Guys.. interesting stuff that i came across in today's 'Business Standard'... two articles..
one stating that "Big retail has small impact on mom-n-pop stores: Study by Indian Council for Research on International Economic Relations (Icrier)" and the other "Local traders refuse to buy Icrier logic"..
i have read and consolidated both.. Am including the main highlights and extracts here (cz both of these articles are very big), so that you all can have a precise read on it.... again, hoping it helps...
The growth of organised retail headed by large corporations does not significantly impact small mon-n-pop retailers, a long-awaited study by the Indian Council for Research on International Economic Relations (Icrier) concluded. The study conducted for the government, following allegations that big retail was squeezing neigbourhood retailers out of business, showed that the latter's turnover and profit dropped 8 to 9 per cent initially, but the adverse impact weakened over five years.
Significantly, the report states that a total of 151 small shops have closed down over a period of 21 months, which is about 4.2 per cent of annual closure of retailers. However, only 62 of these shops attributed their closure directly to competition from organised retail. Icrier Director and CEO Rajiv Kumar said the turnaround occurs as unorganised retailers adapt to the new challenge and formulate their own strategies in terms of technology upgrade and improvements in the supply chain.
The findings are likely to ease pressure on the UPA government, which has been warned by the Left parties not to succumb to the temptation to open up the retail sector to foreign investment.
As much as 49 per cent of 1,999 sampled small retailers reported a decrease in turnover, while others reported no change or even an increase. The highest impact has been felt in west and north India.
In terms of product categories, the impact has been greater in textiles and clothing shops (46 per cent of the sample), and the least in fruit and vegetable hawkers (34 per cent).
The study originally covered only the four big cities. Subsequently, ICRIER was asked to increase the sample size. Eventually, the field survey, conducted by Development & Research Services, covered 10 cities, 2020 unorganised retailers, 1318 customers, 100 intermediaries and 197 farmers. However, the report cautions that the results are not indicative of the countrywide scenario, but only of mega and mini-metro cities around a limited number of organised retail outlets.
"For the country as a whole, unorganised retail is growing at a reasonable rate and will continue to do so for many years to come. Yet, it is clear that demand growth for retail is likely to substantially exceed any possible supply response from unorganised retailers", the report adds. The report forecast that India's overall retail sector will grow 16 per cent a year, from $322 billion in 2006-07 to $590 billion by 2011-12. Within this, unorganised retail, which accounts for nearly 96 per cent of the market ($309 billion), will grow 10 per cent annually to reach $496 billion.
In contrast, organised retailers will grow at 40 to 50 per cent a year to expand market share to 16 per cent by 2011-12.
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This is what the study had to say.. Organised retail chains have welcomed Icrier report for supporting their stand that their operations have little impact on mom-and-pop stores. Trade groups opposing big retail chains, however, say the report does not give the true picture.
ARGUMENTS: FOR: "The country has a large retail market and is growing at a healthy rate. We believe everybody can co-exist and do not see much impact of organised retail chains on neighbourhood stores," said Mohit Khattar, president, Subhiksha, a food and grocery retail chain. Khattar says farmers are one of the biggest beneficiaries as retail chains go to them directly and make upfront payment, which is not the case with wholesalers. "Since we buy directly and eliminate middlemen, we can price our products lower," Khattar added.
Venugopal Dhoot, president of industry body Assocham, said big retail could benefit youths as it offered better jobs and salaries. "Ultimately, somebody has to take a hit in the larger interest of the nation," said Dhoot, whose Videocon group plans to set up cash-and-carry stores across the country in the next couple of months.
AGAINST: Local trade bodies and industry associations say kiranawalas have been hit by big retail chains. "You forget about the long run. Small traders will be finished within the next few years if big chains are allowed to expand. In Western countries, retailers can depend on external capital and government support. But in our country, they have to depend on their own capital and family members," said Mohan Gurnani, president of the Federation of Associations of Maharashtra.
Guys, if these articles are annoyin or boring, pls lemme knw.. i wil stop posting it.. i thot its good to share it wid u guys.... i appreciate ur feedback (bas maarna mat muje..
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