In a bid to blunt political opposition as well as ensure peaceful coexistence by retail chains promoted by large groups, small kirana stores and other conventional retail stores, the Central government is considering the introduction of zoning laws in small towns. Retail chains with deeper pockets will be asked to set up shop in the periphery of these towns, while smaller players remain in the heart of town.
According to sources close to the development, the government is studying the Malaysian government?s model, under which a hypermarket can only be set up 15 km away from a town with a population of under 3.5 lakh.
Though big retail chains are maintaining a studied silence on the issue of zoning laws, small trader organisations that have opposed the entry of organised retail are seeking even more concessions from the government. For instance, they demand regulating the number of malls in a specific area on the basis of population and also identifying areas where malls should not come up at all.
But what is not clear is whether the smaller formats of the retail chains like convenience stores that have a small built-up area would also come under the ambit of zoning laws. Convenience store formats are typically neighbourhood stores with a floor area starting from 2,000 sq ft (Reliance Fresh stores, for instance) and need to be located in neighbourhood markets to serve the daily needs of consumers.
Sources in the government admit that some sort of the rules and regulations for the trade as a whole need to be put in place given the magnitude of the retail explosion the country is going to experience in the near future.
