LAHORE                  -               The official trade body of Pakistan’s retail sector has appealed the federal government to extend liquidity support amid the coronavirus pandemic crisis that is hitting the country’s economy hard.

In a letter to Prime Minister Imran Khan and his economic ministers, the retail sector’s official trade body, Chain Store Association of Pakistan, has expressed concerns over challenges to the entire sector, which it says if not met could lead to serious repercussions on the economy in coming months.

Contributing 33 per cent to the services sector and more than 16pc to the employment in the country, the retail sector is also the highest contributor of skill development and value addition in the economy, the letter states. One of the serious concerns is payment of salaries to the skilled and semi-skilled workforce.  The bigger the brand, the steeper the cost is. 

CAP in the letter has requested the government to provide direct wage support to 600,000 employees of the organised retail sector, arguing that it would be their first priority to retain their skilled workforce.

Retailers also asked for reduction in the GST rate up to 6pc arguing that businesses would no longer be viable at 14pc-17pc of GST rate with reduced purchasing power in the country.

On the working capital crisis, they propose all principal payments to be deferred for one-year and interest payments waived for one-year.

The association also proposed the government new low cost/interest free loans against the current assets only to retail sector (especially those companies that do not have existing loans) with the State Bank of Pakistan ensuring disbursement of new loans within 30 days.

CAP also demanded the government a direct wages support (partial if not full) to retain employees in their bank accounts/mobile accounts for three months.

Over 50 sectors are allied with the retail sector including spinning, weaving, tanning, dyeing, processing, stitching, assembling and packaging businesses. The commercial construction industry also relies heavily on the retail sector. Many service providers involved in transportation, logistics, HR, IT, chartered accountants, and advertising are closely linked to this sector.

Some of the leaders in this community who represent a lot of medium and small scale retailers spoke to The Nation about losses suffered due to the lockdown. The president of Liberty Market, Mr. Sohail Sarfraz Munj, expressed his doubts over the effectiveness of a lockdown. “A lockdown is equivalent to economic suicide” says Munj.

He further adds that businesses take the biggest hit in a shutter-down whether big or small. “ The public sector employees on fixed salaries don’t experience the loss of income as a common businessman or merchant does. As much as people like to believe that big businesses can sustain on their own in such situations, they are wrong. The bigger the business, the steeper the loss.”

Hafeez Centre Lahore President of, Malik Kaleem Ahmed, particularly highlighted the challenges faced by small shop owners. “Government should into consideration all those small business owners who were living off their daily income from shops. Lockdown is for their health safety but should they sit at home and instead die of hunger? The SafaidPosh has the most to lose.” 

Similarly, a relatively new entrant to the clothing retail market, Limelight, is facing the same challenges any big established clothing is facing . “Our business is relatively new to retail, but with a down-to-earth approach, we have been able to grow fast. None of this would have been possible without my team. We have pumped our savings into the business to pay them for last month but if the closures continue we do not know how we will sustain everyone.” He feared.

A local footwear brand, Stylo’s director, Huzaifa Siddiqui said,

“Our family has been in the footwear business for 3 generations and has always had a special emphasis in developing people into making something of themselves. Over the decades, we have built a vast franchise network of dozens of small entrepreneurs who employ a workforce of over 1500.”

Siddiqui hopes for a better future of this entire sector. “We are committed to support them for as long as possible and hope to all bounce back from this tough situation one day soon.” he expressed.