The retail ruckus3 min read . Updated: 16 Dec 2007, 10:39 PM IST
The retail ruckus
The retail ruckus
Your story, “Shoppers don’t want a stop to big retail", Mint, 13 December, shows what consumers prefer. What any government should be encouraging is a low-cost and efficient retail system, which keeps the consumer’s interest uppermost, and not bother who provides it. The small retailer has his own strengths. Both small and big retail must supplement and complement each other, giving a consumer choice to go to wherever he is best served. Estimates vary, but it is a well-known fact that more than 50% of fruits and vegetables in India are spoiled due to lack of proper storage. It is the consumer who eventually has to pay for such wastage. With fierce competition among big retail chains, only the efficient and cost-effective will survive—be they big or small.
This refers to your stories on how organized retail is eating into the business of small shopkeepers. This is an alarming situation and can get uglier if it is not checked in this initial stage. The term “alarming" is used here, instead of “dangerous", because we still have time to control it.
If big trading houses enter retailing and start to slowly kill small-time traders, all the wealth is bound to accumulate with the already wealthy corporate houses.
The distribution of wealth shall get more unequal, as the rich get richer and the poor poorer.
Another side effect of this process is unemployment, which will occur if small traders are forced out of business. And when this happens, the big players shall start dictating terms to suppliers and customers to maximize profits by increasing the prices of essential commodities as there shall be no competition to their ruthless trading tactics. Large companies should, instead of climbing up the trade and retail ladder, focus on turnkey projects and creating mass employment through industrial growth.
I don’t mean to offend or criticize any section of society and am concerned with the long-term prosperity of India.
Before you publish the survey results about what a thousand consumers said about big retail, let me tell you that I am one tax-paying customer who does not mourn the passing away of small shops and welcome the big, organized retail chains. I have been cheated, bullied and held to ransom by small shops for long.
They never sold at MRP (maximum retail price); in fact, often the MRP was not written on the goods. They never allowed me to return goods, they never accepted responsibility for defective goods.
Big retail gives me a pleasant experience, gives me the right to return goods I do not want and, above all, big retail pays taxes.
Small shops pay no taxes, issue no receipts. In fact, I wonder how many small shops are even registered under the departments of sales tax in various states. Many of them encroach on open and public space and do not pay the fair share of revenue and taxes.
They get away by bribing the authorities.
A prime example is a store right outside Mumbai’s Churchgate station. This shop set up a small “monsoon shelter" years ago, which morphed into a pucca structure and now occupies a large part of open area and pays no property taxes on the area it occupies.
Small shops also sell spurious or counterfeit products and the so-called “grey market" operates via these small shops.
So, if small shops want my sympathy, let them stick to their officially sanctioned areas, pay all their taxes, including value added tax, sales tax and the right property taxes, and then maybe I will buy from them and support their cause against big, organized retail.
Your turn to talk
We thank our readers for some very interesting letters in response to our stories and columns. Do continue to write to us at email@example.com