Kirana rules the retail pie

Mushrooming of malls, departmental stores, hypermarkets, supermarkets and specialty stores have given the Indian customers a world-class shopping experience. But Kirana stores or mom-n-pop stores are the least perturbed by these latest developments as Ind
Ruling retail

The new players in the organised retail market are not able to gobble up the share of the kirana stores. The benefits that an average kirana store offers to the middle class Indian household can not be compared with what the big retailers have to offer. There are a few factors that lure the consumers like, proximity, amicable relationship, free home deliveries and most importantly the credit system which makes the customers stick to the kiranas . An average Indian household still relies and shops from the next door kirana shops for precisely these reasons. 

According to Shakuntala Sarkar, Manager, Corporate Communication, Spencer’s Retail “Over the last decade, the share of modern retail has however been gradually improving from below 1per cent in 1999 to 4.1per cent currently. The growth has been more rapid 2004 onwards. Growth in consumption, coupled with the growing prosperity of the new-age consumers, steady economic growth and large scale real estate development is driving the growth of organised retail.”  

According to KSA-Technopak, a retail consulting and research agency, by 2010, the organised retailing in India will cross the US$ 21.5-billion mark from the current size of US$ 7.5 billion. The Indian retail market is of enormous size, about US$ 350 billion whereas the organised retail which is not that big is only at US$ 8 billion. However, there is a lot of opportunity for growth in the organised market. 

Unorganised retail sector is widespread
According to the figures provided by the Government in the Economic Survey, in 2005, 3.75 lakh people were employed in the private sector in wholesale and retail trade. Out of which 269 lakh are working full time workers and 24 lakh are marginal workers in wholesale and retail trade. It implies that nearly 3 crore people are dependent on it.  

According to Indian Council for Research on International Economic Relations (ICRIER), country’s traditional kirana (mom and pop) stores have been able to adjust to the emergence of organised retail in the country. Kirana or (mom-n-pop) stores have their own set of loyal customers; this small time family owned provisional stores are holding approximately 95per cent stake in the retail market.  

Reasons behind the cordial co-existence  
Mom-n-pop stores, despite the advent of organised retail are doing there business well, because customers derive value from both the organised retail and local stores.  

“Both the formats serve different needs of the same consumer in their own effective manner. For example, you may prefer a mom-n-pop store for frequent/daily purchases and a modern format for a more exhaustive purchase. You may make certain kind of purchases at a kirana store only, and may visit the organised format for a different set of purchases/products/brands. Kirana stores are preffered more as they offer the merchandise on credit, are in close proximity and have a strong personal customer relationship,” says Lokesh Aggarwal, Sr Vice President ( Operations ), SRS Value Bazaar.

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