Retail giants; A problem for small retailers

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Mumbai: Global retail giants like Walmart are knocking at India's door to cash in on the huge retail opportunities.Carrefour and Tesco may follow Wal-Mart in entering India, as economic expansion and greater disposable incomes in the hands of a burgeoning middle class make the nation attractive for local and foreign retailers.But how will their emergence affect the small general stores?

Fifteen years back, Gajanan Narkar started a kirana shop near Lower Parel station with the hope of having a long term business option. And the news of global retail giants entering India's markets does not make the 48-year-old too happy.

Business was fine till malls started springing up in this upcoming business district. Now, Narkar has removed his two employees and inducted his wife and son to run the shop.

"Malls are able to buy directly from the manufacturer and therefore able to give good discounts. We have three to four layers of distributors," says Narkar.

A study conducted by retailers at four places in Mumbai shows that 71 per cent of small businesses sampled reported falling sales.

Grocery stores fared the worst with 87 per cent reporting lower sales while 92 per cent said their children will not continue the business. Retailers say the biggest reason for their downfall are the huge discounts given by malls.

"We have to buy from wholesaler and masjid bunder. We cannot sell below MRP and so, our business is going down," says Secretary, Mumbai Vyapari Mahasangh, Ashok Vaykul.

But big retail outfits say given the size and population of India, there is a big enough market for all players—be it big or small.

CEO-Retailers Association of India, Gibson Vedamani said, "We have to look at customers ideally. They have to be given proper bargains and good service."
 
But small retailers are not giving up so easily. They plan to gang up and deal directly with the manufacturers so that they can squeeze out bigger discounts and become attractive to consumers.

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