So, organised retail is good for one and all

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New Delhi, May 26 : this point of time need access to institutionalised credit the most, if the adverse impact of organised retail has to be minimised. The sample reveals that 88% of retailers didn’t avail bank loans in the first year of operations.

A strong sentiment amongst the traditional retail fraternity was their willingness to continue in spite of a possible competition arising in the form of organised retail, with as high as 36% of the retailers wanting their children to continue in their business. While majority of the unorganised retailers snubbed the proposition of becoming a franchisee of the organised retailers, as low as 10% of the surveyed sample opting for a franchise route. The impact on the controlled sample (not in the vicinity of organised retail) revealed that while profit increased 5% for the controlled sample, it declined 10% for the retailers in the vicinity of retail chains.

The impact on consumers has been very mixed, with the most startling finding that it was the lowest income group of consumers who benefited the most from the modern retail since they were able to choose the cheapest discount store to make their purchases. The middle class with monthly income of Rs 10,000-100,000, is the mainstay for retail shop at both organised and unorganised outlets.

Location was seen as a comparative advantage for the unorganised retailers as the mean distance to the residence of consumers at unorganised outlet is 1.1 km as compared to 2.6 km for unorganised outlets.

In terms of the preference for organised versus unorganised retailers, those who shopped at organised outlets reported the main reason as better product quality, lower price and choice of more brands as the reason why those who shopped at unorganised outlets chose it due to proximity to residence, credit availability, possibility of bargaining as the causes.

The survey also reveals that shoppers shop at both outlets and the share of spending varied from product to product. Those interviewed at organised outlets declared that about 46% of their spending was on vegetables and fruits and non-staple food items, while other packaged items were from unorganised outlets.