Slowdown in Organised Retail

December 3, 2008	(Be the first to rate this story!)  Loading ...
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The organised retail sector in India is experiencing a slowdown with expansion projects either getting postponed or put on hold. But interestingly, the rural sector has been largely untouched by the economic slowdown, according to industry experts.“The rural industry has done even better than last year in the last six months due to record output of crops and the loan waiver of Rs 60,000 crore by the Central Government. As a result, the rural populace has a higher disposable income for fresh purchases,” C K Ranganathan, Chairman and Managing Director, CavinKare told to this website’s newspaper on the sidelines of the Conference on ‘Retailing for India’, organised by the Confederation of Indian Industry (CII) Tamil Nadu. The loan waiver size had later been increased to Rs 71,680 crore.

Earlier, CII and advisory firm, PricewaterhouseCoopers (PwC) released a retail report on ‘The Benefits of Modern Trade to Transitional Economies’. The report states that with modern trade, consumers would benefit from widely available choices and quantity along with rationalization and convergence of prices. It would lead to a zero tolerance policy for inefficiencies since consumers would be unwilling to pay for substandard products. Since modern trade players were tax compliant and their sale figures outnumbered that of the organised sector, revenue collections would increase. Large retailers would require development of a support mechanism for their operations including logistics, transportation and warehousing which would generate further revenues for the government.

“The growth of organised retail will lead to creation of local distribution channels in India, which in turn will improve the quality of produce available in local markets. Engaging with local suppliers will boost the local economy. It will also lead to more employment opportunities as people will need to be hired to operate retail operations,” said NV Sivakumar, Executive Director and Leader, Retail and Consumer Practice, PwC. “The Indian retailing sector is at an inflection point. It is set to enter a new growth trajectory owing to rising household consumption and the entry of corporate entities and global retailers,”added R Subramanian, Conference Chairman.He said kiranas would continue to be the mainstay in Indian retail. Kiranas were located in neighbourhood catchment areas and the knowledge intimacy was hard for modern retailers to replicate.

News Published Under:   Retail Market in India |

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