Experts, however, say in a market like India both modern and traditional retail can co-exist.
The next door kirana store guy is a worried man. The sentiment among his trader community is that in the coming years they will have to struggle to retain and increase the number of customers as floodgates to foreign retailers have been opened.
The debates over FDI in retail has painted an unnerving mental picture of Wal-Marts of the world opening stores in droves and knocking kiranas out of business. This picture, in a market like India where organised retail is young and just 7% of the overall retail market, is exaggerated and far-fetched. But traditional mom-n-pop stores continue to worry.
“When foreign retailers come here, we will have a tough time. How can we compete with their size, options and prices,” says Gopal Dave who runs a general store in Lower Parel.
Largely, most kirana store owners DNA spoke to had two main concerns — price wars, as big retailers will be able to command bargaining power with suppliers and vendors, which could mean customer loyalties will shift to modern retail for better pricing and experience, and walmartisation and its effect of leaving them redundant.
A few hundred kiranas in the country have already started upgrading their stores to appeal to customers. They have also improved their product assortment and availability by observing modern retail outlets.
Two kirana stores’ owners in Vashi say they pick the ‘buy one get one free’ packs of different items at stores like D-Mart in their locality and then sell the packs individually to earn more.
Somewhat of an oxymoron?
Consumer goods companies, analysts, consultants, and retailers have time and again said that both modern and traditional retail can co-exist in a market like India, where free home delivery and the option of credit form the backbone of the unorganised industry — something no modern retailer can offer. There are 1.2 crore unorganised stores in the country, and experts say, not one store has had to shut down as a result of competition from modern retailers.
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