Experts closely screening the retail industry feel that small kiranas in the vicinity of corporate retailers should incorporate alterations in their mode of operations to counter the competition from their deep-pocketed rivals.
The Indian Council for Research on International Economic Relations (ICRIER) study, commissioned by the Indian government, says that kirana stores situated in the vicinity of big retail chains will be the first ones to be hit by the rapid expansion of organised retail.
The report further said, “Structural changes in organised retail will surely start affecting a large number of nearby small retailers at some stage, be it after one or two decades, especially when the overall size of the organised retail in food reaches about 25 to 30 per cent.”
Suggesting solutions, Arvind Singhal, chairman, Technopak Advisors, had told Indiaretailing that the small retailers should be confident of their strengths and relevancies, and not be afraid to experiment with the looks of the store. According to him, “They should also adopt unique strategies to counter the high growth rate of the organised players. Traditional retailers won’t die in the country.”
Dharmendra Kumar, director, FDI Watch in Retail, echoed the same, saying, “Small retailers will survive in India if only they form cooperatives and stay united.”
Indiaretailing had earlier reported Rajiv Kumar, director, ICRIER, as saying that the overall impact of organised retail will be positive and small traders can compete with their bigger counterparts in the long run.
The report, suggesting solutions, said that for evolving an inclusive model for organised retail, big stores can co-operate several kirana stores and hawkers drawn from the pool of traditional retailers, and upgrade them with adequate infusion of capital and training.
ICRIER was approached by the commerce ministry last year to conduct a study on ‘The Impact of Organised Retailing on the Unorganised Retail Sector’.