Challenges Before Kirana Stores in India

Organised retailers in the form of malls and hyper markets such as Big Bazaar, Pantaloon, More and Reliance Fresh have become household names among the urban masses. The organised retail market in India which represents just 10-15% of the total retail market of Rs 4,00,000 crore has a great scope for entry of new enterprises. The triggers for increasing popularity of organised retailing are as follows:

1.  Labour costs have risen and it has become uneconomical to employ staff in mom and pop stores i.e. the kirana shops.

2.  The changing family structure with double income families with fewer children  means less frequent grocery shopping with more purchase per visit.

3.  Increased disposable income with the people because of rapid growth of per capita income coupled with low interest rates.

4.  The formal financial system  facilitates interest  banking and inexpensive credit, which has boosted consumption.

5.  Changing real estate prices made people move to suburbs and the stores with parking facility and food stalls could open in modestly priced open spaces.

6.  With the development of infrastructure, new roads and better mobility has made shopping from organised retailer easier.

The traditional kirana stores find it difficult to compete with the big organised retailers because of the following reasons.

1.  Inadequate financial resources.

2.  Lack of sufficient space for expansion. Purchase of new space is not affordable.

3.  Lack of trained workers because of low wages.

4.  Poor window display at the retail store.

5.  Lack of facilities for consumer which are available at organised retail stores.

6.  Poor management of the retail store.

Despite all the above constraints, kirana stores continue to operate in India because of their proximity to the consumer and consumer trust in them. The reasons for the continuing popularity of kirana stores among Indian masses are

1.  The kirana stores are located in neighbourhood of consumers and hence are more convenient and time saving. One need not travel to the market place for shopping.

2.  Moreover being located in the neighbourhood they can meet the immediate needs of people. For items of small valueor for just one or two items one need not go to a mall or hyper market.

3.  The owners of kirana stores offer advice to consumers and help them in making the right choice.

4.  They offer goods on credit and also deliver goods at the residence of the buyer. They accepts orders over the phone and also ensure home delivery of low value items to customers.

5.  Such stores follow relationship marketing because of which many people patronise kirana stores.

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