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entertainment, leisure and eating-out needs
fter 60 years of unorganized
of the consumer. By the end of 2007, 700
retailing and fragmented kirana
malls are coming up all over India, of which
stores, the Indian retail industry has
40% are concentrated in the smaller cities.
finally begun to move towards
While organized retailing is growing at an
modernization. New marketing formats like
annual rate of 35-40% in large cities, it is
departmental stores, hypermarkets,
growing at 50-60% in small towns. Major
supermarkets and specialty stores are
players are also preparing themselves to take
spearheading the modernization drive. The
on the competition from the global players
annual growth of department stores has been
like Wal-Mart and Metro. Reliance is coming
estimated at 24%, which is faster than overall
with a massive investment in retail sector.
retail; and supermarkets have taken an
They are planning to invest US$5.6 billion to
increased share of general food and grocery
open stores in 1,500 towns and cities. Sunil
trade over the last two decades. Food and
Mittal's Bharti Enterprises, which has
grocery segment is growing, which accounts
announced its franchising agreement with US
for largest share of retail spent by the
retail giant Wal-Mart to start a chain of retail
stores in India, has said that would invest stores have continuously increased for the
about $7 billion dollars in it by 2010. past 60 years. Only 4% of the retailers in the
unorganized sector have shops that occupy
With such investments coming into the retail
more than 500 sq ft. In a way, small retail
market what will happen to the kirana or
business in India helps absorb about 6 to 7%
Mom & Pop stores of India. Will they be able
of the huge mass of the unemployed.
to withstand the onslaught from big players?
To study the impact of retailers on the mom
and pop stores we need to can analyze the
INDIAN RETAIL STRUCTURE impact of Wal-Mart in USA. Wal-Mart Watch
features an academic article claiming that in
Iowa, Wal-Mart’s expansion has been
Retail Formats 2004 2005 responsible for widespread closings of ‘mom
and pop’ stores, including 555 grocery stores,
Total Grocery 5,170,70 6,037,73
298 hardware stores, 293 building suppliers,
Outlets 9 8
161 variety shops, 158 women’s stores, and
116 pharmacies. If these figure are anything
Traditional grocery 4,525,264 5,273,310
to go by then Mom and Pop stores are going
outlets
to face tough times ahead.
Supermarkets 175 2,314
MOM AND POP STORES
Other grocery 645,270 762,114 Let us analyze the characteristics of Mom and
outlets Pop Stores.
Cosmetic stores 105,204 129,685 advantage over a retailing giant. MAP stores
usually are the places where a customer finds
intimacy, ubiquity and neighborliness in the
The above table shows the retail structure in way the shopkeeper interacts. The
The analysis clearly shows that the retailers Mom and Pop store should be looking to
are at a distinct advantage vis-à-vis Mom and develop themselves as a specialty store. This
Pop stores. The question arises what should will help them to focus on a single line of
the small stores do in order to respond to the products and as a result in improving the
restriction on foreign retail players in India. Finally the Mom and Pop stores should keep
They have managed to get support from the on leveraging the customer relationship the
political groups as well. But this is only a store has developed.
short term measure to avoid the competition.
WAY AHEAD FOR ORGANIZED RETAILERS
The best way ahead for Mom and Pop stores
Organized retailers have been trying to
is to learn from the organized retailers and
improve the customer relationship by
try to incorporate features which are feasible.
emulating Mom and Pop Stores. The stores
First of all they need to improve the
intentionally make the setting of a wholesale
processes. Careful inventory management
market than a sophisticated shop. For
needs to be done by these stores to reduce
instance the retailers hire people who scream
losses. Also the stores need to improve their
and sell the products like vegetables. They
make provisions for customers to get
products on credit.
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