Impact of Modern Retail on kirana stires

Impact of modern Retail on Kirana stores

ACKNOWLEDGEMENT

We would like to thank our College Dr. V. N. Bedekar Institute of Management Studies,
Thane, for giving us an opportunity to do a seminar course project on the RETAIL
INDUSTRY and to learn various aspects of retailing.
We would like to extend our gratitude to our Project Guide, Asst. Prof Ms. Shobhana
Panikar, whose timely help, valuable suggestions, encouragement and guidance has helped us
throughout our project.
We are also very thankful to our Seminar Course Coordinator, Asst. Prof Ms. Pallavi
Chandwaskar, for her valuable inputs, time and motivation.
We are also thankful to all the kirana shop owners, who participated in our survey, for their
valuable time in providing response and being cooperative.
We also want to thanks our friends and colleagues, who have directly or indirectly helped us
in the compilation of our project. Lastly, we would like to thank the entire Teaching and Non
teaching staff at Dr. VN BRIMS for their support and co-operation during our project.

__________________

______________

(Ms. Shobhna Panikar)

(Neelam Devre)
_______________
(Sandeep Singh)

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ABSTRACT (EXECUTIVE SUMMARY)
Retailing consists of all activities involved in selling goods and services to consumers for
their personal, family or household use. Sales of goods to intermediaries who resell to
retailers or sales to manufacturers are not considered a retail activity.
The Indian retailing industry, which was traditionally dominated by small and family-run
stores, has come of age. The retail sector is the second largest employer after agriculture in
the country and also the second largest untapped market after China. There are some 12
million retail outlets in India. Besides, the country is also dotted with low-cost kiosks and
pushcarts. Organized retailing is only 8% of the total retail industry. Over the past couple of
years there have been sweeping changes in the general retailing business.
Traditional markets are transforming themselves in new formats such as Departmental stores,
hypermarkets, supermarkets and specialty stores. In the last few years, as modern retail
concepts begin to make an appearance across urban India, the debate on their impact on the
traditional Indian retail businesses including the so-described "mom & pop" stores and the
neighbourhood “kirana stores” gets shriller.
Small Indian "Kirana" Shopkeepers Are Already Feeling the Heat from the Malls. The
opposition to large retail shops seems to be growing, and broadening to take in domestic
retail chains as well as the international giants that want to enter the Indian market.
Admittedly, such opposition flies in the face of the received wisdom: studies based on
extensive field surveys have concluded that the spread of organised retailing will not hurt
Millions of small mom-and-pop, or kirana, stores across the country. But the experience so
far (and it is early days yet) suggests that this may not be entirely true.
News reports have cited instances of small shops closing down or losing business in areas
where large retailers have set up shop. Analysts are still working out the odds on the kirana
v/s organized retail major battle, vacillating between saying that the two sets of entities will
co-exist happily, each serving different needs and predicting doom for the kirana store, who
perhaps would find the pace daunting. But only as long as the Indian consumer weighs his
options in favour of the kirana – paying MRP at an outlet that’s a stone’s throw away versus
paying better prices,but at the cost of a longer trip to the nearest retail outlet. In any case,

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most of India still prefers to walk to the nearby kirana store for nearly everything! This will
change if and when the biggies set up outlets in every other street, in every neighbourhood –
which they will, if the numbers make sense. However, Kiranas has opportunities to grow in
India in spite of the growth of malls because these kirana shops will also get benefit of the
growing economy. The argument that the kirana shops will be affected by these malls is only
myth. Therefore both the malls and kirana stores can play simultaneously in India.

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INDEX
Sr.No.
1.
2.
3.
4.
5.
6.

Particulars
Background Of Study
Importance of Study
Objective of Study
Methodology
Research Methodology
• Definition of Retail
•

7.
8.
9.
10.
11.
12.
13.
14.
13.

Page No.

Current scenario of retail industry in India

• Market size
Changes in Consumer Buying Behavior
Key Players
How Modern retail have Impacted Kirana Stores
Primary Research & Analysis
Recommendations
Conclusion
How to win during slowdown
Referencing
Annexure

LIST OF CHARTS USED
Figure Particulars
No.
1.
2.
3.
4.
5.
6.

Page No.

Kirana Shop size
Product sold by Kirana shops
No. of people working in kirana store
Factors in favors of kirana store
Perception of kirana towards modern retail
Strategy adopted by kirana stores

GENESIS OF THE PROJECT
This project is based on change in business practices of Kirana stores, due to modern
retailing. Since 2006, when most big retailers either entered the retail space or began
expanding their network, sales in local kiranas have grown in the low single digits even less

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than the GDP growth rate, while modern trade has grown in strong double digits, though at a
much lower base.
"The Indian Shopper has discovered modern retail and is increasingly shopping there," says
Nielsen's Executive Director for Retail and Shopper Practice Dipita Chakraborty. This trend
is fueled by the growth in number of modern stores, she adds.
Reliance Retail President Bijou Kurien attributes this to more options that big retailers offer
to consumers. "In mom-and-pop stores, customer has to be very specific with what they want,
but they can get more options in a modern store, and that's where we are gaining," he says.
In fact, an inter-ministerial group set up by Prime Minister Manmohan Singh to suggest ways
to tackle high inflation has said that organised retail will reduce the margin between the price
farmers get and what consumers pay by eliminating traders, and this will bring down prices
Multinationals like Wal-Mart and Carrefour, which are lobbying for entry into the big and
fast-growing Indian retail market, also say big investments in cold storages will cut wastage
of fruits and vegetable in the country, estimated at 130 crore every day, or about half the total
production.1
While doing our Seminar Course Project, We got an opportunity to conduct a survey on how
kirana Store owner are fighting against Big Retailers, A Questionnaire was designed to get
feedback from the Kirana Shop Owners.
The project was chosen to find out that, kirana stores view towards modern retail, which is
growing at very fast pace. New strategies Kirana stores have implemented to ensure high
level of customer satisfaction & loyalty.

BACKGROUND OF STUDY
Retail sector in India is dominated by unorganised players, and even today’s time of modern
super market and Hyper market customers are buying products from kirana stores, but the
frequency of purchase from kirana stores is going down day by day. Today a customer does
1

Modern retail outgrowing Kirana stores in India: Nielsen Study Sagar Malviya & Maulik Vyas, ET Bureau Jun
15, 2011, 03.18am IST

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not simply buys a product; they look for variety, Best quality product at lowest possible price
and convenience in purchase. Organised retail out-competes traditional retail on prices,
variety and quality and offers greater convenience.
A article published by The Hindu on Sep 21, 2012, Prime Minister’s Economic Advisory
council Chairman C Rangarajan said that when large retailers come into operation, then small
retailers need to strengthen themselves. This is something that the small retailers will have to
do on their own. He further said that once the share of overall modern retail in food reaches
about 25 to 30 per cent, it is bound to affect the kirana traders first and then the small and
marginal traders. They (small retailers) will continue to remain. In fact, the international
experience shows that even in advanced countries where there are large scale department
stores operating, the ‘mom and pop’ stores have not disappeared. They continue to exist.” He
also suggested that These kirana stores and street hawkers can also become part of the
modern retail change story if they can be assimilated into organised retail, organise
themselves under their banner through franchisees, upgrade through infusion of capital, better
training,”2
Another article published by The Economic Times states that ET visited popular kirana stores
across Kolkata, Gurgaon, Delhi, Mumbai, Bangalore, Hyderabad and Chennai to compare
their prices of day-to-day items with big retail chains in their cities. Modern retail won hands
down.
In branded items such as detergents, wheat flour and edible oil, modern trade prices were 420% lower than general trade, which primarily sold them on MRP. And in unbranded staples
such as sugar and onions, larger stores were cheaper anywhere between 10-35% in different
cities. Take the case of onion.
In Bangalore, Aishwarya department store sells it for Rs 20 per kg, while Aditya Birla
Retail's More on the same road charges Rs 16.90. In Chennai, Star Bazaar, a hypermarket
chain run by Tata's Trent in a franchise agreement with UK's Tesco, sells onion at Rs
18.50/kg, but at Jyothi Kirana at T Nagar it costs Rs 24. The reason for this, say big retailers,
is that they are able to cut through various levels of middlemen while sourcing. Also, these
chains can bargain for lower prices with manufacturers because of their large purchase orders
and pass on the savings to the consumer.

2

http://www.thehindu.com/business/Industry/organised-retail-outcompetes-kirana-pmeac/article3922709.ece

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Kishore Biyani of Future Group feels that kiranas are essential to service the breadth of
Indian consumers. Analysts agree that consumers need both the formats, to always have an
option to choose between the convenience of a neighbourhood store and value deals of a big
retailer. They say consumers will always prefer around the-corner kiranas for low-volume
purchases.
"Kiranas deal with consumer goods brands in low volumes. Since these firms do not share
good margins, kiranas make it up by charging the MRP without discount," says Anand
Ramanathan, associate director at management consultancy KPMG. Organised retailers,
however, have to make it worth the consumer's while to drive out, brave traffic and parking
hassles and shopping queues. This is where their unique selling point of low prices comes in.
"To draw consumers, retailers squeeze suppliers and ensure efficiency in categories that drive
footfalls. They balance it out by enjoying higher margins in categories where impulse
buying is high," says Ramanathan.3
While modern retailers make their purchase in bulk, and due large to quantity they can easily
negotiate with their suppliers. Small retailers don’t enjoy these benefits from suppliers.

3

http://articles.economictimes.indiatimes.com/2011-12-01/news/30463099_1_kiranas-big-retail-chains-starbazaar

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IMPORTANCE OF STUDY
This report can be referred by students to understand the impact of Modern retail on Kirana
stores. Kirana store owners can also refer this report to get an idea that how modern retailers
are pulling crowd for them, & most importantly, what they can do to retain their customers,
Providing Service and better customer satisfaction, so that customers should not come to
them only for small purchase but also for bulk purchase.
In Retail, organised sector share is only 8%, where as unorganised retailing’s is near around
92% of total retail value. It’s true that most of unorganised players don’t pay Income tax to
government, but government gets a large portion of its money, through unorganised retailing
by indirect taxes such as sales tax, LBT etc. Unorganised retailing provides employment to a
large no. of people. If unorganised retail would not have been there, our government would
have faced a swear problem of unemployment. So it’s high time that govt. should come
forward and take some initiative to protect unorganised retailers, from modern retailers.
This report can be used govt. Organisations and other institutes to understand how Kiranas
are fighting with big retailers and what steps they need to take in helping kiranas to fight with
modern retailers.

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OBJECTIVE OF STUDY
• To study the attitude of kirana stores towards modern retailers operating in
their locality
• To analyse the impact modern retail on the business of kirana shops
• To understand how modern retail has changed customers’ attitude towards
kirana shops
• To identify ways in which kirana stores are competing with modern retailers

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APPROACH OF STUDY
Given below is the manner in which we approached this study.

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RESEARCH METHODOLOGY
We used both Primary and Secondary research for this project.
I] SECONDARY RESEARCH:
•

For secondary research we referred to various articles published in:
o Newspapers like
o Reports published by different Institutes and Agencies.

II] PRIMARY RESEARCH
.
Tools Used:
•

Questionnaires were used for primary data collection through Personal Interviews

Sampling Method:
•

The sampling method chosen is Convenience Sampling (as response of only shops
nearby Korum Mall was taken)

Convenient sample: A statistical method of drawing representative data by selecting people
because of the ease of their volunteering or selecting units because of their availability or
easy access. This type of sampling are the availability and the quickness with which data can
be gathered.
(Source: http://www.businessdictionary.com/definition/convenience-sampling.html#ixzz2hlbfBPns)

•

Sample Size: 25 Kirana shop owners were interviewed for their responses

•

Sample Area - Shops located near Panchpakadi area as that is the area surrounding
Korum Mall

•

Sample Unit: Kirana Shops

Tools and techniques used for to represent observations and findings:
•

Graphical Analysis

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•

Pivot table

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INTRODUCTION
AND
STUDY OF
INDIAN RETAIL MARKET

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DEFINITION OF RETAIL
•

The term Retail is derived from French word “Retaillier” meaning to cut a piece off or
to break bulk.

•

According to Cundiff and still, “Retailing consists of all those activities involved in
selling directly to ultimate consumers”.

•

According to Mc. McCarthy, “Retailing is selling to final consumer products to
households”.

CURRENT SCENARIO OF RETAIL INDUSTRY IN INDIA
The India Retail Industry is the largest among all the industries, accounting for over 10 per
cent of the country GDP and around 8 per cent of the employment. The Retail Industry in
India has come forth as one of the most dynamic and fast paced industries with several
players entering the market. But all of them have not yet tasted success because of the heavy
initial investments that are required to break even with other companies and compete with
them. The India Retail Industry is gradually inching its way towards becoming the next boom
industry.4
Online retail still only accounts for a minuscule $600 million (around Rs.3,600crore),
compared with India’s $518 billion brick and mortar retail industry. according to a report
published by Technopak. E-commerce sector has a potential to grow to as much as $76
billion by 2021.5
Retail market is growing at an annual rate of about 20 per cent, is largely dominated by small
shops and stores as of now. The organised segment is in its nascent stage and has huge
potential to harness in the sub-continent. Foreign giants like Wall-mart and IKEA have
recently received the Government’s nod to enter the Indian market, after making all the
necessary compliances.

4

http://www.fibre2fashion.com/industry-article/free-retail-industry-article/indian-retail-industry-its-growthchallenges-and-opportunities/indian-retail-industry-its-growth-challenges-and-opportunities1.asp
5

http://www.livemint.com/Industry/JI8YmK2GistPUKQimV4f9N/Indias-ecommerce-retail-sector-faces-cashcrunch.html

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MARKET SIZE
India’s retail market is majorly dominated by the unorganised sector. Organised segment
accounts for 8 per cent of the total retail landscape, according to a study by Booz & Co and
RAI. In the developed countries, the organised retail industry accounts for almost 80% of the
total retail trade
The Indian retail industry has expanded by 10.6 per cent between 2010 and 2012 and is
expected to increase to US$ 750-850 billion by 2015, according to another report by Deloitte.
Food and Grocery is the largest category within the retail sector with 60 per cent share
followed by Apparel and Mobile segment.6
Luxury Retailing is gaining importance in India. This includes fragrances, gourmet retailing,
accessories, and jewellery among many others. Indian consumer is ready to splurge on luxury
items and is increasingly doing so. The Indian luxury market is expected to grow at a rate of
25% per annum. This will make India the 12th largest luxury retail market in the world.
Rural retailing is now the focus for many retailers. It is observed that the rural regions
registered saw consumption even during the economic slowdown. Rural India accounts for
2/5th of the total consumption in India. Thus, the industry players do not want to be left out
and are devising strategies suited especially to the rural consumer.
•

The sector can be broadly divided into two segments: Value retailing, which is
typically a low margin-high volume business (primarily food and groceries) and
Lifestyle retailing, a high margin-low volume business (apparel, footwear, etc). The
sector is further divided into various categories, depending on the types of products
offered. Food dominates market consumption followed by fashion. The relatively low
contribution of other categories indicates opportunity for organised retail growth in
these segments, especially with India being one of the world’s youngest markets

•

Historically, Indians have been conservative spenders, thus food forms a huge chunk
of India’s consumption needs. Transition from traditional retail to organised retailing
is taking place due to changing consumer expectations, demographic mix, etc. With

6

http://www.ibef.org/industry/retail-india.aspx

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the revival in consumer spending, expansion plans of retailers are back in full swing.
The convenience of shopping with multiplicity of choice under one roof (Shop- in
Shop), and the increase of mall culture etc. are factors appreciated by the new
generation. These are expected to be the growth drivers of organised retailing in India
over the long run.7

7

http://www.equitymaster.com/research-it/sector-info/retail/Retailing-Sector-Analysis-Report.asp

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EVOLUTION OF INDIAN RETAIL
Before the decade of eighties, India with hundreds of towns and cities was a nation striving
for development. The evolution was being witnessed at various levels and the people of the
nation were learning to play different roles as businessmen and consumers. The foundation
for a strong economy were being laid, youth were beckoning new awareness in all spheres.
And this brought in an opportunity for retail industry to flourish. First in the metros and
major cities later to impact sub urban and rural market as well.

In olden days there used to be weekly Markets and village fares from where people used to
make purchase. Weekly markets and melas are, even in existence.
After some time Mom? Pop kirana & continence Store came into existence. Convince stores
are usually located near roads and petrol pumps and they used to charge a little higher prices.
During the time of independent fight , the concept of khadi Bhandars came in existence.
Cooperatives were formed to provide products at lower prices to customers.

8

http://www.equestindia.com/eq/article_3.asp

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Then came the concept of Hyper markets and shopping malls. Experts believe that modern
Retail is going to be future of retailing. To our surprise there was not a single mall in India a
15 years back and just a few years ago only a handful of them were striving, today there are
more than 50 malls across different cities and 2 years from now around 500 malls are
predicted to come up.9

9


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CHANGES IN CUSTOMER’S BUYING BEHAVIOR
Consumer behavior in retailing is more unpredictable and volatile. Due to the change in
lifestyle consumers are demanding very large selection of producers and they expect more
discount. Consumer are no longer influenced by brand name but they are very cautious about
quality and value.
34% consumer prefers unorganized retail shopping while 26% consumer prefers organized
retail shopping but 40%consumers are still in dilemma. 37% consumers purchase daily
groceries from local kirana store While 26% customer Shop from Supermarkets,21%
consumers from convenience store and rest 16% customer’s prefer hypermarket. Thus,
highest percentage is still with local kirana stores however the difference between
supermarket and local kirana is less. 40% customer’s visit fortnightly to the malls for various
different purposes, 30% customers visit weekly, 20% monthly and rest 10% daily.(ICRIER
Report, 2013)

•

60% customers are satisfied with the pricing strategy of the malls after considering
various discounts, sales and other offers, while 40% customers are not satisfied.
During the survey

•

It was found 64% consumer’s finds best shopping deals in malls with various discount
offers, gift packages etc.28% customer’s are satisfied with the shopping deals served
by the local kirana stores while 8% customers has no opinion. 32% of consumer’s
declared an increase in spending, 21% indicated decrease and the balance no change.

•

Thus the arrival of organized retail has enhanced spending in general. The reasons
indicated for higher spending have been mainly the purchase of larger quantities due
to wider range of products, availability of attractive offers like discounts and
promotional schemes, and access to better quality products with higher price.
(Source: Indian Council for Research in International Economic Relations (ICRIER), Vol. 2, No. 3,
July 2013)

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Unorganized retailers in the vicinity of organized retailers have been adversely affected in
terms of their volume of business and profit.
Unorganized retail has maintained employment levels perhaps as a result of competitive
response. The major factors that attract unorganized retailers to consumers are proximity,
goodwill, credit sales, bargaining, loose items, convenient timings, and home delivery
There is clear evidence of a competitive response from traditional retailers who are gearing
up to meet the threats from organized retailers.
Consumers have generally gained with the emergence of organized outlets through the
availability of better quality products, lower prices, one- stop shopping, choice of additional
brands and products, family shopping, and fresh stocks.
Lower income consumers have saved more from purchases at organized outlets.
These results are not indicative of the countrywide scenario. For the country as whole,
unorganized retail is growing at a reasonable rate and will continue to do so for many years to
come. India is however a latecomer to organized retail expansion and the picture still remains
unclear as to its future direction. 10

10


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KEY PLAYERS

x

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BIG BAAZAR:
Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of India's
leading business houses with multiple businesses spanning across the consumption space
About Big Bazzar

Hyper mart

Out let
Parent Group
Owner
Founded
Head Quarter
Industry
Website
Tag Line

Chain of development store in india
104 out lets located in india
Future Group
Kishore Biyani(CEO)
2001
Jogeswari,Mumbai
Retail
WWW.bigbazar.com
“Is se sastaaurachhakahinahi”.

Introduction: Big bazaar is a chain of shopping malls in India. Currently, there are 214 big
bazaar stores across 90 cities and towns in India. Big Bazaar offers a wide range of
merchandise including fashion and apparels, food products, general merchandise, furniture,
electronics, books, fast food and leisure and entertainment sections. Food Bazaar, a
supermarket format was incorporated within Big Bazaar in 2002 and is now present within
every Big Bazaar as well as in independent locations.
local brands of popular commodities, like diapers, sugar, wheat flour garments etc, are very
popular in Big Bazaar stores¬ Also, the quantity for each product is not limited to large
packs only¬Big Bazaar offers the maximum variety for each category of product.

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Key Facts
No of Stores
No of Cities with presence

214
90

A total retail space covered

16 million sq.ft.

Focus of Marketing Initiatives

Engage the customers by adapting to local culture Focus
on the lowest price guarantee in all the campaigns

Key Driver of Footfall

Large Product Mix

Growth rate

19%-22%

•

Price is the main value proposition for Big Bazaar. Prices are usually 5
to 60 percent lower than the market price.

•

The Average Size of Big Bazaar store is 50,000 sq.ft and the Big Bazaar
family centre is 80,000-120,000 sq. ft

•

Stocks 3,000 to 4,000 SKUs (stock-keeping units) of merchandise

•

Food and groceries account for 40% of Big Bazaar’s revenue, whereas
fashion and apparel make up for about 30% of the overall revenue. The
remaining 30% comes from the other units such as electronics. (February
23, 2013)11

11

www.bigbazar.com

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Product List:

Target market :Big Bazar specially targets working women and homemakers′ The large and
growing young working population is a preferred customer segment′ Big Bazar targets higher
and upper middle class customers′TARGET MARKET

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Reliance Fresh:
Reliance Industries Ltd is an India-based company. The company is India's largest private
sector company on all major financial parameters. They are the first private sector company
from India to feature in the Fortune Global 500 list of 'World's Largest Corporations' and
ranks 117th amongst the world's Top 200 companies in terms of profits. The company
operates world-class manufacturing facilities across the country at Allahabad, Barabanki,
Dahej, Hazira, Hoshiarpur, Jamnagar, Nagothane, Nagpur, Naroda, Patalganga, Silvassa and
Vadodara
About Reliance Fresh a convenient store format, is governed by the MukeshAmbani and is
the most important part of Reliance Industries retail Business. Reliance Ltd. has planned to
invest more than Rs. 25000 crores in the retail division.
It also comprises more than 560 reliance fresh stores all over the country. The outlet sells
fresh fruits, staples, dairy products, fresh juice bars, groceries and vegetables. A distinctive
Reliance Fresh outlet is around 3000 to 4000 sq. feet and accommodates catchment area of
one to three Kilometers.
History of Reliance Fresh
The Reliance Retail had to face various difficulties before the launch of Reliance fresh,
because of the various circumstances prevailing in Orissa, West Bengal and UP, along with
the news focusing on the dearth of vegetables and fruits stocks. The retail business of
Reliance then minimized its exposure in vegetable and fruit business, as a result established
Reliance fresh positioning a pure super market play focusing on various categories like IT,
consumer durables, home, FMCG and food.
The retail company of Reliance may not supply the vegetables and fruits in a few states, the
Reliance Fresh decided to not to race with local wholesalers partly because of the political
reasons as well as its incapability to maintain a healthy supply chain.
1213

About Reliance Fresh

Supermarket

Out let
Parent Group
Owner
Founded

784 cities and 6,000 towns in india
Reliance ltd
Mukesh Dhirubhai Ambani (CEO)
30Oct 2006

12

http://www.indiainfoline.com/Markets/Company/Background/Company-Profile/Reliance-IndustriesLtd/500325
13
http://ekikrat.in/Reliance-Fresh

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Head Quarter
Industry
Website
Tag Line
Revenue $ 19.9bilion

Mumbai,India
Retail
WWW.rilfresh.com
“Growth through value Creation”.

Dmart:
About Dmart

Departmental store

Outlets
Parent Group
Owner
Founded
Head Quarter
Industry
Website
Tag Line

64 outlets located in india
Avenue Super Marts Ltd (ASL)
R K Damani
2000
Mumbai,india
Retail
WWW.dmartindia.com
“Mehnat hamari bachat aapki”

The company has over 2800 employees located across 50+ offices in the country
Target group: Value conscious
Upper /Lowe middle income customers.
Over 12 milion outlets operation the country and only 4 of the being larger than 500 Sq (46
m2) in size
14

14

http://www.dmartindia.com/about.html

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More retail:
Aditya Birla Retail Limited is the retail arm of Aditya Birla Group, $40 billion corporation. The
Company ventured into food and grocery retail sector in 2007 with the acquisition of a south based
supermarket chain. Subsequently, Aditya Birla Retail Ltd. expanded its presence across the country
Under the brand “more”. With 2 formats supermarket and hypermarket

About More

Supermarket ,Hypermarket
Chain of development store Country
509 supermarkets and 15 hypermarkets across the

Outlets

country
Mr. Kumar Mangalam Birla

Owner
Founded
Parent companey
Head Quarter
Industry
Website
Tag Line
Employee

2007
Aditya Birla group

Mumbai,india
Retail
WWW.morestore.com
“Hamesha Extra”
Over 11,000

Supermarket:
more. - Conveniently located in neighbourhoods, more. supermarkets cater to the
daily, weekly and monthly shopping needs of consumers. The product offerings include a wide range
of fresh fruits & vegetables, groceries, personal care, home care, general merchandise and a basic
range of apparels. Currently, there are over 512 more. supermarkets across the country.
Hypermarket:
more.MEGASTORE - is a one-stop shopping destination for the entire family.
Besides a large range of products across fruits & vegetables, groceries, FMCG products, more.
MEGASTORE also has a strong emphasis on general merchandise, apparels & CDIT.
Currently, sixteen hypermarkets operate under the brand more.MEGASTORE in Mysore, Vadodara,
Indore, Mahadevpura, Old Madras Road, Marathalli, Bull Temple Road & 4th Block Jayangar in
Bengaluru, Thane, Saroor Nagar, Kukatpally & Banjara Hills in Hyderabad, Rohini & Kirti Nagar in
New Delhi & Nashik.
Own label food brands more feasters,kitchen’s and best of Indian home & personal care brands
more,Enrich, 110% pestex paradise and Germe.
Vision & Values

Dr.V.N.BRIMS

PGDM (2012-14)

Page 27

Vision : "To consistently provide the Indian consumer complete and differentiated shopping
experiences and be amongst India's Top retailers, while delivering superior returns to all
stakeholders".
Values:
•

Integrity

•

Commitment

•

Passion

•

Seamlessness

•

Speed

15

15

http://www.morestore.com/abt_retail.html

Dr.V.N.BRIMS

PGDM (2012-14)

Page 28


HOW MODERN RETAILERS HAVE IMPACTED KIRANA STORES
Modern retailers offer customers quality products at 6 to 20% prices lower as compare to
traditional retailers because modern retailers eliminate many layer of intermediary and since
their purchase quantity is big so they are in better position to negotiate with their suppliers.
Apart from lower prices also offers large choices and better merchandising of products.
Today customers don’t simply just shop they also think about shopping experience thats
where modern retailers win the race.
They usually operate in specious shops where products are segregated as per their category so
customers can easily pick up the products they want. Whereas traditional retailers operate in
small shops.
16

16

http://articles.economictimes.indiatimes.com/2011-12-01/news/30463099_1_kiranas-big-retail-chains-star-

bazaar

Dr.V.N.BRIMS

PGDM (2012-14)

Page 29


FINDINGS FROM PRIMARY
RESEARCH

Dr.V.N.BRIMS

PGDM (2012-14)

Page 30


PRIMARY RESEARCH
size of the shop
Area in Sq.ft
150
200
250
300
350
Above 350

No of Respondent
7
7
4
2
3
2

Figure 1 . What is the size of your shop? (In sq.ft.)
Interpretation:
The majority of the kirana shop said that they operate in the area of 150 to 200 sq.ft and we
observed that most of the kirana shops were attached to owners home and only 8% of kirana
shops operate in the area above 350 sq.ft so we can say that most of the kirana shops still
operate in smaller area.

Dr.V.N.BRIMS

PGDM (2012-14)

Page 31


Q-2: Which products do you sell in your shop?
Prodct Category
Grocery
Dairy
Confectionery
Food Products
Cosmetics
Home Care
Personal Care
Stationery
Any other (Please mention)

No of respondent
25
21
21
21
9
22
24
7
0

Figure 2. Product sold by kirana store
Interpretation:
All

retailers that they sell Grocery products and personal care products and almost all

retailers sell dairy, Confectionery, food product and we also observed that many retailers sell
other products like Vegetables, Recharge coupons and some other products. We can say most
of the Kirana retailers sell all the products that are sold by modern retailers, But stationery
and cosmetics are two product categories, where kirana shops can improve to attract more
customers.

Dr.V.N.BRIMS

PGDM (2012-14)

Page 32


Q3- No. people of working in store including
People

working No

in Shop
Up to 2
less than 5
more than 5

of

respondent
16
7
2

Figure 3. No of people working in kirana store
Interpretation:
Most of the kirana shops are operated by the owner of the shop because most of the kirana
shops operate in small area. And those who have more than 200 sq.ft .They have more than 2
people work in the shop. Only 2 shops had more than 5 people working in shop.

Dr.V.N.BRIMS

PGDM (2012-14)

Page 33


Q-4: Why do you think customers come to your shop? Please rate the following factors on a
scale of 1 to 5 as per their importance. (1 being least important & 5 being most important).
Store

Emergency

Discounts

Customer

Home

Product

Timing
Factors
Not
at

Credit
Facility

Purchase

& Offers

Relationship

Delivery

Range

Service
all

Important
0
Low Importance
1
Neither important

0
7

0
1

0
9

0
0

0
3

0
4

nor unimportant
Very Important
Extremely

10
18

12
18

8
18

10
0

12
18

16
6

8
12

Important
Total

48
77

4
41

44
71

0
19

52
82

8
33

12
36

Figure 4. Factors in favor of kirana store
Interpretation: The most important factor for pulling customers towards kirana is store
timing, because Big retailers normally operate between 10.00 am to 10.00 pm, and Kirana
shops operate from 7.00 am to 11.00 pm, when consumer requires any product in morning
or after 10.00 pm ,they have come to kirana shop because it opened at 7.30 am. Store timing,
Emergency purchase, and customer relationship these factors are extremely important.
Discount and offers, home Delivery and product range these factors does not plays an
important role in bringing customers to shop. And also for the dairy product people prefer to
buy from kirana shops because they purchase dairy products like milk on regular basis.

Dr.V.N.BRIMS

PGDM (2012-14)

Page 34


The most important factor is Customer relationship which attracts customer toward
kirana store.

Dr.V.N.BRIMS

PGDM (2012-14)

Page 35


Q-5: Do you feel insecure due big retailers opening their shops in your locality?
Option
Yes
No

No of Respondents
17
8

Figure 5.No of Kirana store feel insecure due to big retailers.

Interpretation: The 68% retailers feel insecure due to big retailers opened in their locality.
and 32 % retailers told that they don’t feel insecure because they thought that for small
purchase, customer will not go in organized retail they will go to small shops, which are
located at a stone throw distance from their home.

Dr.V.N.BRIMS

PGDM (2012-14)

Page 36


Reasons for Kirana Retailers feeling Insecure:
•

Discounts & offers

•

Lower prices

•

Packaged food

•

More convenient shopping

•

wide Choice

•

More product range

Reasons for Not n ot feeling insecure:
•

For small or Daily purchase consumer will come to retailers.

•

For dairy, food products they buy from kirana store.

•

Convenience

•

Some retailers feel that prices in modern shops are higher as compare to traditional
retail.

•

Some Retailers said that middle class people always go to kirana shops.

Dr.V.N.BRIMS

PGDM (2012-14)

Page 37


Q-6: What are the new strategies that you have adopted to face competition from big and
modern retailers?
Adopted Strategy
Store Renovation
Increasing Product range
More Discount
Home Discount
Improved Display
Customer Relationship
Credit Facility
Improved packaging
Not adopted any strategy

No of respondents
10
8
6
5
6
10
5
8
10

Figure 5 Strategy adopted by Kirana store to face competition.
Interpretation:

68% retailers told they adopted strategy like store renovation, customer

relationship. and also they started to provide home delivery and also they change packaging
style. and 40% retailers said that they haven’t adopted any strategy to fight with modern
retailers.

Dr.V.N.BRIMS

PGDM (2012-14)

Page 38


RECOMMENDATION
During our primary research, we observed that most of kirana shop owners are not taking
much efforts to attract customers, they feel that customers will come to them just only
because their shop is located nearby customer home, when ever customers wants to make a
small purchase they will go to kirana shops. Kirana shop owners feel that they can’t do much
to fight with modern retailers.
Kirana shop owners can attract more customers by increasing their product range, they reduce
their margin and offer products at lower prices, offering credit facility in only area, where
kirana stores have edge over modern retailers, and kirana stores can also offer better
packaging and display of products.
Since kirana stores have less no. of customers they are in a better position to maintain
relationship with customers.
Kirana store can also organize themselves by forming some association or franchise system.
Under this system all retailers will come together, that will in better position to negotiate with
wholesalers and manufacturers.
Small store owners can upgrade their shops to emulate practices of large retail chains, thus
they can become more profitable than their bigger counterparts, who continue to cut costs,
consolidate and review operations on the back of poor consumer sentiment in a sluggish
economy.
“Local retailers are growing profitably much faster than large retailers,” said the India Retail
Report 2013, which was released on Wednesday. The Report also mentions that about 57,000
local retailers in the country resorted to modern retail practices in the past two years.
There are some kirana stores who have adopted modern retail look and they can also help
other retailers to upgrade their stores to follow modern retail look and practices. For ExSarvodaya Super Market—a 40-year-old 2,500 sq. ft food and groceries store in Dadar West,
Mumbai has helped close to 60 other traditional retailers in Gujarat, Uttar Pradesh and
Maharashtra to upgrade their stores to follow modern retail look and practices. “We are
seeing more and smaller store owners interested in converting their traditional stores to
modern retail.
The other area where kirana shops can improve in Inventory, they need to manage inventory
more efficiently.

Dr.V.N.BRIMS

PGDM (2012-14)

Page 39


CONCLUSION
Both the formats of retail kirana and modern are essential to fulfil customer needs. Modern
retail will see tremendous growth in future but they wont be able to replace kirana store. Even
today middle class people prefer to make purchase from kirana stores. Even the customers
who don’t grocery and other products on a monthly basis prefer to buy from kirana stores.
Given the time of recession modern retailers are putting their expansion plan on hold. The
growth of modern retail will hurt the profits of kirana stores but kirana store owners will able
to make their bread and butter due to increasing population. The entry of foreign players in
Indian market will make their job more difficult.
But customer relationship and store timing will help them to retain customers even during the
time of slowdown.
Factors that are playing a role in fuelling the bright future of the Indian Retail are as follows:
•

The income of an average Indian is increasing and thus there is a proportional
increase in the purchasing power.

•

The infrastructure is improving greatly in all regions is benefiting the market.

•

Indian economy and its policies are also becoming more and more liberal making way
for a wide range of companies to enter Indian market.

•

Indian population has learnt to become a good consumer and all national and
international brands are benefiting with this new awareness.

•

Another great factor is the internet revolution, which is allowing foreign brands to
understand Indian consumers and influence them before entering the market. Due to
the reach of media in the remotest of the markets, consumers are now aware of the
global products and it helps brands to build themselves faster in a new region

However despite these factors contributing to the growth of Indian retail Industry, there are a
few challenges that the industry faces which need to be dealt with in order to realize the
complete scope of growth in Indian market.
Foreign direct investment is not allowed in retail sector, which can be a concern for many
brands. But Franchise agreements circumvent this problem. Along with this regulations and
local laws and real estate purchase restrictions bring up challenges. Other than this lack of
integrated supply chain and management and lack of trained workforce and flux of the market
in terms of price and product choice also need to be eliminated.

Dr.V.N.BRIMS

PGDM (2012-14)

Page 40


Despite these challenges many international brands are thriving in the Indian market by
finding solutions around these challenges. A company that plans to enter Indian market at this
time can definitely look forward to great business if it analyzes and puts efforts on all
parameters.

Dr.V.N.BRIMS

PGDM (2012-14)

Page 41


WINNING STRATEGY FOR MODERN RETAILERS
Modern retailers can rebuild their assortment strategy and that has seen better traction from
consumers. They can increase the share of fashion category in store to drive margins.
We also believe that constant store renovations will help them to increase stores productivity.
The retailers can also restructure the store format and make effective utilization of space.
"To fight with recession and earn profit in retail business, large retailers have to revamp their
smaller formats with a mix of merchandise similar to that offered by kirana and differentiated
ones like those offered by global convenience stores. in order to cut the cost of real estate.
Modern retails can also promote private labels in food category, since private labels gives
more margins to retailers.
Retailers can offer can provide more attractive offer to attract offer.

Dr.V.N.BRIMS

PGDM (2012-14)

Page 42


ANNEXTURE

Questionnaire
I______, a student of Dr.V.N. Bedekar Institute of Management Studies, Thane, is
conducting a survey on Kirana shops. Could you please spare five minutes to answer a few
questions. (TO BE FILLED BY ONLY OWNER/PARTNER OF SHOP)
Instruction: Please circle the correct selected by respondent.

Date:__________

Name of respondent: ____________________________________________________
Name of the shop:___________________________________________________
Address of the shop:___________________________________________________
Contact details (optional):______________________________________________
Q-1: What is the size of your shop? (In sq.ft.)

Q-2: Which products do you sell in your shop?

1. 150

1. Grocery

2. 200

2. Dairy

3. 250

3.

4. 300

4. Food Products

5. 350

5.

6. Above 350

6. Home Care
7.

Confectionery
Cosmetics
Personal Care

8. Stationery
9. Any

other

(Please

mention)

________________________
Q3- How many people are working in your store?
1. Up to 2
2.

less than 5

3. more than 5

Dr.V.N.BRIMS

PGDM (2012-14)

Page 43


Q-4: Why do you think customers come to your shop? Please rate the following factors on a scale of 1
to 5 as per their importance. (1 being least important & 5 being most important).
Factor

1

2

3

4

5

(Not at all

(Low

(Neither important

(Very

(Extremely

Important)

Importance)

nor unimportant)

Important)

Important)

A-Store Timing
B-Credit Facility
C-Emergency
Purchase
D-Discounts

&

Offers
E-Customer
Relationship
F-Home
Delivery Service
G – Product
Range
Q-5: Do you feel insecure due big retailers opening their shops in your locality?
(a):YES - If yes then why?
__________________________________________________________________________________
(b): NO - If no, then why?
__________________________________________________________________________________
_________________________________________________________________________________
Q-6: What are the new strategies that you have adopted to face competition from big and modern
retailers?
1. Store Renovation
2. Increasing product range
3. More Discounts
4. Home Delivery
5. Improved Display
6. Customer Relationship
1. Credit Facility
2. Improved Packaging

Dr.V.N.BRIMS

PGDM (2012-14)

Page 44

9. Not adopted any strategy
Thank You. ( Please thank respondent and terminate interview)

Dr.V.N.BRIMS

PGDM (2012-14)

Page 45

Impact of Modern Retail on kirana stires

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