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Smart shopping for sabzi
Consumers are sure to be spoilt for choice as shopping for fruits and vegetables, milk and dairy products becomes a hassle-free experience.
Ruchika M. Khanna looks at the impact of these retail marts which are fast coming up
With the entry of corporates in the agri-retail business, this sector is fast evolving from the weekly market format to convenience stores, current day malls, supermarkets and hypermarkets. And this retail revolution is not going to be restricted to the metropolitans or the category I and category II towns. The booming Indian economy has opened the doors for these stores to set shop in towns like Barnala and Samrala in Punjab to Pehowa and Shahabad Markanda in Haryana. Ask Narinder Kaur, a resident of Samrala, who is now buying her groceries from the Godrej Aadhar store in her small town. "Earlier, I would go to Ludhiana for my shopping, but now I can get a good shopping experience here itself," she says. Her views are supported by Navdeep Kapoor, a senior official in Spice Telecom at Chandigarh. He says that with the opening of agri-retail stores, the upwardly mobile like him do not mind shopping for their veggies and fruits. "Earlier, we would rely on our servants to buy the vegetables from the neighbourhood shops or the vegetable and fruit vendors. With the opening of these stores in the city, we have started buying our weekly supply at our time and convenience. These stores offer a variety of exotic vegetables and imported fruits to choose from. The fruits and vegetables are available at same price, and sometimes lesser price, than at the sabzi mandi," he says.
Now, with DCM Sriram Consolidated’s Hariyali Kisan Bazar, Reliance Fresh, Subhiksha, Spencers Retail, Food Bazar, Godrej Agrovet, Adani Agri Fresh and of course, Bharti-Walmart, all set to spread their wings across Indian cities, buying your fruits, vegetables and groceries will never be the same again. With these retail majors all set to woo the customers with the choicest of fruits and vegetable in air-conditioned and clean environs of a showroom, and without causing a dent in your household budget, the agri retail sector will see a metamorphosis in the coming three to five years. Boom in retail With the retail mart business in the country now pegged at $ 12 billion (accounting for just three per cent of the total market), it has tremendous growth potential in the fast-expanding Indian economy. Organised retail in the Rs 1,45,000 crore fruit and vegetable business, is estimated at about Rs 300 crore. In the last three months, over 60 outlets have opened across the country. Fresh food accounts for 50 per cent of the food and grocery bills in India, as compared to 15 per cent in the USA. No wonder that 4 lakh square feet of retail space has been dedicated to fresh food retailing in the country. And this is just the beginning`85 King consumer
The largely agrarian economy of India has been in the doldrums, with the production per acre having reached a plateau and the area under agriculture declining rapidly. With a staggering growth rate in agriculture (2.3 per cent) and high rural indebtedness, the boom in agri-retail is expected to fuel growth in the agriculture sector, besides improving the financial condition of farmers. Punjab has gained infamy for having the third largest extent of rural indebtedness in the country, after Andhra Pradesh and Tamil Nadu, with the highest magnitude of indebtedness in rural households in the country (with per capita debt of Rs 41, 576). In Haryana, too, over 53 per cent farmer households in are under debt, with an average outstanding per capita debt of Rs 26,007. Seeing the boom for apple growers in Himachal Pradesh and mango growers in Ratnagiri, Maharashtra, after their produce was picked up by corporates last year, NABARD, too, is recommending that farmers gear up and form producer groups so that they can tie up with agri-retail majors for selling their produce. Krishan Kalra, Secretary General of PHD Chamber of Commerce and Industry, says that with 700 million people seeking employment in agriculture sector, and its slow growth, the only way out will be to ensure increase in productivity per acre and increase in productivity per man—which could be helped with the financial and technological assistance of the corporates entering into agri-retail. Win-win situation
development of organised retailing will lead to increased efficiency in the agriculture sector and remove intermediaries in the food supply chain. With investments in upgrading technology and agricultural practices in the entire value chain, including production, packaging, grading, storage and logistics, the current levels of wastage, ranging between 24 per cent to 40 per cent, are expected to come down drastically. Impact on market Though the blitzkrieg on organised retailing having caught the fancy of the economists and policy markers in the country, not a single independent study has been conducted to examine the impact of organised retail on the 12 million small shopkeeper, 40 million hawkers and 200 million small farmers. While the government functionaries and industry leaders dismiss all fears of this leading to unemployment, experiences from countries like USA and UK, where organised retail occupies 70 – 90 per cent of the total retail business, suggests that they have a direct influence on the small and unorganised players in the market. A recent study conducted in the USA, measured the impact of Wal-Mart’s retail boom on prevailing poverty. Even when the poverty rates were down across USA, states were the retail major had set up its operations had led to displacement of workers from small shops; and, destruction of local entrepreneurship. As organised retail becomes a reality in India, a section of economists fear that unfettered FDI in retail could further compound existing poverty. With FDI in agriculture sector being allowed without first dealing with the agrarian crisis in the country, many fear that the objective is to transfer the unwanted and risky technology of genetic engineering on plants and animals in India. "We must ensure that agriculture is not sacrificed at the cost of industry," says Rajesh Krishnan, Campaigner for Greenpeace. However, industry rubbishes these fears and says that a boom in agri-retail is the only way to revive a slackening growth in agriculture sector. A study by the Confederation of Indian Industry (CII) and Pricewaterhouse Coopers (PwC) suggests that the development of organised retail will generate an additional eight million jobs, directly and indirectly. The study, The Rising Elephant: Benefits of Modern Trade to Indian Economy, suggests that by year 2020, India will lead in the retail sector. Allaying fears of FDI in retail creating unemployment by wiping out the kiryana stores, the study said that only those working in one lakh mid- category stores were likely to be displaced in the mid-term, as against the workforce employed in 12 million retail outlets across the country. In the long run, the metamorphosis in this sector would lead to the redeployment of this workforce also.
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India is undoubtedly
emerging as the hotspot on the global retail map, especially after the
opening of the retail sector to foreign direct investment. The concept
of agri-retailing was first brought to India by Mother Dairy in Delhi,
in the early 1980s.
As Rajan Bharti Mittal,
Joint Managing Director, Bharti Enterprises, says, "The boom in
this sector will not only benefit millions of consumers, but also
farmers, small manufacturers and artisans. This sector will also offer
enormous direct and indirect employment opportunities while attracting
huge investments in building the supply-chain infrastructure, adding
to economic growth of India, especially in the rural areas".
Bharti, along with Walmart, will be investing Rs 11,000 crore to set
up retail stores across the country, by 2011.
