This document analyzes pain points for grocery stores. It discusses Reliance Market, a cash and carry store launched by Reliance Retail. The project's objectives are to understand kirana store profitability, gaps in sourcing, needs to increase profits, and requirements to shift sourcing to organized wholesalers. Interviews found most kirana stores purchase goods on 7-15 day credit. Transportation costs are only incurred for locally sourced staples. Recommendations include providing door delivery, uniform pricing, and inventory management support. Addressing replacement policies, delivery issues, and achievable promotion schemes could help organized wholesalers attract kirana stores.

1. Analyzing pain area of Grocery Stores
Submitted by: Anamika Gupta, PGDM-IB IB/04/02

2. Reliance Market(Mart)
 A subsidary of Reliance retail Ltd
 Reliance Market is an Cash & Carry Store
 The first store was launched in 2007 ,August in
Ahemdabad
 Product are traded in bulk
 It offers more than 20,000 products

3. About The Project
.
 Reliance is planning to launch one of these stores in Delhi
NCR
 to know the problem of grocery stores with their wholesaler
or distributors
 To know analyze the gaps which make shopkeeper to switch
to organized wholesaler
 To observe the problem in grocery stores
 To interview shopkeeper

4. Retail Industry
Market size INR 16 trillion
Organized retail sector 2-3%
Unorganized retail sector 97 %
Growth rate 15% p.a
Contribution in National GDP 14%
•7% Share Of Retailing In Employment
•There are around 12 million grocery stores in India
Source: Technopark research 2010

5. Cash & Carry Store
 Cash and Carry model was developed by Lawrence Barely (he
was entrepreneur and philanthropist) from Huddersfield. It is a
wholesale model.
 It is a membership based retail store selling limited SKUs in
bulk packs.
 Customers are usually members of the club and pay an annual
fee
 Only For members like wholesalers, semi-wholesalers and
retailers
Source: Wikipedia

6. BITS AND BYTES
 No FDI restriction in cash & carry business
 Cash and carry in India is worth around $140 billion,
 Carefour, Metro AG and Bharti–Walmart are the major players

7. Objective of Project
There are four major objectives of this project which listed as
follows:
 Understanding Kirana profitability.
 Gaps in current kirana sourcing.
 Need gap of kirana for increasing their profitability.
 Key requirements which will make kirana shift their current
sourcing to organized wholesale.

8. Sample Design
• These stores are established in the area of 3000-
5000sq m. they are famous in their area.
• Their inventory and cash counters are computerized.
• These stores are established in the area of 600-
1200 square meter..
• Their inventory and cash counter is manually
managed
• They are very small kirana stores that are located in
the colonies.
• They may have their local customers for whom they
are fulfilling the demand of staple goods and day
today’s need.

9. Analysis
Profitability Of Shopkeepers’
Credit Limit
Transportation Cost
Frequency of purchase and time

10.  Credit Preferred by Shopkeeper
80%
20%
Shopeeker opting Credit
Yes No
All the 8 stores of A, B and C type store purchase goods on credit.
The two of the A type store stores those who have high sales & income
around a crores don’t prefer credit, they pay cash on delivery of the
products.

11.  Number of credit days
15days
30%
7days
70%
Time period for credit
The majority of shopkeeper purchase goods on Credit. The credit
limit may vary from 10,000 to Rs 100,000. The C type store takes
credit of 20,000Rs approximately while B and A type stores credit
varies with purchase. The most common time period for credit is 7
days. But some companies give credit for the time period of 15 days
also in the case high volume purchase.

12. 0
20,000
40,000
60,000
80,000
100,000
120,000
7days credit 15 days
credit limit for the credited days
amount of credit limit

13. Transportation Cost
 FMCG companies provide Door to Door delivery and it is free
of cost
 the branded staple products were delivered free to the stores
while local staple products which are bought from whole sale
market incurred the cost in transportation.

14. Frequency Of Purchase And Time
0
2
4
6
8
10
12
14
16
FMCG
Staple

15. Frequency of Purchase of Stores (A, B, C) Per
Month
0
2
4
6
8
10
12
Atype Store B type Store C type Store
FMCG
staple

16. Sourcing
Type of product Branded Wholesale
market
Both by branded
and wholesale
mkt
Staple 30% 20% 50%
Mode Of Sale for Staple Product
Sales
rerensative
Wholesa
le mkt
Sales
representi
ve&
phone
Sales
represent
ative &
wholesale
Mkt
On phone
&wholesa
le market
11% 45% 11% 22% 11%

17. Mode of Payment
80%
20%
mode of payment
cash on delivery
Cheque/draft

18. Shopkeepers’ Desirability
Price
&Assortment&
Door Delivery
22%
Door Delivery
11%
Quantity $
Quality
22%
price
34%
terms of
trade
11%
Shopkeepers' desirability

19. Observation
 Issue between shopkeeper and wholesaler/distributor
 Inventory management
 Account Management
 Company’s scheme for kirana stores
 Factor affecting sales
 Other Source of Earning
 Relationship edifice between Customers and stores

20. Problems
 Replacement means the substituting the damaged product with new
product is major issue with distributor among all the stores. Most of
the FMCG Company does not take replacement.
 Delay in delivery, out of stock and supplying more than the order is
being placed are the common issues among store keepers.
 Unnecessary interference of distributor
 The scheme offered by company also has lot of terms and condition
which is hard to achieve by shopkeeper especially with small retailers
(B and C type).
 The demand and desirability of stores varies with location.

21. Recommendations
 First all, it is necessary to provide free door to door delivery either its
FMCG or Staple or other commodities.
 we can come up with special offer on the purchase of less volume
 We need create uniformity in pricing. The margin which we will be going
to provide shopkeepers of small stores will be same as for the shopkeepers
of big stores.
 There is need to possess more branded product and variety in product in
order to attract these stores.
 There must be a helpline number

22.  There should be group of representative who can visit weekly in store in
order to manage their inventory and take order as per the shortage in the
stores
 It is necessary to keep inventory up to date according to demand

23. Conclusion
The two month internship gave me an exposure in B2B
and had developed my interpersonal skill
 I learnt about Different kind of Brands
 I get to know how business is conducted in B2B
 I learnt how to persuade and deal with people
 I learnt the art of selling
 I imbibe hard work, patience, determination and
marketing skills from the shopkeeper

24. Things To Remember
 Listen to your boss
 Be punctual and be concise