Saturday, November 8, 2008

Big retail chains would fail: Uttar Pradesh Udyog Vyapar Pratinidhi Mandal

As Indian Retailers trying their best to keep their sales register ticking in the times of global Economic Slowdown, the Uttar Pradesh Udyog Vyapar Pratinidhi Mandal comments that “India is a tropical country where per capital income is low. The large retail formats, which are successful in the US, Canada and Europe are bound to fail here.”

Mr.Kanchal, the president of the organisation said that establishment expenses of big retailers amount to almost 20% while it is just 4-5% for small retailers which is going to create trouble for big retail chains in the times to come.

Also, the Parliamentary Standing Committee on Commerce which was analysing the impact of big malls on small retailers and is expected to submit its report to the central government soon is trying to study the Malaysian and Polish legislations like Shopping Mall Regulation Act which aims to strike a balance between the  small and large retailers.

As retailers have started facing the heat of economic slump, do you agree with the statement that "Big Retail Chains would fail in coming future"?

1 comment:

Sunil said...

Basic yet powerful point on operating costs for big retailers. However I'm hopeful for the industry. That's because,
1. It is true that per store operating cost would be high for organize retailer, but is it true for cost/ft?
2. Organize retailer uses this extra cost for marketing, customer service and efficiency of supply chain. All have it's own benefits; long term and short term.
3. Quality and health conscious consumer would be willing to pay little extra for the same.
4. A better supply chain network by cutting middlemen and reduce wastage would help keeping basic costs lower for an organize retailer.

Let's see what happens...