. In fact we are hoping that even on a weekdays there should be much better than what we used to do earlier.
Sumaira: What about your own supply chain? Is there any impact that you are seeing, I mean Future Group itself may not be seeing few of footfalls etc but what about the people supplying to you is there any feedback from that end, is there any disruption there?
A: There are disruptions but since we have our own collections centre for our fresh fruits and vegetables, own collection centre for our agri produce, so we are quite well stocked in terms of 15-30 days. Definitely supplies will get impacted. I believe the normalcy should come about in few days and that should help us to augment further on this.
Nigel: How long do you think that this will take, in a few days you think that in 10-15 days we should be fine because supply chain as per what we hear is getting disrupted as per now?
A: There are market who have not been operating for a while. Traders are not doing business. There is a kind of a rhythm which has broken and to be very honest it is very difficult to predict at this moment when thinks will settle down. I believe more cash coming into the system will help things to settle down little faster.