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Are the popularity of supermarkets threatening the livelihood of small time traders and shop owners? Your take on this growing trend ?

Essay Contest for UPSC Exam for IAS

Shopping has always been a celebrated occasion in India. People await the time when they go to shop with the families and make their purchases. Shopping has undergone lots of changes over the years but the intensity with which the people shop remains the same. Retailing in India has been unorganized until a few years ago. The retailing industry is getting organized over a period of time. Organized Retail Sector is currently at an inflexion point, and is ready to take the next leap of growth at a steady and stable pace. The factors responsible for rapid growth of organized retail in many countries are Urbanization, rising income levels, increase in spending power due to working women and the increased FDI.

The different formats of food retailing in India have been Traditional shops/Departmental stores, Supermarkets, Hypermarts, Super centres. [Source: P.C.Chengappa] Some of the basic characteristics of the different format is as follows:

a) Super-centers – Large shopping area selling an assortment of food and non-food items (Eg. Family mart 100,000 sq)
b) Hypermarkets- Shops having wide range and depth of products (E.g. Big Bazaar)
c) Large supermarkets - Large, self service stores (3,500-5,000 sq ft) - They carry a complete line of food products and convenience items (Food World, Nilgiris, Reliance Fresh)
d) Traditional Shops/Departmental Stores: Small family run business usually selling few assorted products such as vegetables and basic household amenities.

The shopping habits of people have evolved from fragmented local markets to larger centralized wholesale markets. In the case of big food retail chains, the most important aspect which attracted consumers is in terms of the 'variety of assorted products given under a single roof'. The modern retail stores have been positioning themselves as a one stop shopping center. Consumers could come to a super market and make the entire family shopping in a single place. Secondly, these retail chains also promise better quality and substantial cost savings compared to the traditional shops. Hence with the evolution of the modern retail shops, the traditional retailers located in their vicinity experienced reduced business during the initial stages. This in turn has affected the livelihood of small time traders and shop owners who had to compete with the big super markets for the share of the consumer purse.

The super markets have access to lots of resources such as professional people to manage the business, standard processes and adequate amount of capital which makes them give a heated competition to the small shop owners.

Someone had said that "Every diversity brings with it an equal scope of Opportunity". It is up to us to figure out if we are looking at a problem or an Opportunity. Hence, it is my view that the popularity of supermarkets has threatened the livelihood of small time traders and shop owners but in no way can we say that the battle has been won by the Super markets. In case of Traditional retailers, they can match up the might of the modern retail shops by working on their strength. The traditional shops have certain aspects which endear them to the consumers such as the close proximity of the shops to the consumer's home is convenient to the end consumers. Also, the small shops give additional facilities such as home delivery and monthly credit facilities so to ensure they retain the loyalty of their customers. These shops retain a high trust and strong personal relationship with the consumer.

In order to compete effectively with the modern shops, the traditional shops can tap their strengths to meet head-on the strengths of the big super markets. The retailers can provide customized solutions to the consumers, in terms of home delivery which the big supermarkets can never provide their customers. Also, the traditional shops can focus on providing niche products to its consumers. Even though the supermarkets provide the entire set of products under one roof, the small traders can provide quality services and advices to the customers by focusing on niche products. There are also few examples to quote such as Mom & me shops which provide products related to baby care. Hence, by exploiting the weakness of the big supermarkets the small shop owners can compete effectively and continue with their existence in the days to come.

Hence, we find that no matter how much the retailing competition increases, there is enough cake for everybody to share. The small shop owners need to focus on their strengths and position themselves as customized service provider to the consumers. One could foresee a future in which both the supermarkets and the small shop owners cohabit harmoniously with a common purpose of providing better service to the consumers and make the shopping experience truly beneficial and wonderful.