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Indian Streams Research Journal
Vol.1,Issue.V/June; 12pp.1-4
khadilkar s. m. Research Papers
ISSN:-2230-7850
Does organised retailing is Rreally Growing in India ?
khadilkar s. m. Associate professor KIT s IMER KOLHAPUR
ABSTRACT
In a fast changing world scenario, trade has assumed a significant role. It is a potentially very powerful instrument of economic development. As an impact of globalization, both domestic and international trades are facing many challenges. In a country like India where a vast majority of people live in rural and semi urban areas, trade becomes all the more important in so far as essential goods are concerned. Time has come when the impact of the changing situation on trade, particularly retail trade needs to be carefully analyzed. With this view in the mind the present study focuses upon studying different facets of retail trading with special reference to grocery products.
The nature of retail trade in India is such that it includes in its fold, small retailers, wholesalers, hypermarkets and customers. It is necessary that the interdependence of all these factors is to be carefully studied. In the present situation, retail trade is passing through the transition phase. Thus it becomes appropriate to consider all these aspects of retail trade and analyze their relationships. CONCEPT OF RETAIL Retail is the final stage of the economic activity. By virtue of this fact, retail occupies important places in the world economy. In an attempt to understand the scope of the term retail, various definitions of the term have been examined. DEFINITION OF RETAILING According to Philip Kolter, retailing includes all the activities involved in selling goods or services to the final consumer for personal, non business use. A retailer or retail store is any business enterprise whose sale volume comes primarily from retailing. Litreture Review : Retail trade in India According to Suja Nayar in her book Retail Management, post liberalization era saw retail industry undergoing a revolutionary change. India is a land of retail democracy- hundreds of thousands of weekly haats and bazaars are located across the length and breadth of our country by people's own selforganizational capacities. Our streets are bazaars lively, vibrant, and safe and the source of livelihood
Please cite this Article as : khadilkar s. m , Does organised retailing is Rreally Growing in India ? : Indian Streams Research Journal (JUNE ; 2012)
Vol.1,Issue.V/June; 2012
for millions. India has the highest shop density in the world, with 11 outlets per 1000 people. Retail in India has started with the concept of weekly markets, where all the traders gather at one big place to sell their products every week. The people come to these weekly markets to buy the household items for the next week. Village fairs and melas were also common as it had more of an entertainment value. Once the people started getting busy with their lives, there emerged the mom and pop shops and the kiranas in the neighborhood. After India became independent, came into existence the system of Public distribution of foods through the ration shops, where food grains, sugar and oil for the daily consumption were distributed at subsidized rates through the government ration shops. The modern corporate retail formats are of the exclusive brand outlets, hypermarkets and supermarkets, departmental stores and shopping malls. But still the Indian consumer depends on the self-organized retail shops for their daily needs. Indian Retail Industry is a derivative of the growing economy, changing demographics and preferences of the Indian consumers. In the 1990's all the larger grocery retailers have introduced structural changes in the business, with the specific goal of acquiring customer attention. The use of structural changes has become so eminent that retailers offer customers rewards. Retailing industries are becoming increasingly important, especially for developed economies. Within that, the shopping less than one umbrella concept continues to emerge as a popular retailing. This study is an attempt to determine the changing practices of retail trade like small grocery shop keepers, hypermarkets and customers in Kolhapur city. With the growing realization that brands are one of a firm's most valuable intangible assets, branding has emerged as a top priority in the last decade for grocery retailing. Given its highly competitive nature, branding can be especially important in the retailing industry to influence customer perceptions and drive store choice and loyalty. Researcher attempts to find the role of branding in grocery retailing. To focus attention on the fast changing pattern of grocery retail trade in Indian cities the present is entitled as A study of retail trade with reference to grocery trade in Kolhapur city. ______________________________________ Nayar Suja, Retail Management, Himalaya Publishing House, 2006, pp 6-17 ORIGINALITY & NOVELTY OF STUDY : The researcher is of the view that this study is novel in the following respect a) So far so good, no research has been done on grocery retail trade in Kolhapur city. So the work is original and first of its kind in the field of grocery retail trading. b) The study concerns itself with grocery retail trade in Kolhapur city which is unique in itself as it is developing city consisting of lower middle class people and surrounded by such villages which produces grocery products. c) The study has concentrated upon two types of customers. Firstly, those customers who buy the grocery from small grocery shop keepers and hypermarkets and secondly, those customers who buy the grocery only from small grocery shop keepers. OBJECTIVES OF THE STUDY For an aim to be successful, it must be supported by specific research objectives that can be measured. Each of the objectives set for the study was designed to contribute to a specified aim. The main objective is to study the grocery retail trade in Kolhapur city. With this main objective in mind, study has following objectives 1. To study the history and present status of grocery retail trades in Kolhapur city. 2. To study the retail formats of grocery trade in Kolhapur city. 3. To find out and analyze working of existing organized and unorganized retail trades in Kolhapur city. 1.3) SCOPE OF THE STUDY 1. Geographical scope- The study is covers Kolhapur city as one geographical unit. 2. The time period for this study The retail initiatives during 2000-2009 is taken for the study. 3. Only hypermarkets in Kolhapur city are taken for the study. 4. Registered small grocery shops - Small grocery shops having the registration (shop act license) are taken for the study and the shop keepers having the area less than 400 sq. ft. are taken for the study. 5. Wholesalers in Kolhapur city are taken for the study
1.2)
6. The customers shopping from both hypermarkets and small grocery shops are taken for the study. 7. The Kolhapur has 1300 small grocery shops out of which 70 % are having less than 500 sq. feets to operate with. So, 770 small grocery shop keepers are spread through out Kolhapur city. 8. Geographically Kolhapur city is divided into five words, namely A, B, C, D, E The samples of these shop keepers are taken from each of these wards. HYPOTHESES OF THE STUDY ? Retail Formats in grocery trade are changing in kolhapur city. ? retail trade in grocery makes the progress than organized retail trades in Kolhapur city. Unorganized Hypothesis: Retailing practices in grocery trade are changing. Justification for forming the hypothesis: The present study is spread over a decade that is from 2000 to 2009. In such a long span of time, changes are bound to take place. Researcher therefore decided to contact small grocery shop keepers in order to assess the change brought about by the arrival of hypermarkets along with the changes in the retailing practices. To ascertain this change, the researcher has considered 14 parameters and z-test was used to assess the change. This has helped the researcher to notice the change. Further, from the percentage analysis, researcher is able to state the extent of change in the relation to the specific parameters. H0: Retailing practices in grocery trade are changing. H1: Retailing practices in grocery trade are not changing. TABLE SHOWING AWARENESS OF RETAILERS ABOUT CHANGE IN RETAIL TRADE
Particulars
SGS Keepers No. of Respondent s 225 0 225 %
Aware Unaware Total
100 0 100
Hypermarket authorities No. of % Respondent s 3 100 0 3 0 100
Wholesalers No. of Respondent s 5 0 5 %
100 0 100
Source : questionnaire of small grocery shop keepers, hypermarket authorities and wholesalers
Form the table, it is clearly observed that all the respondents (100%) from small grocery shop keepers category are aware about the arrival of the hypermarkets in Kolhapur city. So, they are aware about the changes; in the retail industry and its functioning and operations. Small grocery shop keepers are able to classify the parameters on which they are feeling the change. All the respondents from wholesalers and hypermarket authority's category completely agree about the fact that retail trade is changing. In order to test the extent to which the change occurs, researcher has asked the small grocery shop keepers giving them the various parameters where the change has been observed by the researcher so as to take their opinion. All the hypermarket managers and wholesalers are of the opinion that retailing practices are changing.
TABLE SHOWING SMALL GROCERY SHOP KEEPER'S OPINION ON VARIOUS PARAMETERS ABOUT CHANGING RETAILING PRACTICES
Sr. No. 1 2 3 4 5 6 7 8
Parameter
Yes Responses 197 85 173 0 179 164 167 77
No
Total
Space Billing system Store Environment Credit Card Credit Facility Cheapness Varieties Customer data management 9 Selling in loose 223 99 2 10 Multiple Counters 125 56 100 11 Supporting Staff 97 43 128 12 Home delivery 173 77 52 13 Discount on MRP 24 11 201 14 Advertising 160 71 65 Average 131.71 93.78 Percentage 58.5 41.5 Source: Questionnaire of small grocery shop keepers
% Responses % Responses % 88 28 12 225 100 38 140 62 225 100 77 52 23 225 100 0 225 100 225 100 80 46 20 225 100 73 61 27 225 100 74 65 29 232 103 34 148 66 225 100 1 44 57 23 89 29 225 225 225 225 225 225 225 100 100 100 100 100 100 100
Thus, after calculating the average of the frequencies of 14 parameters and having the percentage analysis, null and alternative hypothesis is formulated for applying z-test using MS-Excel. H0: Proportion of respondents stating that retailing practices are changing is equal to0.5 P = 0.5 H1: Proportion of respondents stating that retailing practices are changing are greater than0.5 P > 0.5 = 0.05 This is RIGHT tailed test Total population frame (N) = 800 Total sample taken for the study (n) = 225 No. ofrespondents favoring change = 132 No. ofrespondents not favoring change = 93 Sampling framing = n / N = 225/800 = 0.28125
As sampling fraction is greater than 0.05, finite population multiplier must be used. Finite multiplier = SQRT ((N-n) / (N-1)) = 0.848321615 S = Proportion of respondents stating that retailing practices are changing are = 0.5866 Proportion of respondents stating that retailing practices are changing are greater than 0.5 (Q) = 0.41 = standard error = SQRT(P.Q/n) * Finite multiplier = SQRT(0.59 * 0.41 / 225) * 0.848321615 = 0.02781 z = (S P)/ = (0.5866 0.59) / 0.02781= 0.12 (ignoring ve sign)
The tabled value of z is = 1.64 and calculated value is 0.12. As calculated value value is in critical region, Null Hypothesis is rejected & alternative hypo is accepted.. So, retailing practices in grocery trade are changing. FINDINGS BASED ON PERCENTAGE ANALYSIS: According to small grocery shop keepers retailing practices are going through the change in terms of the above parameters. The majority of the small grocery shop keepers ( 87.5 %) are not concerned about the large space provided by hypermarkets. The majority of the small grocery shop keepers state tht there is no major change ( 62.2%) in the billing system. The majority of the small grocery shop keepers ( 76.88%) feel that there is change inattitude towrds maintaining ambience of retail outlets. There is no major change ( 100%)in the credit card facility is provided by small grocery shop keepers as they don,t have it. The majority of the small grocery shop keepers (79.55%) small grocery shop keepers have the credit facility those who were not providing it previously ,slowly started giving. Number. of shop keepers (72.88 % ) state that the grocery products in their shops are costlier as compared with the prices of the grocery products from the hypermarkets because of different distribution channels so the small grocery shopkeepers have made the changes in the wholesalers.. The majority of the small grocery shop keepers (74.22 %) state that hypermarkets do have larger varieties and these factors are considered as a matter of attraction for increasing the customer's demand so the small grocery shop keepers started improving their relationship with customers so as to know the customers preferances According to sgs this is the major change in their business. Selling in loose quantity is one of the major strengths of the small grocery shop owners. Small grocery shop keepers have the customers who used to buy in loose quantity.. Small grocery shop keepers have the customers who used to buy in loose quantity. According to Number of Small grocery shop keepers (55.55 % ) previously they ware not have ing multiple counters after the emergence of hypermarkets on the scene slowly customers are demanding for it as they don't want to spend more time in the shop . Majority of the small grocery shop keepers (%) don't offer the discount on the MRP while few SGS keepers offer the discount to some selected customers known to them. Small grocery shop keepers are having hardly one or two employees working as supporting staff (56.8% ) of the respondents state that after the emergence of hypermarkets whare ample number of supporting staff is available ,understand the importance of supporting staff .. The majority of the small grocery shop keepers (76.88%) do provide home delivery facility to their customers.previously the focus was not provided on this parameter.. so the change is creepeing in after the arrival of hypermarkets . The majority of the small grocery shop keepers don't advertise like hypermarkets .according to them (76.11 % ) this is the major change coming in the business by the organised retailors . DISCUSSION ABOUT WORKING OF RETAIL FORMATS The present study has given the stress on examining the working of different retail trade formats. Viewed from this angle, the present study becomes unique as such an attempt has not been undertaken here in before to the best knowledge of researcher. Many researchers have studied supply chain process, distribution channels and the retail mix. But, the working of retail trade formats, though very important, was not properly concentrated upon. It is for this that the researcher decided to concentrate upon the working of different retail trade formats. A notable feature of the present study is that it has established a direct correlation between different parameters and working of retail trade formats. Parameters like home delivery, loose quantity, ambience, parking, discount facility etc. have an important bearing on the working of retail trade formats. The researcher is of the view that these parameters have helped him in distinguishing the peculiar aspects of both organized and unorganized retail trade. Some of the researchers have studied these
parameters and their impact on the working of retail trade formats. They have come to the conclusion that the hypermarkets do have an adverse effect on working of SGS. However, the researcher, in the present study has found that hypermarkets have no adverse effect on the working of the SGS in Kolhapur city. The various reasons for this have already been explained. The working of retail trade formats depends upon the customer demand in the market. So it is natural for both SGS and hypermarkets to introduce novel schemes in order to attract the customers. Some of the specialized schemes include home delivery, credit facility, selling in loose quantity etc. Some of the specialized schemes adopted by the hypermarkets include offers to the customers, price discounts on MRP etc. HYPOTHESIS: Unorganized retail trade in grocery makes the progress than organized retail trades. JUSTIFICATION FOR FORMING THE HYPOTHESIS: Grocery retail trade in Kolhapur city consists of small grocery shop keepers called as unorganized sector of retail trade and hypermarkets are called as organized sector of retail trade in grocery. During the process of study and on the basis of the interviews of SGS, researcher has found that no of small grocery shop keepers has increased during the period under observation. It has been observed that impact of certain parameters like space and no. of counters have very little effect on the growth of small grocery shop keepers. So, the researcher felt that the growth of unorganized retail trade is to be studied elaborately and for this purpose, this hypothesis is formulated. H0:- Unorganized retail trade has made no progress than organized retail trade H1:- Unorganized retail trade has made progress than organized retail trade. This hypothesis is tested using CAGR Definition of 'Compound Annual Growth Rate - CAGR' The year-over-year growth rate of retail trade, over a specified period of time is given in terms of compound annual growth rate which is calculated by taking the nth root of the total percentage growth rate, where n is the number of years in the period being considered. The formula for CAGR is
Source : Financial Management by I. M. Pandey published by Vikas publication pvt. Ltd., Delhi, 2009 TABLE SHOWING GROWTH OF ORGANIZED AND UNORGANIZED RETAILERS
Sr. No. 1 2 3 4 5 6 7 8 9 10 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 No. of Organized Retailers 3 3 3 3 3 3 4 14 14 8 No. of Unorganized Retailers 209 (Beginning Value) 273 317 384 453 517 607 667 704 797 (End Value)
Using the above formula, Compounded Annual Growth Rate of Small Grocery Shops = 14.32% Similarly compounded annual growth rate of hypermarkets = 10.30 %
RESULTS: 1) Thus CAGR of unorganized retail trade is 14.32% while it is 10.30% in case of organized retail trade. 2) From the table researcher can observed that Kolhapur has dominated by departmental stores like Janata Bazaar and Pariwar till 2005. 3) After 2005, the world has experienced the exponential growth in the retail industry. India is no exception for it. 4) After 2008, the consistent decline has been observed in Kolhapur. The Shetkari Bazaar was functioning in Kolhapur city. 5) In 2007 it has been take over by another hypermarket called Magnet. Within 1 years time Magnet has to close its operations from Kolhapur. 6) At the same time Vishal, the hypermarket entered into the retail market of Kolhapur city, but data suggests that the performance of the Vishal hypermarket is poor. 7) Thus, the performance of hypermarket is irregular and inconsistent while the growth of unorganized retail trade is consistent. FURTHER ANALYSIS USING PAIRED T-TEST: As per the suggestions given by honorable jury, in order to compare the growth of two different samples, paired t-test is used by the researcher in addition to CAGR.
Sr. No. 1 2 3 4 5 6 7 8 9 10
Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
No. of Organized Retailers 3 3 3 3 3 3 4 14 14 8
No. of Unorganized Retailers 209 273 317 384 453 517 607 667 704 797
XA=organized = 5.8, Sorg=4.59, norg = 10 XB=unorganized = 492.8, Sunorg=198.41, nunorg = 10 SP = SQRT( ((norg 1).(Sorg)2+(nunorg 1).(Sunorg)2 )/( norg + nunorg -2)) = SQRT( ((10 1).(4.59)2+(10 1).(198.41)2 )/( 10 + 10-2)) = SQRT((9x21.0681+9x39366.5 )/ 18) = 140.33
The lower limit of acceptance region is, t = -1.734 at = 5% for one tailed test. X org - X unorg = 0- t x SP x SQRT( (1/ norg) + (1/ nunorg)) = - (-1.734) x 140.33 x SQRT( 0.1+0.1) = 108.82 And observed t value = ((X org - X unorg) (org-unorg))/ (SP x SQRT((1/ norg) + (1/ nunorg)) = ((5.8-492.8) 0) / (140.33 x SQRT( 0.1+0.1)) = - 7.76 Which is < -1.734 Hence, we reject the null hypothesis and accept the alternative hypothesis. So, average yearly unorganized stores opened are more than average yearly organized stores opened. FINDING AND DISCUSSIONS : Structural change in Retail Trade in grocery It has been observed by the researcher that there is a noticeable structural change in the retail trade format. The retailers who were formally having very small shops have switched over to more specious shops in some cases. One more aspect is that with the passage of time, some new retail formats have emerged e.g. departmental stores, consumer co-operatives and hypermarkets. This structural change was necessitated by the growing customer demand, changing marketing practices and the retailers desire to expand his business. System change in the Retail Trade in Grocery In so far as a change in the system of retail trading is concerned, it has been observed that some prominent changes have come into operation due to the changing pattern of retail trading. The most important change is the computation of different trading operations. This has reduced considerably the burden of manual work. Multiple counter systems are one such change which needs special mention because it is considered as an innovative change in the system of operations. It has been observed that retailers and particularly hypermarkets have started to have their own godawns so that they don't face the problem of storage. Again providing all the commodities less than one roof has made it convenient for the customers to purchase as many goods of various types as they desire. Change in services to be provided ( In the field of services offered to customers, the most important change is the merchandising of the products. Here the customers are exposed to all the verities and brands of the products in an attractive manner. This makes it convenient for the customers to choose the product that he or she likes. One more change is known as a 'Touch and Feel'. Here the customers can handle the product and so they feel the nature, quality, package and softness of the product. Change in Retail Formats The grocery retail trade in Kolhapur city is dominated by unorganized retailers i.e. small grocery shop keepers. Kolhapur city has few chain stores in the past but had to close down within year's time. Kolhapur city has four hypermarkets. Thus, city of Kolhapur has experienced a change in retail trade formats in grocery from small grocery shops to hypermarkets. RETAIL FORMATS DISCUSSIONS The present study aims at analyzing the different retail formats in Kolhapur city. The researcher has observed that this type of study is unique in itself because to the best information of the researcher, no such study was undertaken. It is also to be noted here that the present study has categorically elaborated both organized retail trade and unorganized retail trade. Not only is this but an attempt made to examine the complementary of these two formats and the researcher has found that there is a better understanding and spirit of co-operation between these two retail formats. During the course of the study, the researcher has found that the two formats namely SGS and hypermarkets have established themselves in the city of Kolhapur. However, the formats like chain
stores were started but had to be closed down as an impact of economic slowdown and a noticeable fall in the customer demand. A salient feature of this study is that it has specifically year marked the area in square feet for the SGS, which have an area of not more than 400 sq. ft. have been considered. This is so because almost all the SGS contacted by the researcher fall in this category of area. However no specific area was considered in case of hypermarkets because they are necessarily known to have an area of more than 18000 sq. ft. While collecting the data for this study, the researcher has found that almost all the hypermarkets are located in only one ward of Kolhapur city known as 'E' ward. The researcher in order to have a comprehensive study has considered 30 SGS from four other wards namely 'A', 'B', 'C', and 'D'. Thus a total of 225 retailers have been considered for the purpose of the study. One more important aspect needs to be mentioned here. The researcher has considered 105 small grocery shop keepers from only 'E' ward. This is so because all the hypermarkets are in this ward only and to know the impact of these hypermarkets on SGS, the researcher has considered many SGS along with all the hypermarkets. This has helped the researcher to know how SGS are surviving even when faced by severe competition. During the process of the study, the researcher has undertaken the analysis of working of wholesalers. Generally, the customers of wholesalers are entirely different from those of SGS. However, the workings of wholesalers have direct impact on hypermarkets as they provide the grocery in bulk to the number of hypermarkets in Kolhapur city. The researcher still thinks that comparative analysis related to the interdependence between SGS, wholesalers and hypermarkets needs to be undertaken in the future. The city of Kolhapur is a developing city. As such, there is a curious combination of both the traditional way of trading and the modern formats like hypermarkets. It is also observed that SGS in Kolhapur city are very small as compared to SGS in metropolitan cities like Mumbai and Pune. Even the hypermarkets in Kolhapur city are in the survival stage of working as compared to the established hypermarkets in the cities like Mumbai and Pune. Thus, this uniqueness of both SGS and hypermarkets has helped the researcher in analyzing their working in more details and with positive approach. It is noticed by the researcher that the small grocery shop owners in Kolhapur city have come to understand the impact of fast changing market environment. In order to surviving the situation, they have started to renovate their shops, to provide better services to the customers and to have personal contacts with the customers in order to win over their confidence. BIBLIOGRAPY : REFERENCE BOOKS THESIS REFERRED
1. GOKAKKAR RB, A STUDY OF BANKS MARKETING STRATEGIES OF SELECTED BANKS (13553, SHIVAJI UNIVERSITY) 2. JADHAV BS, IMPACT OF ADVERTISING ON CONSUMPTION PATTERN OF URBAN CONSUMERS IN SELECTED COMMODITIES (13629, SHIVAJI UNIVERSITY) 3. PATIL PB, MARKETING STRATEGIES USED FOR DEVELOPING TOURISM IN WESTERN MAHARASHTRA, (13791, SHIVAJI UNIVERSITY).
INTERNATIONAL JOURNALS AND MAGAZINES

1. AGRICULTURAL AND RESOURCE ECONOMIC REVIEW 2. EN VIRONMEN T AND PLANNING, VOL 36 , 2004 3. INTERNATIONAL JOURNAL OF RETAILIN G AN D DISTRIBUTION MANAGEMEN T VOL 34 , 2008
NATIONAL JOURNALS REFERRED FOR THE STUDY

1. ENVIRONMENT AND PLANNING VOL 36 , 2004 2. IN DIAN JOURNAL OF MARKETIN G JAN 2008 3. IN DIAN MANAGEMENT 2005 4. VIKALPA V OL 28 2003

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Indian Streams Research Journal

khadilkar s. m. Research Papers

Does organised retailing is Rreally Growing in India ?

khadilkar s. m. Associate professor KIT s IMER KOLHAPUR

Does organised retailing is Rreally Growing in India ?

Indian Streams Research Journal

Does organised retailing is Rreally Growing in India ?

Indian Streams Research Journal

SGS Keepers No. of Respondent s 225 0 225 %

Aware Unaware Total

Hypermarket authorities No. of % Respondent s 3 100 0 3 0 100

Wholesalers No. of Respondent s 5 0 5 %

Does organised retailing is Rreally Growing in India ?

Indian Streams Research Journal

Yes Responses 197 85 173 0 179 164 167 77

Does organised retailing is Rreally Growing in India ?

Indian Streams Research Journal

Does organised retailing is Rreally Growing in India ?

Indian Streams Research Journal

Does organised retailing is Rreally Growing in India ?

Indian Streams Research Journal

No. of Organized Retailers 3 3 3 3 3 3 4 14 14 8

Does organised retailing is Rreally Growing in India ?

Indian Streams Research Journal

Does organised retailing is Rreally Growing in India ?

Indian Streams Research Journal

INTERNATIONAL JOURNALS AND MAGAZINES

Does organised retailing is Rreally Growing in India ?

Indian Streams Research Journal

NATIONAL JOURNALS REFERRED FOR THE STUDY

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