The retail sector in Jammu & Kashmir (J&K) is facing multifaceted challenges today. One of the visible pointers are the festival times. On the eve of Eid ul Azha, retail market federations and associations have been highlighting the demand slump in the last few days, reinforcing the message that there are fewer buyers now in the traditional retail market.
The rise of the online shopping market, high inflation, lower purchasing power, and reduced disposable income among the lower and middle classes are compounding the issues. These challenges are disrupting the retail supply chain, severely affecting retail shop owners, distributors, forwarding and commissioning agents, and even the real estate and rental markets. To alleviate the situation and curb the crisis of joblessness, accumulating debts, and the unfolding real estate slump in J&K it is imperative for both the government and the organized retail sector to devise strategic policies without losing time.
The surge in online shopping has dramatically altered consumer behavior in J&K and elsewhere. Convenience, competitive pricing, and a wide variety of products have led more consumers to prefer e-commerce platforms over traditional shops. This shift, which is not limited to J&K, and is a countrywide phenomenon, has resulted in a significant decrease in foot traffic and sales for local retail shops.
For the lower and middle class, already grappling with financial pressures, discretionary spending has taken a hit, directly impacting retail sales. With less money to spend, J&K’s households are prioritizing essential goods over non-essential items, leading to a decline in retail revenues. Reduced disposable incomes mean less spending on retail, further contributing to the sector’s woes.
Consequently, local retailers and distributors are struggling to compete with the low prices and convenience offered by online platforms. Many are facing reduced sales, leading to financial distress and, in some cases, closure of businesses.
The decline in retail businesses has led to higher vacancy rates in commercial properties, causing a slump in real estate and rental markets. Property owners are facing difficulties in finding tenants, leading to decreased property values and rental incomes.
Talking solutions, the government should consider tax incentives to local retailers to help them compete with online giants. This could include reduced GST rates for small retailers. Improving logistics and transportation, especially on the Srinagar-Jammu national highway can help reduce costs for local retailers and distributors, making their operations more efficient and competitive.
Retail sector in J&K could also explore their own online platforms where they can pool their product range, collaborate, offer competitive prices while maintaining physical stores. This hybrid model can help in these circumstances and retain customer loyalty and expand market reach. J&K’s retailer will also have to embrace innovative ideas and approaches to remain releavt. For instabce, they can engage with local consumer communities, through loyalty programs, local sourcing, and community events to offer good quality and competitive products. This could help build stronger relationships with customers, who, otherwise, are generally not happy with the way shop owners treat them, especially in Kashmir. Jammu’s retail work culture, in contrast, is seen more professional and customer friendly.
When it comes to bank loans and debt restructuring, fnancial institutions should also consider offering debt restructuring options to struggling retail businesses, providing them with the necessary breathing space to stabilize their operations.
Similarly, access to affordable credit and microfinance can help small retailers manage cash flow and invest in business improvements. The path to recovery may be challenging, but with strategic interventions, the retail sector in J&K can emerge stronger and more resilient.
