Though politicians are fighting pitched battles in the name of protecting livelihood security of small traders and street vendors, a large number of consumers favour organised retail over traditional kirana (mom n pop) stores, according to findings of a ICRIER (Indian Council for Research on International Economic Relations). ICRIER was appointed by the Ministry of Commerce & Industries to go into details of impact of big business houses entering retail on small trade.
According to findings of the study reported by LiveMint, while, a whopping 50% of small retailers surveyed reported lower sales and 61% of all retailers pointed to competition from organized retail for their declining financial health, any adverse impact of organised retail on mom-and-pop stores will wear off over a period of time. Organised retail, the report has said, will not lead to job losses and will, in fact, raise farmers’ earnings.
The survey also covered 500 customers who shop at both the branded and small retail stores.
Among the main reasons cited by customers for preferring branded retail, 32% said they like better quality of products, while 26% liked lower prices/ higher discounts. Among other reasons, 22% said, they get more brand choices, 22% liked convenience of one stop shopping, 20% said they get fresh stocks. 17% liked wider product choice, 16% felt that they get better service, 15% preferred sales promotions, while 13% were attracted by attractive displays.
Among the reasons cited for preferring unorganised shops were: proximity to home (50%), goodwill (29%), credit facility (27%), bargaining (23%), lower price/ discounts (22%), smaller/ loose quantities (20%), saving of time (20%), better product quality (17%), convenient timings (17%), and home delivery (13%).
As regards savings, those having household incomes of less than 10,000 per month saved 10%, those with incomes between 10,001 and 20,000 saved 7%, those with incomes between 20,001 and 50,000 saved 3%, while those with income over Rs. 50,000 saved 2%. The overall savings were estimated at 4%.
While, 71% of those already shopping at branded stores preferred opening of more branded stores, 34% of those shopping at small neghbourhood stores wanted opening of more branded stores. Unfortunately, 41% under this category did not have a choice.
Click here
Click here
1 response so far ↓
Mahadevan Sundarraj // Dec 14, 2007 at 10:29 am
Interesting article, but a very limited sample.
We are talking about a nation of 12 Million shops, and even if one ignores the small temporary store like the pan-shop which opens only for 3-4 hours a day, you still have about 5-6 million stores in this country.
To base such a serious judgement over a 500 consumer survey, all of whom I suspect would be SEC A, is a gross dis-service to the size and diversity of our market.
A more insightful piece (but without much data) is perhaps available on your own site under cafe economics, written by Niranjan Rajadhyaksha (Cafe Economics), under the title, A Nation of Shopkeepers, on May 03,2007, which I find great resonance with.
Leave a Comment