Can Kirana’s and Hypermarkets Co-Exist ?

With about 11 retail shops for every 1,000 persons, India has the highest shop density in the world.

That’s one shop for every 20-25 families. In cities, the density is much higher. Delhi, for example, has nearly 45 shops per thousand persons!

But Post FDI era ,Are all this set to change?

Let’s First Look at some other countries before drawing conclusions

• United States of America 4 stores/1000 persons
• Singapore  4 stores/1000 persons
• United Kingdom 5 stores/1000 person

According to a study by industry body Ficci, the total retail trade in India was worth Rs 11,00,000 crore in 2003. Of the approximately 12 million retail shops, 96% occupy floor space of less than 500 sq ft.And this is where comparisons with retail powers, like US or Singapore, end. In India, shops are many but they are small.

If more Hypermarkets open smaller ones will have to from groups to take on biggies.Logic here is simple Enemy’s Enemy is friend  .smaller retailers will have to form groups work on inventory planning  ,E commerce and store upgradation to survive.If they fight hypermarkets alone instead of groups .They are glaring @ Doomsday .

However After Agriculture retail is second largest employment provider in India. Will there be addition of new jobs ?

Finance Minsters argument that 10 million jobs will be generated in next three years .Will there be no job losses .let’s look at likely scenarios

1. Jobs Generated > Jobs Lost :Since there are certain estimations of about 36 crore Indians currently depend on retail for livelihood and expected jobs to be generated is around 1 crore .the big question is how many jobs will be lost
2. Jobs Generated = Jobs Lost :highly unlikely scenario
3. Jobs Generated < Jobs Lost :Since about 35% of India’s Urban Employment comes from Retail .Center should have experimented in Top 8 Metro’s and studied impact before considering smaller towns .With this new legislation FDI retail is allowed in any town which are more than 1 million population

Is it a Master Stroke or Political Suicide?

China’s Case study looks like India is heading to an recession to help West which is stuck by Recession.Will UPA-11 Reform back fire? .

What could have been realistic option?

Like Government had certain restrictions on German Retailer Metro AG .They should have allowed FDI in similar way and forced SME”s to buy from them which would have enhanced logistics and  cold storage facilities there by protecting SME’s from being wiped out