Supermarkets turn knights in shining armour

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Supermarkets are registering surging sales amid people's quest to discover a more sanitised place than kitchen markets to get foodstuffs and household products in these times of coronavirus.

With more than 250 outlets scattered across Dhaka, Chattogram and other big cities, supermarkets have posted 50 per cent spike in sales since Bangladesh reported the first confirmed cases of coronavirus on March 8, according to operators.

"Customers are feeling convenient arriving at supermarkets," said Kazi Inam Ahmed, president of the Bangladesh Supermarket Owners' Association (BSOA), adding that there's been an upsurge in orders via phone and internet too.

The sector's sales figure, representing about 40 brands including Shwapno, Meena Bazar and Agora, is not available as the association will not maintain such data, said Ahmed, a director of Gemcon Group, the parent company of Meena Bazar.

This was a fantastic month for the country's supermarkets as many of them have been struggling for years to stay afloat in the high volume but low margin business by competing with thousands of small retails which have less operational expenses than superstores and will not have to collect 5 percent value-added tax (VAT) from customers' shopping bills.

The soaring sales come as supermarkets owners made a decision to keep their stores available to serve people following the government declared an over-all holiday and started enforcing a stay-at-home order all over the united states to slow the spread of the deadly disease and shop owners in malls and markets decided to shutter.

"As something industry, we made a decision to remain open to stand beside the persons so that they can get essentials without the hassle of going to your kitchen market," said BSOA General Secretary Md Zakir Hossain.

By keeping stores open with safety precautions including the scope of sanitising hands at the entry, ensuring safety gears for salespersons on the shop floor and demarcating areas to make sure social distancing among customer, supermarkets could win the confidence of customers beyond their regular ones.

"Sales increase was our definitive goal when we made a decision to stay open. But it is good to see that the customers' occurrence has increased. It would appear that the whole industry is turning towards the direction of profitability," Hossain added.

Sabbir Hasan Nasir, executive director of ACI Logistics, the parent company of Shwapno, the country's biggest supermarket chain, echoed exactly like others.

Citing preliminary sales data, he said Shwapno's gross sales stood at Tk 131 crore in March, which is 50 % more than normal.

Consumers mainly bought basic necessary items, hand sanitisers, soaps, detergents, cleaning items and frozen foods because the outbreak of the lethal pathogen in Bangladesh, said operators.

"We see clients coming to us due to health concerns. It implies that overall confidence on supermarkets has increased," said Murtoza Zaman, leader of Unimart, which posted 40 per cent month-on-month higher sales in March.

And the common customer purchase in addition has increased significantly during this period on uncertainty, the anticipation of an extension of shutdown and fear of unavailability of the required products.

Previously, the average customer purchase was almost Tk 2,500.

"It has become almost double that now," Zaman said, adding they are now seeing a supply crunch of baby food and cleaning items.

And when confronted with soaring demand and a portion of customers' effort to stockpile groceries, Unimart started rationing items such as masks, hand sanitisers in early stages, so that it might provide the items to all customers.

With four outlets in Dhaka, Unimart is relatively a more recent entrant in Bangladesh's organised grocery sector that started budding from 2001 because of Rahimafrooz, which provided an hygienic alternative to the hullabaloo and grime of the original kitchen markets.

Since that time, customers' turnout increased slowly but surely alongside the quantity of stores.

In 2019, the total annual turnover in the organised grocery retail sector rose 19 per cent year-on-year to Tk 2,300 crore, said operators, adding that the compound gross annual growth has been 24 per cent through the years.

Yet, the organised grocery sector makes up about 2 % of wholesale and retail trade as 5 per cent VAT on sales keeps many customers from superstores and is holding back the sector from expanding at a brisk pace, they said.

The coronavirus crisis has diverted a great number of shoppers to supermarkets from wet markets, which can pose health risks.

At this stage when the economy is plummeting and the income of several people is drying up, the exemption of VAT will certainly reduce the strain on the wallets of customers, especially the budget buyers.

"In this critical time, the government should exempt VAT. It'll be very much ideal for customers," Nasir said.

You will find a perception among a portion of revenue officials that only the well-off come to the supermarkets, Zaman said.

"Not absolutely all customers who shop at supermarkets are affluent. Which portion of buyers is under more financial strain as almost all financial activities are on pause," he said.

The federal government gets maximum Tk 60 crore as VAT from supermarkets, according to BSOA President Ahmed. "For all of us, it is extremely unfair as small retails do not have to pay the VAT."

Ahmed also urged the federal government to exempt VAT on the commercial space rent. Both moves would boost the supermarkets' foot traffic and help the nation to flatten the curve on coronavirus.

"Supermarkets could have expanded a lot over the years and served more people in these days of crisis, had the federal government waived the VAT on supermarkets."
Source: https://www.thedailystar.net

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