Traditional family-owned retail shops are the backbone of Myanmar’s consumer market. Thus, any challenges they encounter from the COVID-19 crisis and corresponding policy responses have implications for the availability and affordability for final consumers. In their research, Ian Masias, Joseph Goeb, Isabel Lambrecht, Mywish K. Maredia, and Khin Zin Win utilize the findings from a phone survey with food retail shops in Yangon and Mandalay to assess how COVID-19 related challenges are affecting retailers in urban areas. They also provide policy recommendations to improve business conditions for food retailers and help them cope with the COVID-19 economic crisis.
You can view the full policy note by Ian, Joseph, Isabel, Mywish, and Khin Zin Win in English here and in Burmese here.
မြန်မာဘာသာဖြင့်ရေးသားထားသော စာတမ်းအပြည့်အစုံကို ဤနေရာတွင် ဖတ်ရှုနိုင်ပါသည်။
Background
As the final node in the grocery supply chain, traditional family-owned retail shops sell about 85 percent of all consumer goods in Myanmar. In the food and grocery sector, these retail outlets, including wet markets, account for 90 percent of all sales, with the other 10 percent accounted for by fast-growing supermarkets. Because of the importance of traditional retail outlets in the last mile delivery of a wide variety of foods to consumers, any challenges they encounter from the COVID-19 crisis and corresponding policy responses to contain the virus have important implications for the availability and affordability of food for final consumers.
Through a series of phone surveys with owners and managers of food retail shops in Yangon and Mandalay, the Myanmar Agriculture Policy Support Activity (MAPSA) is seeking to better understand the effects of COVID-19 shocks on Myanmar’s agri-food marketing system through the perspective of small-scale food retailers in urban areas. This blog post presents the findings from the first round of the survey conducted in early July.
Effects of COVID-19 on food retail shops
Restrictions on businesses In April 2020, lockdowns in Yangon and Mandalay closed non-essential businesses and restricted the movement of people within the affected townships. While food retailers were largely exempt from these lockdowns, 30 percent of shops experienced challenges due to a lockdown in their township and 18 percent reported experiencing challenges due to a lockdown on their street. However, restrictions appear to be easing (Figure 1). Only 16 and 8 percent of shops experienced challenges due to a lockdown in the last 30 days, and only 16 percent experienced a mandated shop closure during that time.
Travel restrictions were the most common challenge that surveyed shops faced. These made it difficult for shop owners and managers to reach suppliers and for customers to come to their shops. However, as previously noted, travel restrictions appear to be easing.
Changes in demand for food products Shops are experiencing large declines in demand across all food products (Figure 2). At least 50 percent of shop owners or managers reported lower demand for all food products, except for kitchen crops – potatoes, garlic, ginger, onion, and chili (47 percent). Over 60 percent of shops reported a decline in demand for the seven most common food products. On average, the estimated demand for all food products declined by an average of 30 percent. This suggests that consumers may be decreasing their consumption of luxury items or may be shifting to cheaper and less convenient sources.
Financial outlook Over 70 percent of shops reported fewer customers purchasing food and groceries and, on average, customers are purchasing smaller quantities of food and groceries compared to the same time in 2019. These lower sales translate into reductions in revenue for food retailers; over three-quarters of shop owners or managers reported that weekly food and grocery revenues were down by an average of 29 percent compared to the same time last year (Figure 3).
Adoption of safety measures At least one safety measure was adopted by 60 percent of the food retailers surveyed since the start of the crisis. The most common measures used were requiring employees to wear masks or face shields, wash their hands regularly, and maintain a safe distance from customers. Notably, 40 percent of shops did not adopt measures. Furthermore, as business restrictions were lifted in recent months and people felt more comfortable about the situation, dis-adoption has decreased over time and many safety measures have been removed
Policy recommendations
Based on observations of the current situation and the perceptions expressed by food retailers on what actions government might support to help them cope with COVID-19, the authors suggest the following short-term recommendations, many of which can be implemented under the COVID-19 Economic Relief Plan (CERP) of the Myanmar Government.
- Extend under CERP Action 2.1 deferrals on corporate income, commercial and payroll taxes, and social security contributions for small- and medium-sized enterprises beyond the initially targeted industries (tourism; the Cut, Make, and Pack garment sector; and hotels).
- Expand access to working capital loans under CERP Action 2.1.1 beyond targeted industries.
- Consider increasing the liquidity of urban households affected by the crisis under CERP Action 4.1. Doing so will enhance these households’ ability to purchase food and groceries and may mitigate some of the financial challenges affecting food retailers.
- Where possible, continue to ease travel restrictions and ensure the free flow of goods.
MAPSA is monitoring the impact of COVID-19 on key actors in Myanmar’s agri-food system. This blog post highlights one of the many recent surveys and policy notes that MAPSA has conducted to assess the emerging constraints that these key actors face and to mitigate the possible impacts of COVID-19 on rural livelihoods and food security. Additional blog posts are available highlighting MAPSA’s research on the impact of COVID-19 on key actors in Myanmar’s agri-food system. Surveys are ongoing, and findings and recommendations will be periodically updated.
Related blog posts
- Crop trading during the pandemic: Lessons learned in Myanmar (Late June)
- COVID-19 and business responses: How are Yangon’s poultry farmers adapting to the pandemic? (Late July)
- How COVID-19 affects agricultural production in the Dry Zone (June)
Ian Masias is a Senior Program Manager in the Development Strategy and Governance Division (DSGD) of the International Food Policy Research Institute (IFPRI), based in Yangon, Myanmar. Joseph Goeb is a Research Associate in the Department of Agricultural, Food, and Resource Economics (AFRE) of Michigan State University (MSU), based in Yangon. Isabel Lambrecht is a Research Fellow in DSGD of IFPRI, based in Yangon. Mywish K. Maredia is a Professor of International Development in AFRE of MSU, based in East Lansing, Michigan. Khin Zin Win is a Research Analyst in DSGD of IPRI, based in Yangon.
This blog post was prepared by Michael Wang, Mickey Leland International Hunger Fellow in DSGD of IFPRI, based in Yangon. The analysis and opinions expressed in this piece are solely those of the authors.
