Impact of the closure of branded retailers in the US on Indian IT companies

Locked up many stores due to declining purchasing power of consumers due to Covid-19

The closure of retailers in the US is likely to adversely affect the operations of Indian IT services companies in the US. Some non-essential and luxury retail brands in the US are closing their stores and there are reports of layoffs.

Some of India's leading IT service companies are serving a number of major retail brands in the US. The rise in unemployment in the United States due to Covid-19 has affected consumer purchasing power. Given this fact, retail brands are cutting back on their costs, said one analyst. Retail brands also plan to cut their own IT budget for the current year. There were recent reports that a well-known American luxury fashion retailer had closed 40 of its stores. Not only that, he has also applied for bankruptcy due to Covid-19.

The spread of the coronavirus has led Americans to avoid unnecessary spending, and their offline purchases have declined.

The use of software used for billing, data management and application testing in retail stores is expected to decline by 30 to 40 per cent in the next two to three months, the analyst said.