Are Kirana Stores Dead??

Kirana Stores have been news for some time now. They constitute the bulk of retailers in the country today. And the worry is that with the advent of organized retail these mom and pop shops would close and lead to unemployment problems. This is the main argument behind stopping FDI from coming into organized retail.
The blog is not about the pros and cons of letting FDI in retail it is about how both the parties in the game, the organized retailers and manufactures are trying to collaborated with them.

The branded manufacturers have had a comfortable run in the Indian markets till now owing to the unorganized and fragmented nature of retailing in the country. They were all powerful and could dictate their won terms to the retailers, but this is changing slowly with the advent of organized retail. Companies like HLL have been forced to change their terms, and conditions and margins that they have been providing to the bigger organized retailers, they have even started appointing exclusive managers to handle these large accounts. To counter the power HLL has started some thing called `Super Value Store' programme, where the kirana stores are being refashioned to look like modern retails shops, the company buys shelf space, give retailers an additional three percent discount and provide retail training and solutions to retailers. The company claims it is a win-win situation for both the parties. The retailer gets more business and HLL more visibility,. The company is targeting close to 15-20000 shops for the programme.

The organized retailer is also looking at leveraging the kirana stores to their advantage. Reiance is said to be planning to supply it's own private brands to the local retailers in around its retail outlets. This acknowledging the fact that kirana retail as a phenomenon is not going to disappear and secondly by selling their private brands, they will have increased turnover, and the retailer would also gain from having more margins. This is also done with an aim to counteract the power of the branded manufacturers.

Thus though people would like to claim that Kirana stores will die, all the major players want to partner with them in the retail revolution that is sweeping the country.