In the recent times, lots of analysis has been going on around retailing in India. The retailing drive has been punctuated by Wal-Mart’s proposed collaboration with Bharti, as a back end logistics partner. But what is in it for we consumers? Everyone talks about the scope available in the organized retail sector, but how does it help us?
Firstly, we have to see whether this kind of a retailing model would work here. In US, almost every household has a car and they drive to the retail store located a little away from their home, for weekly purchases. But traveling some distance, just to get those stuff which one could very well purchase in the mom-and-pop store around their home, doesn’t make much sense. Also the lack of proper space in some shops makes one feel sick and waiting in a queue to pay for the purchase, just add to the woes.
Secondly comes the question of flexibility. Many of the middle class households are very much used to having account with the local stores. These stores maintain the accounts and purchases made during a month, can be paid back towards the month end. Though, only those who live in a locality for a long enough time will be able to avail this offer, they would lose it when they move to retailing stores. Ultimately, the rapport that one can develop with the local store, is lost in case of retail stores.
Thirdly a comparison between the total cost of items purchased in a retail store and a local store, works out in favor of local store in many cases. I would mainly attribute this to the overhead these retail stores incur in terms of rental space, electricity, employees, etc. Ultimately these expenses would be pushed to the consumers, when they really have nothing to gain from these overheads.
Already we are witnessing a large scale opposition to the Reliance Fresh stores in UP and neighboring states. But if you analyze the issue further, even if the retail giants are allowed in, there is only a little chance that it would eat away the mom-and-pop stores. A better strategy for the retail stores would be, to strike a deal with the local stores and merge them in to their model. This would ensure that the competition is suppressed and the consumer base of retail stores would improve 🙂