“THE POLITICS OF ORGANISED RETAIL WILL BE SHORT-  LIVED”

By Rajendra K Aneja

The time for retailing in India, as an organised industry, has arrived.

Indian retail should be granted industry status immediately. There need not be any second thoughts or guesses on this. Retail is poised to be one of the largest employment avenues in India. This will enable provisions of various industrial and labour laws to be applied to the retail industry also, which will help to manage businesses more pragmatically and systematically.



Advantages of modern trade, and its recognition

If India, with a population of over a billion, enters the retail market, it will have an explosive impact in terms of creating employment and payment of taxes. It will strengthen the economy. The government, too, will become rich, with all the tax revenues! At the same time, it is my firm view that the retail sector should be made tax-free for a decade, to foster investment.

Modern trade, in terms of hypermarkets/supermarkets, also improves the quality of service and augments the range of products to consumers. A store like Ikea offers thousands of economically priced products, including furniture and storage spaces, which can revolutionise daily living for the middle and lower income segments of our society.

Supermarkets, being in the organised and visible sphere, pay taxes diligently, unlike many small private traders. They are governed by labour laws, unlike smaller traders who hire and fire staff at whim. Supermarkets also have tremendous potential in India. The market spending is estimated at over USD 300 billion.

Employment generation potential 

An average grocery supermarket generates about 5-7 direct jobs per store of 1,000 square feet. For every such job created, there are about 7 jobs created indirectly – transporters, drivers, loaders, watchmen, etc. So, for every 1,000 square feet of retail space created, about 35 to 50 new jobs would be generated in the economy. A store of 100,000 square feet could generate about 5,000 jobs. India could easily do with about 10,000 such stores, thus creating 50 million jobs! And this could happen in about 10 years. When did India manufacture such large-scale employment ever in the past?

Consumers are assured of good-quality products and hygiene, because hypermarkets clean, grade and merchandise their wares like fruits and vegetables prior to displays. One of the biggest nightmares in India is to shop for vegetables and fruits. They are generally sold on pavements, coated with dust and soot. It is a visual delight to visit the fruit and vegetable section of a Carrefour or a Geant. Products from a dozen countries are washed, cleaned, graded and merchandised attractively.

Supermarkets offer competitive prices to consumers. They buy in bulk, and are able to negotiate better prices from farmers and suppliers. Since the supermarkets are very competitive, savings are frequently passed on to consumers.

Staff who work in the professionally managed hyper/supermarkets undergo regular training and development, which help enhance their skills. This also results in improvement of customer service. If the staff working in such stores perform well, they can develop long-term careers in retailing – that is, literally graduate from being floor salesmen to managers.

Socially responsible policies

As supermarkets and retailers grow, they also follow socially responsible policies. Marks and Spencer follow very sensible policies; to illustrate, when they select a new supplier, they first check the toilets and dining facilities of the staff. Only if the supplier clears this acid test, they proceed further. Which small trader even thinks of toilets or food for his staff? They are only pivoted on the cash in the till, at the end of each day. Professional retailers ensure they provide meals, cafeterias, and medical benefits to their staff.