Are small retailers ready for the onslaught of large organised retailers? Empirical evidence from India

Abstract

With a significant contribution to India’s GDP and employment, the retail industry is one of the important pillars of the economy. Though the share of organised retail is about 5%–6% but the annual growth rate is between 25%–30% per annum. Rising income levels, shift of people from rural areas to urban localities, increasing consumption levels among rural and urban consumers, entry of big and multinational retailers have led to the growth in organised retail industry. But this changing retail scenario has resulted in a fear of threat to livelihood of small traders and ‘mom and pop’ stores due to corporate entry in retail. The present study was conducted with an objective to analyse the constraints faced by small retailers, and examine the preparedness plans of small retailers in the light of entry of large organised retail outlets. Lack of space, and lack of easy access to finance were found to be important constraints faced by unorganized retail outlets. Small retailers were planning to add more space, and new products to counter the threat posed by organised retail outlets.