NEW DELHI: Major retailers, including Future Group and Reliance Retail, have reported that India's demonetisation has been good for business as they have been able to accept payment via electronic means.
Fourth quarter figures from Reliance Retail, which operates 3,553 stores across 686 cities, showed revenues up 47% on the equivalent period in 2015. Total sales at Future Group's food and fashion outlets, meanwhile, are reported to have jumped 20% since high denomination notes were pulled from circulation in early November 2016.
"This is because they [Future Group] are organised retail," explained Arundhati Bhattacharya, chairman of State Bank of India, in remarks reported by the Economic Times. "They are in a position to capture payments on electronic platform which gives them an edge."
According to Kishore Biyani, founder and CEO of Future Group, the proportion of card transactions at its outlets has risen from 65% of sales to 85%.
These stores have also been able to increase footfall by permitting customers to withdraw cash. "Allowing customers to withdraw cash by swiping their debit cards at PoS machines has become a regular practice," he said.
Reliance observed there had been a short initial period following demonetisation when consumers had been cautious about their purchasing but said there were favourable long-term implications from the move.
It further noted that its Reliance Fresh and Reliance Smart stores had grown faster than modern trade during the demonetisation period, with share edging up from 26.2% to 27.8%.
It remains to be seen whether those gains will be maintained as the situation returns to something approaching normality as more new notes flow into the system.
The limit on the amount that can be withdrawn has just been increased from Rs 4,500 per card per day to Rs 10,000 (although the weekly cap of Rs 24,000 remains).
Rajiv Anand, executive director at Axis Bank, said he expected all limits on cash withdrawals would be lifted by April 1.
Data sourced from Economic Times, Money Control; additional content by Warc staff