Organized Retailing and Its Impact On Traditional Retailing in India: A Case Study of Guwahati City

International Journal of Social Science and Economic Research
ISSN: 2455-8834
Volume:02, Issue:08 "August 2017"
ORGANIZED RETAILING AND ITS IMPACT ON TRADITIONAL

RETAILING IN INDIA: A CASE STUDY OF GUWAHATI CITY
Babita Kalita
Research Scholar, Gauhati University, India
ABSTRACT
The retail industry in India is highly fragmented and unorganized. Earlier on retailing in India
was mostly done through family-owned small stores with limited merchandise, popularly known
as kirana or mom-and-pop stores. But Retail is one of the fastest growing sectors in the world.
Presently, Indian organized retail constitutes 8 per cent of the total retail market and it is growing
much faster than traditional retail. It is expected to gain a higher share in the growing pie of the
retail market in India. Various estimates put the share of organized retail as 20 per cent by 2020
(Deloitte, 2013). . Unorganized retailers in the vicinity of organized retailers experienced a
decline in their volume of business and profit in the initial years after the entry of large organized
retailers.Organized retail has adverse impact on sales of unorganized retailing and profit weakens
over time. There is some decline in employment in the North and West regions. The rate of
closure of unorganized retail shops in gross terms is found to be 4.2 per cent per annum. The
study is descriptive in nature and collect data from primary and secondary sources. This paper
studies about present status of organized retailing in India and its impact on unorganized retail.
Keywords: Organised retailing, Unorganised retailing, Super Market, FDI, sales turnover
INTRODUCTION
Retailing can be said to be the interface between the producer and the individual consumer
buying for personal consumption. This excludes direct interface between the manufacturer and
institutional buyers such as the government and other bulk customers. Retailing is the last link
that connects the individual consumer with the manufacturing and distribution chain. A retailer is
involved in the act of selling goods to the individual consumer at a margin of profit. In 2004, the
High Court of Delhi defined the term ‘retail’ as a sale for final consumption in contrast to a sale
for further sale or processing (i.e. wholesale). Retail is one of the fastest growing sectors in the
world, organised retail constitutes only around 4% of the total retail sales in India, compared to
www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4009

ISSN: 2455-8834
75-80% in developed countries such as USA, Japan and UK. In India, organized retailing is
spreading fast, though the growth is currently focused. India's retailing industry is essentially
owner manned small shops. India's retail and logistics industry employs about 40 million Indians
(3.3% of Indian population). The retail industry in India is highly fragmented and unorganized.
Earlier on retailing in India was mostly done through family-owned small stores with limited
merchandise, popularly known as kirana or mom-and-pop stores. In those times, food and
grocery were shopped from clusters of open kiosks and stalls called mandis. There were also
occasional fairs and festivals where people went to shop. In the twentieth century, infusion of
western concepts brought about changes in the structure of retailing.
The retailing sector is divided into two- organized and unorganized retailing. The sector is highly
fragmented with 97% of its business being run by the unorganized retailers like the traditional
family run stores and corner stores, while organized retail sector covers only 3% out of total
retail sector. Organized retailing refers to trading activities undertaken by licensed retailers, that
is, those who are registered for sales tax, income tax, etc. These include the corporate-backed
hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganized
retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example,
the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand
cart and pavement vendors, etc. Presently, Indian organized retail constitutes 8 per cent of the
total retail market and it is growing much faster than traditional retail. It is expected to gain a
higher share in the growing pie of the retail market in India. Various estimates put the share of
organized retail as 20 per cent by 2020 (Deloitte, 2013). The recent wave of reforms by the
Government to incentivize Foreign Direct Investment (FDI) in various sectors is bringing a new
zeal to the investment climate in India. Since liberalization in early 1990s, many Indian players
like Shoppers Stop, Pantaloon Retail India Ltd (PRIL), Spencer Retail ventured into the
organized retail sector and have grown by many folds since then. These were the pioneers of the
organized Indian retail formats. With the opening up of foreign direct investment in single-brand
retail and cash–and-carry formats, a new chapter unfolded in the retail space. Many single-brand
retailers like Louis Vuitton and Tommy Hilfiger took advantage of this opportunity. The cash-
and-carry format has proved to be an entry route for global multichannel retailing giants like
Metro, Wal-Mart and Tesco.
PRESENT STATUS OF ORGANIZED RETAIL SECTOR IN INDIA
The phenomenal growth of retail in India is reflected in the rapid increase in number of super
markets. The Indian retailing sector is at an inflexion point where the growth of organized
retailing and consumption by the Indian population is going to take a higher growth trajectory.
The Indian population is observing a noteworthy demographics change. An increasing young

ISSN: 2455-8834
working population under age of 24 years, sharp rise in the per capita income, an increase of dual
income nuclear families in the urban areas, along with increasing working women population,
internet revolution and emerging opportunities in the services sector are going to be the key
growth drivers of the organized retail sector in India. The whole model of shopping has altered in
terms of format and consumer shopping behavior pattern, which ultimately could lead to a
shopping revolution in India. India has highest unorganised retail outlet density in the world i.e.
11 outlets per 1000 people. However, only four per cent of them have larger than 500 square feet
area. The advantages for unorganized retail sector or traditional retailing are low cost structure,
low real estate and labour costs.
Organized retail is expected to garner about 16-18 percent of the total retail market (US $ 65-75
billion) in the next 5 years. According to the tenth report of GRID of AT Kearney, India is
having a very favorable retail environment and it is placed at 4th spot in the GRDI. The main
reasons behind that is the 9% real GDP growth in 2010, forecasted yearly growth of 8.7%
through 2016, high saving and investment rate and increased consumer spending. According to
report, organized retail accounts for 7% of India’s roughly $435 billion retail, market and is
expected to reach 20% by 2020. Food accounts for 70% of Indian retail, but it remains under
penetrated by organized retail. Organized retail has a 31% share in clothing and apparel and
continues to see growth in this sector. A report by Boston Consulting Group has revealed that the
country’s organized retail is estimated at US $ 28 billion with around 7% penetration. It is
projected to become a US $ 260 billion over the next decade with around 21% penetration. The
analysts believe that the sector is likely to show significant growth of over 9% over the next ten
years and also see rapid development in organized retail format with proportion likely to reach
more respectable 25% by 2018. Unorganized retailers in the vicinity of organized retailers
experienced a decline in their volume of business and profit in the initial years after the entry of
large organized retailers.
Organized retail has adverse impact on sales of unorganized retailing and profit weakens over
time. There is some decline in employment in the North and West regions. The rate of closure of
unorganized retail shops in gross terms is found to be 4.2 per cent per annum which is much
lower than the international rate of closure of small businesses. There is competitive response
from traditional retailers through improved business practices and technology upgradation. A
majority of unorganized retailers is keen to stay in the business and compete, while also wanting
the next generation to continue likewise. Small retailers have been extending more credit to
attract and retain customers. However, only 12 per cent of unorganized retailers have access to
institutional credit and 37 per cent felt the need for better access to commercial bank credit.

ISSN: 2455-8834
CONSUMER- THE PRIME MOVER:
A variety of factors seem to influence the growth in the retailing industry. Consumer Pull,
however, seems to be the most important driving factor behind the sustenance of the industry. In
this context, in order to understand the spending pattern of the consumers of various income
groups an analysis of the monthly purchase basket of the consumers surveyed indicated that the
average monthly household spend on food and grocery related items varied across income
segments increases. For instance, in the case of upper income households, the average spend was
aroundRs.4,200 per month. As against this, the average spend in the case of a middle-income
household was around Rs.2,850 and lower income households Rs.1,250 per month. This is
computed from a sample of 120 customers having an average family size of four. Besides
increasing purchasing
power, a variety of other factors also seem to fuel the retailing boom. With increase in double
income households and working women, there is an increasing pressure on time with very little
time being available for leisure. In this scenario, consumers are seeking the convenience of one
stop shopping, whereby they could have better utility of time. They are also seeking speed and
efficiency in processing, as a result. Being more aware, consumers are on the lookout for more
information, better quality and hygiene as well as increased customer service. These changes in
consumer behavior also augur well for the retailing industry. However, in India there are no
uniform trends with respect to consumer buying behavior.
Organized retailing has definitely made headway in the upper class. However, even in this
segment, items such as milk, fruits, vegetables and a significant portion of through-the-month
purchases seem to be done at traditional outlets. The middle-income class prefers shopping for
processed food and personal care in supermarkets and fall back on traditional outlets for bulk
shopping. Organized retail outlets seem to be associated with branded items/special purchases.
Organized retailing does not seem to have made an impact on the lower class, except for
`curiosity’ shopping. The biggest question before organized retailers therefore, is whether this
really means a huge untapped potential for the organized retailers and whether the conversion in
mindset is going to be easy.
REVIEW OF LITERATURE
Parasuraman et al. (1980s) conducted an exploratory investigation in the attempt to define

service quality and develop a model of service quality. The results showed that regardless of the
type of service, consumers used basically the similar criteria in evaluating service quality .They
labeled those 10 criteria as “service quality determinants”. Since then, service quality was
defined through 10 dimensions:. Later, they were simplified into five dimensions including

ISSN: 2455-8834
Tangibles, Reliability, Responsiveness, Assurance and Empathy. Dawar & Parkar (1994):
Retailer’s reputation is a proxy for the retailer’s credibility and can stand for signal of quality.
The use of retailer’s reputation is specific when it applies to an assortment of products carried
within the store.
The sales impact on small shops is likely to be intensified and earnings will keep falling due to
the growth of organized retail malls (Anuradha Kalhan, 2005). Mohan Guruswamy et al (2005,
2006, 2007) emphasized the dangers of the FDI in India’s Retail Sector. They identified that
Indian retail requires more investment when its doors are open for organized retail through
Foreign Direct Investment, it will create an adverse impact on unorganized retailers, Indian
employment and on Indian manufacturers. In two different studies Mathew Joseph, et al (May
2008 and September 2008) of Indian Government Think tank ICRIER provided the view that
even though there is an impact of organized retail on unorganized retail, if organized retail does
not grow, the unorganized sector will not be able to handle the surging demand. Kiranas have
major disadvantages on all customer perception scores except location. There is more possibility
for the customers to shift to organized retail formats this was the view of Paromita Goswami et al
(2009). Traditional retailers have suffered a decline in sales after the entry of retail chains
(Sukhpal and Naresh, 2010). The need of the hour is to reengineer the operations of Kirana stores
otherwise the big giants will leave no space for them to grow. If the Kirana stores improve their
functioning and the area of operation be specified by the government then there will be win-win
situation for both the parties (Rani, 2013).
The ICRIER (2008) study found that the unorganized retailers situated near the organised
retailers were experiencing a decline in their volume of business and profit in the initial years
after the entry of large organised retailers. The impacts are expected to be “larger in the long run,
when the Organised retailing of food and grocery reach at least 25-30% of the total sales”
(Reardon and Gulati, 2008) 8. However, the consumers are gaining from low prices offered at
the shops of Organised retailers (Gaiha and Thapa,2007; ICRIER, 2008)
(Dawson, 1988) The unorganized retail sector face increased pressure from the organized
retailers, super stores. Further as the economy and society has changed, so have retailers and
shopping habits of consumers also altered enormously. Another study conducted by Morganosky
(1997), on the structural changes in the retail markets and their implications on consumers
revealed that due to the emergence of new retail formats, competition between retailers of
organized and unorganized is tightening with pervasiveness and complexity of consumer cross
shopping patterns across various retail channels.

ISSN: 2455-8834
OBJECTIVES OF THE STUDY
 To study impact of organized retail sector on sales of unorganized retailers.

 To know the present status of the organized retailer.
 To study the problem faced by small retailers vis-à-vis organized retailers.
Research Methodology
The present chapter describes the research methodology of the study. It presents the research
design, sampling procedure tools of investigation, collection of data and the limitation of the
study. The research has been done on two different elements
 Retailers
 Customer
The questionnaire has been formed for the research after doing pilot study and informal personal
interviews.
Nature of research: - My research design is descriptive in nature. The study is conducted to find
the awareness and perception of the customer and the impact on small scale or unorganized
retailer of the organized retailer. To know the strategy employed by small retailers to remain
competitive with organized retailers and the problem faced by small retailers vis-à-vis organized
retailers. The design is used to produce a clear picture of the retail sector in Guwahati.
Sampling Plan (Retailers and Customers)
The sampling units for the primary study consist of retailers and customers who are from the city
Selected cities of Punjab. Sampling size for the primary study is 100 retailers and 1000
customers. The method of selecting sample for retailers is simple random sampling techniques.
Questionnaire is used to collect the data from the respondents.
Sampling technique: - Simple random sampling.
Universe: - All the unorganized retailers and customers.
Population: - All the active unorganized retail outlets and customers in Guwahati.
Sampling unit: -The unorganized retailers and customer of Selected cities of Guwahati.
Sample Size: Primary data has been collected from 248 respondents (125 customers from
organized retail and unorganized retail outlets, 3 organized and 120 unorganized retailers. These

ISSN: 2455-8834
248 respondents were selected by convenience sampling technique of Probability random

sampling.
RESULT AND DISCUSSION
1. Evolution of Indian retail
Historic/rural Traditional reach Government support Modern format

reach
Exclusive brand outlets ,
PDS outlets , khadi hyper or super markets,
Convenience stores stores, cooperatives departmental stores,
Weekly markets, Mom and Pop/ Kiranas shopping mall
village fairs,
melas
Source of Neighborhood stores Availability / low cost Shopping experience and
entertainment efficiency
2. EVOLUTION OF ORGANIZED RETAIL IN INDIA
Initiation conceptualisation expansion consolidation

Pre 1990 1990-95 2005-10 2010 onwards
Manufactures 1.pure play retailers 1..Substantial 1. Retail2020:Retrospect,
opened their realized the potential of the investment reinvent, rewrite
own outlets market commitment by 2. Movement to smaller cities
2. Most of them in apparel large India and rural areas
segment corporate 3. More than 5-6 players with
2. Entry in food revenues over USD1
and general trillion by 2020
merchandise 4. Large scale entry of
category international brand
3. Pan India 5. FDI in single brand retail
expansion to top upto 100 percent from 51
100 cities %
4. Repositioning 6. Approval of FDI limit in
by existing players multi brand limit upto 51
%
7. Rise in private label brands
by retail players
8. Sourcing and investment
rules for super markets
were relaxed
ISSN: 2455-8834
9. E commerce has emerged

as one of the more
segments
According to the National Accounts Statistics (NAS) of India, the organized sector comprises
enterprises for which the statistics are available from the budget documents or reports etc. On the
other hand the unorganized sector refers to those enterprises whose activities or collection of data
is not regulated under any legal provision or do not maintain any regular accounts.
2. Major Player in Indian Organized Retailing:
1. Tata Group:
Landmark (Books and music), Croma (Multi Brand Electronics), World of titan (Watches),
Tanishq (Jewellery), Titan Eye+ (eye wear), Westside (life style retail store), Star Bazaar (hyper
market chain), Fashion Yatra (family fashion store)
2. Future Groups :
Central (shopping mall), Big Bazaar (Hyper Market), Pantaloons (fashion outlet), Blue Sky (Sun
glasses0, Brand Factory (Multi Brand readymade Garments), KB’s Fair Price (Essential
Products), Navaras (Jewellery), Planet Stores (Multi brand sports and life style specialty retail),
aLL (fashion garments), Ethnicity (Indian ethnic wear) Home town (Home needs), E Zone
(Electronics), Furniture Bazaar (Home furniture), Electronics Bazaar (under Big Bazaar
Electronics Stores), Home Bazaar (satellite version of home town), collection I (Lifestyle
furniture), Gen M & One Mobile(Mobile phones), M-Port (Electronics), Shoe Factory (footwear)
and Depot (books and music)
3. Reliance Group:
(super market), Reliance super(mini mart), Reliance digital (Consumer durables and information
technology), Reliance Trends (Apparel and accessories), Reliance wellness (health, wellness and
beauty), I store (apple products), Reliance footprint (footwear), Reliance Jewels (Jewellery),
Reliance Time out (Books, Music and Entertainment), Reliance auto zone (Auto Mobile
Products and services), Reliance Living (home wear, furniture, modular kitchen and furnishings)
4. RPG Group:

ISSN: 2455-8834
Spencer’s (multi-format retail store), Music world (music and home video store) and Books &
Beyond (Book Store )
DISTINCTION BETWEEN ORGANIZED RETAILING AND UNORGANIZED

RETAILING
Parameters of Difference Organized Retailing Unorganized Retailing
1.Scale of operation large small
2. Scope of operation Nationwide Highly unorganized

(managed ordinarily)
3. Person engaged More than 10 Less than 10
4. Number of stores Chain of stores Maximum 2-3 stand alone

shops
5. shopping experience Excellent or good Poor or fair
6 Employees Skilled, professionally trained Unskilled , untrained and less

and qualified qualified
7.Business of principle Principle of utility Principle of singularity
8. range of products Wide range of products Relatively narrow range of

ISSN: 2455-8834
products
9 Physical ambience pleasurable Lacking graciousness
10 parking facility Adequately available and Inadequate and unmanaged

properly managed
11 bargaining Not possible Possible to some extent
examples Wall mart, Mc Donald’s mother Counter stores, kiosks, street

diary, big bazaar, Amartax etc markets and vendors
3. Indian retail market ( Organized and Unorganized ) percentage share
year Organized (%) Unorganized (%)

2005 3.6 96.4
2007 4.1 95.9
2010 5.0 95.0
2012 8.0 92.0
2020(Expected) 24.0 76.0
Source : Deloitte (2013), “Indian Retail Market Opening more doors”, January,[13]

ISSN: 2455-8834
4. Majors factors leading to growth of organized retail sector in India
Increase in FDIs
Indian growing
changing
organised consciousness and
demographic economic growth
retail
Dual Income and

nuclear income
MAJOR RETAILERS IN GUWAHATI CITY
Guwahati is emerging as the fastest developing city in the entire North East region where
maximum organized retailing activity has taken place. The city commonly known as “The
Gateway of North East India” is said to have good commercial prospects. Being the economic
hub of the North East region, the city is witnessing considerable migration of population from
within the state as also from the neighbouring states. Residential units, individual houses, are
being developed in the form of apartment buildings in prime locations of the city.
Malls, Departmental stores, Supermarkets and large format stand-alone stores are coming up all
over the city. Brand –consciousness has caught up with the city’s youth and thus organised form
of retailing is flourishing in the region. Guwahati is among the Tier-II and Tier-III cities in the
country where mall based retailers are moving in on account of high rentals and low footfalls in
major metros. The city has some decent shopping options with few multi-brand malls and
shopping centers available. Guwahati is slowly catching up with the rest of Indian metro and
non-metro cities in terms of market openness and globalization. Though the shopping malls here
are not yet in par with their counterparts in other metros, still it’s a start in the right direction and
there are plans of major shopping and retails chains opening their outlets in this city. A brief
account of some major organised retailers operating their stores in Guwahati and other places of
Assam is discussed under the following heads:
The HUB

ISSN: 2455-8834
HUB is one of the first shopping malls in Guwahati which was opened in 2003 located on the
main GS Road, near Bhangagarh. The HUB is a 55,000 sq.ft mini shopping center and offers
variety of shopping options. The HUB is also a favorite destination for movie goers, as one of
main Cineplex in Guwahati-Fun Cinemas is located here.
Sohum Shoppe
Sohum Shoppe is one of the oldest shopping mall/center in Guwahati. The first store at Fancy
Bazar was opened in May 2001 and since then they have been expanding steadily as the
shopping mall culture is booming. The second store in GS Road was opened in June 2005), 3rd
store at Panbazar in October 2008 and they have setup stores in Dibrugarh and Jorhat.
Dona Planet
Dona Planet located at Christian Basti is yet another shopping plaza with multiplex theatre
Cinemax was inaugurated in December 21st, 2006.
Brand Factory
Brand Factory is a chain of stores operated by Pantaloons Retail India. It is a type of Discount
Store which offers at least minimum discount of 20% for its merchandise and targets customers
in the 20-35 years age group. The store has an average area around 60,000 sq ft and offers
around 120 brands like Van Heusen, Peter England, Levis, Esprit; etc. the store was launched in
2014 and witnesses a footfall between 500-1000 customers per day.
Vishal Megamart
It is a hyper market which targets customer from all age group and provides goods at very
affordable price. The first outlet in North-East region was opened in Guwahati at Amaze
Shopping Plaza, A T Road, Paltanbazar in the year 2005. The Ganeshguri outlet was opened on
18th October, 2014 and Kalapahar outlet was recently opened on 30th March, 2015. It also has
storeslocated in Tinsukia, Tezpur, Jorhat, Silchar, Dibrugarh.
Metro Baazar
This departmental store specializes in retailing of products at affordable prices. It offers products
like Kidswear, ladies and men wear, Accessories etc. It operates stores in Guwahati and
Agartala.
Pantaloon

ISSN: 2455-8834
Pantaloon is one of the biggest retailers in India with more than 450 stores across the country.
Headquartered in Mumbai, it has more than 5 million sq. ft retail space located across the
country. The store is located in the heart of the city near Downtown Hospital, GS Road (Figure
4.2.7). It was set up in 2008; the Guwahati store is the thirty eighth Pantaloons store in India and
is spread across 33,500 sq.ft. area, over three levels. The store provides great shopping options to
customers in apparel (men, women, kids & infants), footwear, sports apparel, accessories,
watches and sunglasses, fashion accessories, cosmetics, perfumes and fine jewellery. The entire
range of Pantaloons’ popular apparel brands such as, John Miller, Lombard, Indigo Nation,
Urbana, Scullers, RIG, UMM, BARE Denim, BARE Leisure, JM Sport, Ajile, Jealous,
Annabelle, Honey, Akkriti, Chalk, BARE 7214, etc, are available here. Pantaloon has become
one of the favorite shopping destinations for the people here.
Big Bazaar
The Future Group opened its first 75,000 sq. ft Big Bazaar outlet in April 2007 at Bhangagarh.
There are 42 Big Bazaar outlets in the eastern zone, four of which are in the Northeast. The Big
Bazaar outlet in Guwahati ranks number one in eastern India in terms of business. The outlet at
Bhangagarh posted a year-on year growth of 17-18% in 2013-14. The Guwahati outlet has an
average footfall of 5,500 to 7,000 customers. Fashion at Big Bazaar, the standalone fashion store,
with an average space of 15,000-25,000 sq,feet, was opened in the year Tinsukia, Silchar and
Sikkim.
Reliance
Reliance is one of the biggest players in Indian retail industry. More than 300 Reliance Fresh
stores and Reliance Mart are quite popular in the Indian retail market. Reliance recently came
with Reliance Trends. Reliance Retail started their fashion, apparel, luggage and accessories
specialty format ‘Reliance Trends’ in March 2012, spread over 25,000 sq.ft. area and the store
offers a mix of private brands and multi-brands across men’s, women’s and children’s
categories. Reliance Trends market mantra is ‘fashion at great value’.
V2 Family Fashion Store
V-2, the multi-brand Indian retail chain, came up with their first outlet North-East “V2” in the
year 2014 at Paltan Bazaar (Figure 4.2.10). The store provides merchandises like mens wear,
ladies wear, kids wear, footwear, household and lifestyle. The store currently runs 62 outlets in
52 locations of the country, is focusing on four destinations – Guwahati, Tinsukia, Dibrugarh and
Jorhat.

ISSN: 2455-8834
BENEFITS FOR THE CONSUMER
Consumers can derive many benefits buying their shopping and convenience goods from
organised retail outlets. The Unorganised retailers (Kirana stores, Local markets, etc.) suffer
from various drawbacks in terms of quality standards; proper packaging and also products are
purchased after the involvement of too many intermediaries, which makes the cost of goods
expensive. Some of the benefits for consumer buying from organised retail outlets are listed
below:
 The organised retail stores like supermarket, departmental stores, hypermarket etc tries
and ensures a wider range of products compared to Kirana stores or Local markets.
 These retail outlets can bring value to consumers in both shopping and convenience
goods.
 Consumers have the choice to look at different brands.
 Consumers also have a choice to look at qualities of the product and compare the prices
before making his/her purchase decision.
 Consumers easily get various commodities under one roof which saves their time.
 Consumers can opt for variety of goods at low prices.
Table 5: Sales Turnover in Unorganized Retail Stores before and after

Commencing Supermarkets
Sl No. Sales Before After

frequency percentage frequency percentage
1. Less than Rs. 1,00,000 56 46.6 65 54.1
2 Rs. 1,00,001- Rs. 1,50,000 19 15.83 36 30
3 Rs. 1,50,001-Rs. 2,00,000 25 20.83 10 8.33
4 Rs. 2,00,001-Rs. 2,50,000 12 10 5 4.11
5 Above Rs. 2,50,000 8 6.67 4 3.33
total 120 100.00 120 100.00
Source- primary data
The above table represents the approximate sales in unorganized Retail stores in a month. The
table is classified by the aspect of before and after commencing the supermarket. By this data
before commencing of supermarket, there are 46.6 percent of the unorganized retailers are
having an approximate sales turnover of less than Rs. 1, 00,000 in a month. And also 15.83
percent of unorganized retailers are having Rs. 1, 50,001- Rs. 2, 00,000 sales turnover.
By this data after commencing of supermarket, there are 54.1 percent of unorganized retailers are
having an approximate sales turnover of less than Rs. 1, 00,001 in a month. And also 30

ISSN: 2455-8834
unorganized retailers out of the 120 retailers are having Rs. 1, 50,001- Rs. 2, 00,000 sales
turnover.
Table 6: Average Buyer Patronage in Unorganized Retail Stores in Week Days before and
after Commencing Supermarkets
SL no customers Before After

1 25 and less than 25 17 14.1 45 37.5
customers
2 26-50 customers 25 20.8 35 29.1
3 51-75 customers 30 25 25 20.8
4 76-100 customers 23 19.1 9 7.5
5 Above 100 customers 25 20.8 6 5
total 120 100 120 100
The above table represents the average customer patronage in unorganized Retail stores in
weekdays i.e. Monday to Friday. The table is classified by the aspect of before and after
commencing the supermarket. By this data before commencing of supermarket, there are 20.8
percent of the unorganized retailers are facing an average of 26-50 customers in the week days. It
is concluded from the above that in Guwahati the quantum of patronage of unorganized retail
stores has considerably reduced during the week days. It is evident that patronage of more
number of buyers during the week days has mostly reduced to 26-50 customers per day. In short,
there is a reduction of buyer patronage during the week days in unorganized retail stores.
Table 7: Approximate monthly profit in unorganized retail stores before and after
commencing super market
Sl No profit before after

1 Less than Rs. 10,000 38 31.6 62 51.66
2 Rs. 10,000-Rs. 15,000 27 22.5 18 15
3 Rs. 15,001-Rs. 20,000 15 12.5 10 8.33
4 Rs. 20,001-Rs. 25,000 14 11.6 24 20
5 Above Rs. 25,000 26 21.6 6 5
total Total 120 100.0 120 100.00

ISSN: 2455-8834
Table 8: Quantum of sales volume in the last 3 years
Sl No class before after

1 Increased 78 67.8 24 20.9
2 Decreased 0 0 68 59.1
3 Remaining same 37 32.2 23 20.0
It is clear from the above that before commencing supermarkets, for 67.8 percent of retailers the
sales was increasing and for 32.2 of re the sales was stable. It is concluded that there was an
increasing trend of sales before commencing supermarkets in Guwahati After the
commencement of supermarkets, for 20.9 percent of unorganized retailers the sales is increasing;
for 59.1 percent of retailers the sales volume was declining and for 20 percent of respondents the
sales remain stable.
Table 9: Degree of Impact on the Employment in Unorganized Retail Stores
Sl no Status of workers frequency percent
1` Increase in workers O 0
2 Decrease in workers 60 87.0
3 No change in work force 9 13.0
total 69 100
The above table shows, 60 stores have decrease in workers after the commencement of
supermarket and no change in the workers are 9 stores. But there is no increase in the workers.
Table 10: Status of Workers Employed in the Conduct of Unorganized Retail Stores before
and after Commencing Supermarkets
Sl no status No of workers No of stores Mean Workers / Percentage

1 Before commencing 279 75 3.72
supermarkets
2 After commencing 184 75 2.45
supermarkets
change -95 -1.26
It can be concluded that the sales volume during the last two years is declining in Guwahati for
the unorganized retailers. Most of the unorganized retail stores are assisted by family members.

ISSN: 2455-8834
 Average number of workers employed before the establishment of a supermarket is 3.72

 After establishing a supermarket the average number of workers are 2.45
 After the establishment of supermarket, there is a reduction of workforce in the
unorganized retail stores. The inability to employ more workers reveals the reduced
financial strength of the retail stores.
Thus supermarkets paved the way for weakening the financial strength of unorganized
retail stores and thereby lead to the reduction of workforce. Moreover, establishment of
supermarkets might have contributed some share in aggravating the unemployment
problem in the region, as we cannot expect all the employees who lost their job might be
re-employed at such supermarkets.
 Commencement of supermarkets significantly reduced workforce in unorganized retail
stores.
 Commencement of supermarkets significantly influenced the unorganized retailers to
involve more family members in the conduct of their shops after the commencement of
supermarkets.
 In majority of the unorganized retail stores, the number of workforce has been reduced.
 The major reasons for the reduction of workforce were due to the decline in sales, profit
and ability to offer benefits like PF, ESI, etc.
 In the opinion of the unorganized retailers upper class buyers never patronize the
unorganized retail stores. It is also found that there exists a shift of customer base from
middle class segment to lower class segment of customers in unorganized retail stores. In
short in Guwahati, in majority of the unorganized retail stores there is shift of segment of
customers from middle class to lower class after the commencement of supermarkets.
 That patronage of more number of buyers during the week days has mostly reduced to
26-50 customers per day.
 Due to the commencement of supermarkets near to unorganized retail ,there is a
reduction of buyer patronage leading to reduction of sales volume and ultimately
reduction of profit.
 Reduction of sales volume has occurred in unorganized retail stores primarily due to the
commencement of supermarkets in their vicinity.
Suggestions:
1. For sustaining Unorganized Retail and to compete with organized retail sector the
recommended suggestions are given as below:

ISSN: 2455-8834
 Unorganized retailers should purchase variety of products from the single wholesaler to
avail adequate discounts so that they meet the cost expectations and needs of their
customers.
 The unorganized retailers should continuously improve their display to compete with the
organized sector.
 The unorganized retailers should provide adequate self service facilities to the customers.
 The unorganized retailers should offer cash discounts to customers on bulk purchases.
 The unorganized retailers should offer attractive weekly or monthly schemes for
groceries and other items and promote them through leaflets or pamphlets.
 If they target only “category killer” customers, it could help them to retain customers.
 Unorganized retailers should make remarkable changes in their store ambience to retain
the existing customers and attract new customers with sophisticated facility and more
space.
 The unorganized retailers should make a strategy to retain their customers by providing
quality goods and services because it is well said that “Quality is remembered long
after the price is forgotten.” – Gucci Family Slogan
 They should also go for collaborations within the regional level so that they can survive
in this globally competitive world.
2. For further improving Organized Retail sector in India the following are the
suggestions :
 The organized retailers should provide attractive offers to compete with the unorganized
sector.
 The organized retailers should offer lucrative schemes, discounts to generate costumers‟
stimulus.
 The organized retailers should provide necessary arrangements for home delivery of
goods.
 Organized retailers have been adding value to their products through prices, services and
offers to attract and retain customers.
 Organized retailers should organize efficient and effective loyalty programs. This could
help in providing recognition to the customers.
 Organized retailers should make necessary arrangements for consumer complaint
management because customer complaints are the schoolbooks from which they could
learn.

ISSN: 2455-8834
CONCLUSIONS
Supermarkets in Guwahati have created several impacts on unorganized retail stores. Major
impacts are reduction in sales volume, reduction in profit and involving family members in the
business in order to avoid the recurring cost through the salary of workers. The number of
workforce has been considerably reduced in unorganized retail stores. However the reason for
the reduction of work force not primarily due to the Super markets.
Another major negative impact created by the Supermarkets on unorganized retail stores is the
considerable reduction of loyal customer base. Due to the commencement of Supermarkets near
to the unorganized retail stores there is a reduction of sales, profit, customer base and loyal
customers. Day by day the unorganized retail stores are losing the class of customers visiting
their shop. These will lead to the slow death of the unorganized retail stores. No positive impact
has been created by the Supermarkets on the unorganized retail stores. Only positive change is
tha they are to attract their customers through neat arrangement. On the part of unorganized
retailers they have made no change in their stores. Some of the changes they have introduced are
not due to the commencement of Supermarkets. No unorganized retail store is offering door
delivery facility which is offered by the Supermarkets. In addition, the duration of working hours
and operation during the holidays are not followed. All the unorganized retailers are uncertain
about their future trade.
REFERENCES
Anuradha Kalhan (2005), “Impact of Malls on Small Shops and Hawkers”, Economic & Political
Weekly,Vol. 42, No. 22, pp. 2063-2066
Baker, J, Grewal, D and Parasuraman, A (1994): “The influence of Store Environment on

Quality inferences and Store Image”, Journal of the Academy of Marketing Science22 (Fall);
328-339 Chetan Bhagat, Retail Management, OXFORD.
Das. S (2000), Scenes from the Malls, Business India, November, pp 96-98.
Goswami, Paromita (2007), Apparel Shopping Behavior Of Urban Indian Students, ICFAI
Journal of Management Research, Vol. 6 (4).
Goswami Paromita, “Would Indian consumers move from kirana stores to organized retailers
when shopping for groceries?” Asia Pacific Journal of Marketing and Logistics, 21(1) (2009)
127-143. Working Paper No. 222, Indian Council for Research on International Economic
Relations, p. viii

ISSN: 2455-8834
Gupta Himanshu, Dubey Neetu and Patani Pawan (August 2012), Effect of Organized retail on
Unorganized retail in Indian retail market, Research Journal of Management Sciences, Volume
1(1),pp-9.
Joseph, M., Soundararajan, N., Gupta, M., & Sahu, S. (2008) report on "Impact of Organised
Retailing on the Unorganised Sector". Working Paper No. 222,In the Indian Council For
Research On International Economic Relations (ICRIER).
Mathew Joseph, Nirupama Soundararajan, Manisha Gupta, Sanghamitra Sahu, (2008), “Impact
of Organized Retailing on the Unorganized Sector”,
Parasuraman, A. et.al. (1985), A Conceptual Model Of Service Quality And Its Implication for
Future Research, Journal of Marketing, Vol. 49, No. 3
Rasheed Sulaiman V N.J. Kalaivani, Jatinder Handoo, 2010, Organised Retailing of Fresh Fruits
and Vegetables: Is it really Helping Producers, pg 4, CRISP Working Paper 2010-001,
Hyderabad, India
Sharma, Gagandeep, Mahendru, Mandeep, Singh, Sanjeet, (2011),“Impact of Organized Retail

on the Economy of Punjab” , Global Journal of Management And Business Research, Volume
11Issue 2.
Sujana Krishnamurthy, “Impact of Organized Retailing on the Unorganized Sector: A Review of

the study ICRIER”, Labor File, Vol.6, Issue.2, pp.45-48.

Organized Retailing and Its Impact On Traditional Retailing in India: A Case Study of Guwahati City

Uploaded by

Copyright:

Available Formats

Organized Retailing and Its Impact On Traditional Retailing in India: A Case Study of Guwahati City

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Organized Retailing and Its Impact On Traditional Retailing in India: A Case Study of Guwahati City

Uploaded by

Copyright:

Available Formats

International Journal of Social Science and Economic Research

ORGANIZED RETAILING AND ITS IMPACT ON TRADITIONAL

Research Scholar, Gauhati University, India

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4009

PRESENT STATUS OF ORGANIZED RETAIL SECTOR IN INDIA

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4010

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4011

CONSUMER- THE PRIME MOVER:

Parasuraman et al. (1980s) conducted an exploratory investigation in the attempt to define

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4012

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4013

OBJECTIVES OF THE STUDY

 To study impact of organized retail sector on sales of unorganized retailers.

Sampling Plan (Retailers and Customers)

Sampling technique: - Simple random sampling.

Universe: - All the unorganized retailers and customers.

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4014

248 respondents were selected by convenience sampling technique of Probability random

RESULT AND DISCUSSION

1. Evolution of Indian retail

Historic/rural Traditional reach Government support Modern format

2. EVOLUTION OF ORGANIZED RETAIL IN INDIA

Initiation conceptualisation expansion consolidation

9. E commerce has emerged

2. Major Player in Indian Organized Retailing:

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4016

DISTINCTION BETWEEN ORGANIZED RETAILING AND UNORGANIZED

Parameters of Difference Organized Retailing Unorganized Retailing

1.Scale of operation large small

2. Scope of operation Nationwide Highly unorganized

3. Person engaged More than 10 Less than 10

4. Number of stores Chain of stores Maximum 2-3 stand alone

5. shopping experience Excellent or good Poor or fair

6 Employees Skilled, professionally trained Unskilled , untrained and less

7.Business of principle Principle of utility Principle of singularity

8. range of products Wide range of products Relatively narrow range of

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4017

9 Physical ambience pleasurable Lacking graciousness

10 parking facility Adequately available and Inadequate and unmanaged

11 bargaining Not possible Possible to some extent

examples Wall mart, Mc Donald’s mother Counter stores, kiosks, street

3. Indian retail market ( Organized and Unorganized ) percentage share

year Organized (%) Unorganized (%)

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4018

4. Majors factors leading to growth of organized retail sector in India

Dual Income and

MAJOR RETAILERS IN GUWAHATI CITY

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4019

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4020

V2 Family Fashion Store

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4021

BENEFITS FOR THE CONSUMER

Table 5: Sales Turnover in Unorganized Retail Stores before and after

Sl No. Sales Before After

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4022

SL no customers Before After

Sl No profit before after

www.ijsser.org Copyright © IJSSER 2017, All right reserved Page 4023

Table 8: Quantum of sales volume in the last 3 years