Mom & pop stores decide to go snazzy

FDI
The government's decision to open up FDI in retail has prompted several 'mom & pop' stores to pull up their socks. A major experiment is underway in some parts of the country to revamp the way in which small stores function.

Dowdy kirana stores are giving way to snazzy super bazaars in Nagpur where a pilot is in progress under the aegis of the Confederation of All India Traders (CAIT). The goal now is to replicate this model in other cities. A CAIT meet in Jaipur is slated to be held on December 16 and 17 to decide the future course of action.

The CAIT, a trade group that represents 50 million local businesses, says global giants such as Wal-Mart are not welcome in India because their "deep pockets and enormous resources" will wipe out local retailers.

"We have to oppose FDI and we will continue doing so. But let us be realistic. We will not be able to stop it but only stall it," said BC Bhartia, president of CAIT, whose family owns a large department store in Nagpur.

If FDI in retail is delayed by another two years, the small shops can prepare themselves to give Wal-Mart and Carrefour a good fight, he feels. CAIT is also planning to tap several agriculture produce market committees in Maharashtra to evolve the concept of new formats for smaller stores.

Independent retailer, known locally as kiranas, dominate India's retail market — holding a 93% market share over corporate retailers at 7%, according to consultancy firm Technopak Bhartia has been reading up on Wal-Mart and CAIT's research wing has been working on getting every detail on operations of large retail chains to provide tips to small retailers. Using this material, CAIT has created a syllabus for the schools that it has been conducting in Delhi and Nagpur.

Bhartia and fellow traders have registered a new private company called Grahak Super Mart last year. The objective is to make Grahak Super Mart a retail chain managed on the lines of a co-operative. Member-shopkeepers will be franchisees of the mart, displaying its logo on their signboard.

The shops will have smartly-dressed attendants. Boys will wear trousers and t-shirts, while there is still debate on whether girls should be dressed in skirts/trousers or salwar kameez, he said.

Today consumers are put off by the ambience in existing stores and, therefore, prefer going to larger retail chains. Delhi-based training institute Receptive Acumen Skill Development has been hired to conduct orientation sessions for shopkeepers.

The big chains leverage their size to get huge discounts from producers and manufacturers and are thus able to sell cheap. Grahak Mart plans to replicate this by centralised procurement, processing and packing of loose provisions, besides sourcing packaged goods directly from manufacturers at the discounts available to big retail chains.

Does that mean smaller retailers are okay with large retail chains entering India? No, said Kirti Rana, director, APMC, Navi Mumbai. Rana who has been instrumental in mooting a 'farmers-to-market' terminal market project in Navi Mumbai said a level playing field is required for smaller retailers to sustain themselves. Traders are being dismissed as middlemen when they are specialists, he said. According to Bhartia, small retailers are not permitted to store over a 100 sacks of grain in their stores.

The strategy will be two-pronged, said Bhartia. Agitate to stall the entry of large retail chains and educate the smaller retailers on the need to spruce up and improve their functioning and marketing to sustain themselves. Bhartia hopes that clarity would emerge from the meet at Jaipur where 100 trade body representatives are expected to converge.

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