Govt study finds big retail is at small shops’ expense

Those who support the current policy of letting organized chains unfettered access to retail markets will point to a finding in the survey that shows that the average number of paid people working in the small outlets hasn’t declined significantly across the nearly 1,600 retailers surveyed, though it has fallen after the onset of organized retail. One possible explanation, however, is that there tends to be a lag between declining sales and profits, and the letting go of any paid employees, especially in the small retail environment where workers know both the neighbourhoods and the frequent shoppers, and are relatively cheap in terms of the wages they are paid. Indeed, even though organized retail is in its nascent stage, some 17% of the 800 small retailers surveyed said they had already reduced staff.

The survey also shows that the small retailers are trying to respond to competition. Some 60% of those surveyed in the clusters where branded retail has opened said they had tried to have better display of their products while just more than half of them said that they had added product lines and increased the number of brands they stock.

Despite the relatively flat employment numbers and the retailers saying they are trying to fight back, the overall trend is one of trouble for the smaller retailers. Some 83% among those facing direct competition from branded retail say their sales have either fallen or remained flat, compared with only 60% saying so in areas where organized retail hasn’t yet made inroads. And while 40% of small retailers have increased sales in areas of the four cities where organized retail hasn’t come within a 2-5km radius, just 17% in the more competitive areas say they were able to boost sales.