Most people shop at both local grocery shops and supemarkets despite growing inroads of organized retail, says a new survey by industry body Associated Chambers of Commerce and Industry of India, or Assocham.
More options: Buyers at a Subhiksha store in New Delhi.
About 70% of the consumers surveyed said they shopped at both types of shops. While 27% said they now go to local grocers less often, only 3% have stopped patronizing neighbourhood shops altogether.
The survey, part of a study called ‘Indian Retailing — The Way Forward’, interviewed 300 consumers and 150 retailers on changing shopping habits. The study is yet to be released.
Consumers said they looked at convenience and location in choosing where they shopped, followed closely by the value for money they got on products. About 90% said they visited stores at least once a week and preferred stores within 2-3km from their homes.
This, along with the long relationships they have with store owners, made shopping at local grocers convenient, consumers said.
Meanwhile, 90% of the retailers surveyed said foreign direct investment, or FDI, should be allowed in multi-brand retail.
While half of the surveyed retailers said FDI in multi-brand retail should be allowed in phases, 20% favoured allowing international retailers to own majority stakes in their Indian operations and 18% favoured international retailers owning 100% of their Indian businesses.
Many retailers said consumer preferences more than anything else has led growth in the sector. “India is in the growth phase of retail evolution where consumers are demanding modern formats as the market develops, leading to strong growth,” said Assocham president Venugopal Dhoot in his introduction to the report. Organized retail currently forms about 3% of India’s more than $320 billion (Rs12.86 trillion) retail industry, expected to grow at 42% a year until 2011, according to a report by Mumbai-based brokerage Edelweiss Securities Ltd.
Buoyed by this, several global retailers including Wal-Mart Stores Inc. and Carrefour SA plan to enter the market although India does not yet allow foreign investment in multi-brand retail.