Public memory is usually short. It was only three years ago that the country?s most ambitious retail project, Mukesh Ambani?s Rs 25,000-crore Reliance Retail was all set to change the image of shopping in India, replacing the dusty, cramped kirana stores with posh, hip and happening stores. Numerous worries about the imminent closure of many poor kirana stores were being expressed at that time. The government, in fact, decided to go slow in opening the retail sector to FDI, and even commissioned ICRIER to study the impact of organised retail on the unorganised sector. Three years later, however, the tables seem to have turned.
There now seems no need to worry, and the government can easily let the ICRIER report gather dust. Organised retail versus unorganised retail is no more an issue and is hardly a subject that would interest politicians as election time nears. The wheel has come full circle and it?s the kirana shops that are laughing all the way to the bank as the most visible symbols of domestic organised retail chains like Subhiksha battle for survival.
It?s not that Subhiksha, being a small group, is alone in battling for survival. Bharti-Walmart, which evoked strong political reactions given the reputation of the world?s largest retailer, Wal-Mart, of washing away neighbourhood stores, is moving so slow that people have forgotten that it has already opened a store in Ludhiana. The good old Big Bazaar, which was the only money spinner for Kishore Biyani?s Future Group also posted losses recently.
As Subhiksha readies to close down almost half its stores and Reliance Retail?which earlier had to close shop in Uttar Pradesh because of political opposition?now begins restructuring itself where operating, how many kirana stores have you seen closing down in your neighbourhood in these times of slowdown? None.
In the absence of efficient supply chains, organised retailers found that they had moved too fast in opening stores and in offering discounts?and are now making amends. The good old kirana stores that weathered all recessions and periods of inflation in the past continue to do business as usual and will continue to do so.
?rishi.raj@expressindia.com