The Impact of Malls on Small Retailers

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There is a tremendous scope for India’s retail growth.
— Mukesh Ambani, Chairman, Reliance Industries Limited

Organized corporate retailing is poised to become the business of the decade in India. With 30% of the population under 30 years, consumerism has become the mantra of India’s youth. With that said, India’s retail sector is already transforming the lives of urban Indians. It is only a matter of time to reach the remote corners of the country. Indian retail industry is growing at an alarmingly high growth rate and does not seem to slow down even in this recession. The $350 billion Indian retail industry attracts many global retail chains like Walmart, Tesco and Carrefour.

With some 15 million retail outlets, India has the highest retail density in the world. But only four percent of these outlets are more than 500 sq.ft in size and almost all are family owned shops and establishments. The Indian retail industry though predominantly fragmented through the owner run "Mom and Pop outlets" has been witnessing the emergence of a few medium sized Indian Retail chains, namely Pantaloon Retail, RPG Retail, Shoppers Stop, Westside (Tata Group) and Lifestyle International.

In the last few years, Indians have gone through a dramatic transformation in lifestyle by moving from traditional spending on food, groceries and clothing to lifestyle categories that deliver better quality and taste. Modern retailing satisfies rising demand for such goods and services with many players entering the bandwagon in an attempt to tap greater opportunities.

In a country with virtually no cell phones few years back, we now add about 9 million new cell phone customers every month. This is just a tip of an iceberg for the people’s readiness to try something new if the needs and wants are met with price, value, quality and service. Our huge population once considered a liability has proven to be an asset and fuel for India’s current growth.


Dr.R.K.Srivastava did research on the impact of malls on small Retailers in Delhi and Ahmedabad. –(Journal of Business Retail Management Research, ISSN:1751-8202)The result indicates that 85% of the retailers reported decline in sales however in terms of percentage, it is only 18% of decline in total sales. The Average decline in Ahamedabad was 15% compared to Delhi which was 20%.

According to Sanjay Yadav, Head of Globus Stores, Indore, “Shoppers like to visit new malls, but after an initial visit or two, they go back to stores they’ve been shopping at for years. The basic fact is that only five percent of people actually shop at the malls.” (Hindustan Times, Jul 25, 2009)

IBN Live, Jun 09, 2009 A study on the impact of organized retailing on kirana stores, done for the Commerce and Industry ministry by ICRIER ,a Delhi based economic Research Institute in May 2008,found that though small retailers in the vicinity of large format stores experienced a decline in volume of business and profits initially, the effect could be expected to level out in the long run. The study also found that small retailers were quiet resilient, they responded to competition with improved practices and better technology.

DR.Amit singla &Anil kumar Goyal, analyzed The Retail Industry :’From Myth to Malls’. The analysis concludes that the organized retail has opportunities to grow in India in spite of the kirana stores because these kirana shops will also get benefit of the growing economy. Therefore both the malls and kirana stores can play simultaneously in India so no need to get afraid of malls.( Management Paradise ,.Mar 26,2007)

DR.Anuradha Kalhan , did a small survey on impact of malls on small shops and hawkers in Mumbai.( Economic and Political Weekly,Jun 02,2007 )The result showed that there was a decline in sales of...
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