The biggest concern for kirana store owners and other small traders is not the supermarkets but the congested parking and potholed roads in front of their shops. A yet-to-be-released national survey conducted by one of India?s leading think tanks says 42% of the respondents from the mom-&-pop stores cite lack of infrastructure in their market places as the biggest factor that harms business.

In an Icrier report, the threat from organised retail comes way down at 12%. High taxes and erratic power supply are close behind, at 11% and 10%, respectively. However, due to the perceived threat from the government?s decision to allow 51% foreign investment in multi-brand format retail companies, traders across the country went on a one-day strike on Thursday.

The results validate the anecdotal experience of shoppers in urban India. The lack of space for them and also for the shopkeepers crimps business drastically. The study, conducted between 2009 and 2010 across 1,068 stakeholders in the country?s retailing business, also found that small retailers were often unable to distinguish between an Indian modern retailer and a global giant or between a franchisee outlet and a foreign brand when they cite a threat.

The study conducted by Arpita Mukherjee and Tanu Goyal is a follow-up of the studies Icrier has been doing on the retail sector since 2008. It was designed to measure the impact of India?s possible opening of the sensitive retail sector to foreign supermarket chains. It was conducted in 13 tier I, II and III cities with the condition that each of the cities surveyed should have the footprint of branded stores.

The study was conducted among small shopkeepers, modern retailers, intermediaries, retail staff, manufacturers and trade unions, among others, and is expected to be part of an upcoming book on the subject. It is significant as it came after the positions had hardened by 2008, when the government had come close to opening up the sector.

It followed a government-sponsored survey in that year, again conducted by Icrier, on 505 samples that found that the presence of branded stores hurts small businesses in the particular vicinity even as the impact, it said, lessens over time.

While the study was designed to measure the impact of organised retail outlets on their business rather than on the impact of FDI in retail, the findings are significant.

Almost 40% of small vendors said their businesses had an adverse impact because of the presence of modern retailers in their cities and due to competition from them, while 23% said their profits declined since 2007, the year when many new entrants including Reliance, AB Group and Bharti Enterprises opened hundreds of stores nationwide. About 5% of the respondents say they would close down their businesses due to the competition from organised retailers, a stark difference from the 2005 study of the smaller number of kirana stores that found only 1.7% closed their shops due to the heat they faced from branded stores.