By: Gaurav Puri & Sapna Nair-Purohit Dated: May 01, 2014
Gone are the days of handing the kirana wala your list of groceries, popping a few grains of rice or dal in your mouth, while indulging in small talk with him and getting him to round off the bill while making the payment. Today, a trip to that store is mostly limited only to buying a packet of milk, bread, or that ubiquitous bottle of coke in an emergency... The kirana is incidentally your friendly neighbourhood mom & pop store...
By 2015, more than 300 million shoppers are likely to patronise organised retail chains, according to a FICCI report. A study by ASSOCHAM predicts that hypermarkets are likely to see rapid growth between 2011 and 2016, registering a CAGR of 13.4 percent. Modern grocery retail is expected to grow at a CAGR of 11.7 percent during this period, as compared to 8.2 percent for traditional grocery retailers.
Global retail major Walmart’s impending entry in India and even Tesco’s (UK) interest in the retail market point to a deepening and widening trend — that of an increasing number of Indian consumers veering towards a modern and more convenient way of shopping, even for daily goods.
While this mirrors India’s rapid urbanisation, there’s a section of people who aren’t quite pleased — the local kirana wala. We spoke to this troubled yet hopeful lot about the concerns opportunities, and indeed lessons that modern retail has presented them with. Here’s the ground report:
A PIRANHA FOR KIRANAS
Most housing localities in the metros of India have a supermarket nearby — Easy Day, Big Bazaar, More, Reliance Fresh, D-Mart to name a few. These localities also have the good-old kirana wala, usually much closer — in distance as well as relationship — to households than the modern retailers.
For those who would rather avoid the traffic snarls and parking fuss, one phone call to the friendly neighbourhood kirana is all it takes to stock up for the week or the month. Instead of standing in un-ending queues to the billing counter, here, the customer can pay at the end of the month or at a time convenient to him/her...
The kirana walas are aware of the fact that most of their erstwhile customers prefer to head to the big supermarkets today. The modern retail shops, air-conditioned, with spacious aisles and row after gleaming row of packaged products, and trained staff, in addition to acoustics and lighting, to help enhance what is called the shopping experience, spell doom for the local corner store. Occasions such as such as ‘market day’ and ‘sabse sasta din’ (‘the cheapest day’) only add to their woes.
When everything — from batteries to Italian seasoning — can be bought at one place, why would a customer go anywhere else? Besides, who can resist the bargains on higher quantities of groceries offered by supermarkets and hypermarkets?
A small -time shop in East Delhi has had to bear the brunt of a Big Bazaar outlet launched adjoining a metro station. “There has been a 50 percent decrease in sales ever since,” the shop owner says.
Besides, almost all the shop owners we spoke to lamented the declining margins. Today, they are able to claim margins in the range of 5-8 percent, which they fear will decline further.
THE KIRANA STRATEGY
Some corner shops have tried to replicate the big stores by bringing in the self-service culture in their stores. The second-generation owners of the 30-year-old Guru Nanak Store in Kalkaji in South East Delhi renovated their store (doubling its size) four years ago, to suit the “supermarket crowd”. Customers can today walk in, choose from a wide range of brands and products and then have them billed. This has helped Guru Nanak get more customers.
For some, going to the supermarket is a family outing. A cart with children in it and adults around it is a common sight at such stores. On the other hand, the kirana man makes do with a tiny perch in a corner at the entrance of the store. But for those who would rather avoid the traffic snarls and parking fuss, one phone call to the friendly neighbourhood kirana is all it takes to stock up for the week or the month. Instead of standing in un-ending queues to the billing counter, here, the customer can pay at the end of the month or at a time convenient to him/her. Not a mean blessing, especially in cash-strapped times for the middle class.
Home delivery and credit are the two attractions that these small stores pin their hopes on. Most shops deliver within a radius of 1.5-2 kms. A monthly khaata or account is symbolic of the trust and often longstanding relationship that the customer and the kirana wala share. What’s more? A smile or a warm greeting makes the transaction all the more personal, something one doesn’t experience in a large-format store. As Surinder Singh, the owner of Guru Nanak Store says, “We don’t give discounts. We sell with a smile. We have a one-to-one relationship with the customer.”
Some like S.S. Sharma, owner of Nine-O-Nine Store in East Delhi, have made truce with the fact that customer loyalty is a thing of the past. “There is no such thing as a loyal customer. He/she will go to the place selling the cheapest products. It doesn’t matter if we run up losses sometimes, because it’s our own shop, we don’t have to pay rent,” Sharma says.
Ease of shopping and ease of payment are the two most important aspects that a customer looks for. Considering the current infrastructure (or the lack of it) of kirana stores, even two customers become a crowd. Expanding and revamping the store is clearly an opportunity for them. “We will have to put an air-conditioner, maybe a glass door and make our store look modern and attractive. That’s the only way to survive,” says Rakesh Sharma, owner of Himachal Stores in East Delhi.
Other changes such as introducing self-service and accepting debit/credit card payments for large purchases could also help attract more customers as will offering tangible discounts or freebies. Lately, customers are often heard complaining about the ‘excessive spending’ and ‘impulse buying’ that happens at the end of a trip to the supermarket. Kirana stores could well free you of that guilt!