Mom, Pop stores impacted by big retail: ICRIER

Written by Agencies | New Delhi, January 29: | Updated: Jan 30 2008, 00:51am hrs
The neighbourhood kirana stores will initially feel the heat with the growth of big super markets and malls, Rajiv Kumar, Director of ICRIER, which has been entrusted with a government study on the impact of organised retail on Mom & Pop stores, said.

Small retailers will be initially impacted by the entry of large scale retail houses. However, the impact is likely to be diluted over a period of time, Kumar said.

He said ICRIER would submit its report within the next two months to the Department of Industrial Policy and Promotion.

The government had assigned the study to ICRIER on a directive from the Prime Ministers Office after UPA Chairperson Sonia Gandhi wanted an assessment of the impact of the big retail stores including foreign direct investment on small shops.

Few formalities are still left and within two months we will submit the report to the government, Kumar said.

Citing example of southern states, he said the small retailers had initially come under pressure but have learnt to co-exist with big stores over a period of time.

The study would encompass how opening up of the retail sector would affect consumers, suppliers, pricing of products; its impact on the organised and unorganised retail and traders and dislocation of people employed in the sector.

While both the government and ICRIER had denied that the report was ready, the draft found its way into the media.

Under the current dispensation, 51 per cent FDI is allowed in single brand retail and 100 per cent FDI in cash-and-carry and wholesale operations. FDI is not allowed in multi-brand retail outlets.

The Indian retail landscape is dotted by players like Reliance, Future Group, Spencers and Subhiksha.