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Has Organized Retail Changed the Business Landscape ?

February 21, 2009


The organized / modern retail is beneficial for consumers and farmers and has no impact on overall employment in the organized sector. The only players impacted negatively are the middlemen, who are the biggest opponents of organised retail. However, the benefits to consumers and farmers should help reduce some of the opposition against organised retailers.

According to ICRIER findings,

Unorganised retailers in the vicinity of organised retailers experienced a decline in their volume of business and profit in the initial years after the entry of large organised retailers. However, the adverse impact on sales and profit weakens over time. There was no evidence of a decline in overall employment in the unorganised sector as a result of the entry of organised retailers.

Farmers benefit significantly from the option of direct sales to organised retailers eg. average price realisation for cauliflower farmers selling directly to organised retail is about 25% higher than the proceeds from sales to the regulated government mandi.

Consumers were the biggest beneficiaries have definitely gained from organised retail on multiple counts. Overall consumer spending has increased with the entry of organised retail. While all income groups saved through organised retail purchases, the survey revealed that lower income consumers saved more.

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