m


p Farm incomes in India can double if organized retail enhances farmer

realizations on food items.

p This will come about with improvement in the presently underdeveloped

supply chain for unprocessed food items.

p Higher farm incomes will

Benefit the vast majority of the nation's population.
Give additional purchasing power in the hands of farmers adding to GDP
growth.

p if farmers spend around 80 per cent of this incremental income, nearly 1.7
per cent of India's GDP will be boosted
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p Food and grocery (F&G) items account for more than 70 per cent of all retail
sales.

p The penetration of organized retail in the F&G segment is negligible at

around 1 per cent.

p Total avoidable supply chain costs in the F&G vertical in India are:
About 57 per cent due to avoidable wastage and
About 43 per cent due to avoidable costs of storage and commissions
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p In Hyderabad, the epicenter of the organized retailing revolution, the reaction
from kirana shop owners has been quite muted.

p There's room for everyone - street sellers and mom-and-pop shops, as well
as large chains.

p Advantages of kirana shops over malls:

They give credit and cater to people shopping on their way home from
work.
Practical for middle income group for day to day shopping.
Common people usually enter the mall only when there is a 50 per cent
sale.

   

p Geasons in support of kirana shops
Will continue to survive until organized retail becomes 18-20 per cent of
the total market.
fixed cost for mom & pop shops is abysmally low.
Presence of franchisee or licensing arrangements for multinationals.
High cost of production for multinationals, as they cannot source out of
India.
Big players offer to pay five times the rental for renting the shop as
franchisee.
p Negative impact on kirana shops
They will have to go to smaller and smaller niches, and find new ways to
survive.
If consumers can get veggies cheaper in an air conditioned retail outlet,
there is no incentive to visit the roadside vendor.
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ñ If voter well being is a good enough starting point for any politician, he
should encourage organized retailing. But politicians fail to understand this
number game.
ñ The closure of organized retail, citing law and order as the reason, is in
contrast with the very idea of what governance stands for.