Kirana stores innovate in battle against retail giants

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The India Retail Report 2013 says that local retailers are growing profitably as compared to large retailers (Reuters) The India Retail Report 2013 says that local retailers are growing profitably as compared to large retailers (Reuters)
SummaryAbout 57,000 local retailers in the country resorted to modern retail practices in the past two years

to 40 traditional retailers in the past one year that were looking to modernise their stores.

The success of the kirana stores has led retail baron Kishore Biyani to open a new format called KBís Fairprice, under which the company offers franchisee model to grocery shopkeepers through a nine-year agreement. Shopkeepers are required to pay a registration fee and the initial working capital.

ďThe group is rapidly expanding KBís Fairprice chain through the franchisee network. We believe KBís Fairprice will be the key channel and catalyst for the growth of company-owned FMCG brands and help make Future Consumer Enterprises among the leading FMCG companies in the country,Ē says Biyani.

Future Group, like its other counterparts in the food and grocery space, is experimenting with smaller store sizes and a change in its product mix. Most supermarket chains in the country are saddled with losses due to mounting costs and low margins. Tataís Star Bazaar is cutting down the size of stores by 50% to 30,000 square feet and did not open a single store in FY13. Shoppers Stopís HyperCity is also experimenting with the 30,000-square-foot model, while bringing in products like apparel that have higher margins.

Abheek Singhi, partner, The Boston Consulting Group, recently said that in all global markets except Brazil, the top three retailers were home grown. ďThe local players understand the different needs of the consumers, unlike a uniform model that big chains have,Ē he added.

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