Monday, March 31, 2008

Big retailers to take care of mom-&-pop stores

India Inc is all set to script an Indian model for retail growth. The government has asked big retailers to chart out an India-specific strategy for organised retail, which would result in inclusive growth of mom-&-pop outlets.

“We have had two rounds of meetings with retailers such as Reliance, AVB Group, Future Group, Bharti and the Tatas,” minister for food processing industries Subodh Kant Sahay told ET. “We want small shopkeepers to get access to big supply chains. Everybody should benefit,” he said. This could be the answer to the political criticism over large retail trampling small kirana shops.

“Organised retail, in the long term, would create a market as it would help boost supply-chain management for our farm produce also. Without retail, farmers cannot get optimum value for their produce. Due to lack of an efficient supply-chain network, more than half of India’s produce gets wasted,” Mr Sahay said.

India could consider opening up its $330-billion retail market to foreign investment after it is convinced that the kirana stores will not be affected by big retailers. “Organised retail, backed by an efficient supply chain, has the potential of raising the rate of growth of the food processing sector from 13% to 20% in the next three to five years,” the minister added.

Last year, states like Uttar Pradesh cracked down on organised retail, especially in fruit and vegetables, following protests from vendors. This sector has a strong lobby of middlemen, who control significant chunks of local vote banks.

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