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Retail chains - good or bad?
Written By murali772 - 25 March, 2009
Bangalore Retail consumer issues Analysis Economy
Are hawkers losing out to corporate and chain stores? India FDI Watch and Action Aid, which studied the immediate and future impact of corporate and chain retails on hawkers, showed that hawkers' business is declining in areas of Bangalore they surveyed.
These NGOs told reporters on Tuesday that among those surveyed, 96% of hawkers and 90% of shopkeepers said their business was falling and 99% of hawkers and 72% of shopkeepers blamed it on new corporate and chain stores.
Vinod Shetty, director of the community-based organization ACORN (India), said: "Competition from new corporate and chain retail stores was the number one reason cited by respondents for decline in business. It's a direct threat to vulnerable sections of society.''
"In addition to hardships associated with illness, disability and death, hawkers deal with increased harassment and eviction drives of late. In the city, 100% of respondents said they paid regular bribes to the police and 97% said they paid municipal officials,'' Shetty added.
The study calls on policymakers to support crores of independent retailers across the country by maintaining FDI restrictions in the retail sector, preventing foreign retailers from entering the market through wholesale cash and carry, and banning corporations from engaging in retail trade.
Shetty added: "We have pledged not to support any political parties in the Lok Sabha elections unless their candidates take a stand for independent retailers.''
For the full report, click on:
http://timesofindia.indiatimes.com/Cities/Bangalore/Hawkers-losing-out-to-retail-chains/articleshow/4311481.cms
Now, I would like to believe that the ones directly affected by the retail chains are the kirana shops. As far as the hawkers are concerned, their battles have been with the kirana shops, and continues to be so, apart from those with police and municipal authorities. So, the coming on of the retail chains hasn't made any difference to them. Their plight is indeed quite sad, and there is a lot of sympathy for them. But, that's a different issue altogether, and needs to be addressed separately.
By clubbing the hawkers' plight with this issue, with the talk about 'the threat to the vulnerable sections of society', the Vinod Shetty's of this world are essentially using them as a proxy in their attempts to stymie, what I would consider, a healthy development whereby the middlemen get eliminated benefiting the producers and consumers in the process.
My wife now makes a regular monthly visit to SPAR in the Oasis mall in Koramangala, and she's generally thrilled with the overall bargain that it is turning out to be, and in a pleasant ambience. For the everyday needs, however, she depends on the local kirana shop. So, all that's needed of the kirana shops is to change the approach slightly. It can be a win-win for all, except of course the middlemen.
Muralidhar Rao
COMMENTS
idontspam - 23 November, 2011 - 12:46
I prefer the small shop round the corner for daily needs than the big mall.
Without going into the ideological aspect, we need to be given that choice & not forced to the small shop. I have moved over the last 6 months from the street vendor to a large chain on sunday mornings because I get them cheaper & fresher perishables there at that time. Rest of the week the street vendor has fresher perishables & I wouldnt step into a chain store. I have moved to organic food from a neighbours farm for most cereals & spices.
srinidhi - 23 November, 2011 - 13:42
eating local foods also reduces the related carbon foot print..so suggest dump those wax coated washington apples and kiwi fruit..and eat the guava..its more nutritious than both!!
its oranges season now..fast on them..after all they are not coming with a sticker!
kbsyed61 - 23 November, 2011 - 17:49
Retail Chains would be part of Indian Market whether one likes it or not. This phenomenon is not exclusive to the grocery markets. The change is taking place in all aspects of retail market - Clothes, Automobiles, Diary/Poultry etc.
Why only crib about Kirana Angadi? No sympathy for tailors, Mechanics who lost out to Ready Made Clothes, Company Service Stations?
The questions of comparing organic Vs Non-Organic, Straight from Farm Vs from Cold Storage deserves a different debate than the question in this post.
A comment from SB is really a thought provoking and to me, answers all the pertinent questions posed in this post.
There are realities that we seem to overlook when trying to respond to the questions posed. The reality is journey of farm produce (grains, veggies and fruits) from farm to the consumer hasn't been institutionalized. The supply chain mechanisms that defines this journey is still to gain maturity. In some areas none exists. The only entity that rules in this space is 'Middleman'. One biggest truth in our current times is farmers are not getting the return on their investment. One would wonder how come with such high spiraling food prices, why is that the producer is not getting his share of the pie? Due to this one reason I know personally, farmer's have stopped farming and agriculture.
Coming to question the of retail Vs Kirana store, each one must have the space to do business. Kirana stores including Mom & Pop stores can not expect to flourish without competition from bigger entities. Big one must also adhere fair market pracrtices. That is part fo the life and market. Like SB has pointed out in his comment, smaller entities have to find that niche in their business to compete with the big ones. if they can provide the value to their customers can't see why they would lose out. Small one must innovate and make themselves relevent. Can't expect to continue in an unorganized and uncompetitive terms.
To Srinidhi's question of local produce, nothing stops the retail chains or Kirana stores to market these items. Let the best service provider win the game fairly and square.
abidpqa - 25 November, 2011 - 07:47
Organized big retail restricts the choice of the farmer. They may be asked to plant a particular variety of plant. If it is not done, the farm products maynot be bought. As in the example of tomatoes in Brahmayya's post. This destroys the biodiversity. I liked buying rice from the ration shops because each week, we used to get a different kind of rice. The diversity may not be lost because they will be stored by the corporates to relese at a high price when the tastes of the people change. Wholesalers buy lower qualities and different varietes.
The big retail restricts the freedom of the producers. The suppliers may need to supply minimum, say 10000 pieces per month, of say shoes. If someone produces 3000 shoes they are denied access. The manufactureres are also forced to produce mostly lower quality so that there will be more sales. HIgher quality may not be available because of the power of the retailers. Again wholesalers buy smaller quantities.
There are advanatages to big retailers because of their bigness. They are able to predict the markets better because of the quantity of data available to them which the customers give them actually and play in the forward markets. The last place the onion prices came down is the big retailers.
The consumers may benefit if they respond to the strategies of big ones. If they have a software to track the consumer, we plan our behavior so that it will be difficult for them to track (develop a software for that :) ). Pay cash, dont use cards as far as possible. Distribute purchase into different categories with quotas for Indian, foreign, local products, etc. There is also dificulty in identifying big retailers because they are present in many formats. like big hypermarkets, malls, brands owned by big retailers, and big companies with smaller stores like Mahindra, Godrej. But overall my view of big retails is negative.
There are still farmer suicides, food price inflation, etc. after the big retail came in.
Dr J P welcomes FDI in retail sector
murali772 - 22 November, 2011 - 09:40
Lok Satta Party President Dr. Jayaprakash Narayan has said the Union Government move to permit foreign direct investment in the multi-brand retail sector is “great news and long overdue”. It will benefit the farmer and the consumer, and stimulate the economy, Dr. JP said in a media statement issued here today. - - - “Now a farmer gets Rs.18 a kg for the rice he produces while a consumer pays Rs.30 – 35 a kg. - - - - A farmer gets only 35% of the consumer price of vegetables & fruits. “Retail chains will remove middlemen, add value, eliminate wastage and shortages, ensure stable prices and help farmers and consumers. Let us shed fears and welcome FDI in the retail sector.”
For the full report click here.
Rare to see political leaders take an uequivocal stand. In that respect, and not just that, Dr J P stands out as a different politician, the like that we need in today's world.
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