Srinivas Chari, Co-Founder and CMO, Xerago, shares his views on the ever continuing conflict between the traditional Kirana store and the modern supermarket and in the process shares some interesting findings and insights.
The arrival of big retailers has no doubt had an effect on the Kirana Stores – a place where most of the buying used to happen until the early 2000s. In place of 5 Kirana stores that used to co-exist in a typical residential area now there are one or two. Most large retail chains started expanding their networks and several smaller chains entered the markets around 2005. The impact on Kiranas has been a plummeting in the growth rate from double digits to single digit. It has been found that people usually buy unique situation products and low shelf-life products from the local Kirana, while planned grocery and high-value products are typically purchased in supermarkets that offer better bargains and quality assurance. In India, retail has been getting more and more competitive. Department and company-owned stores have been entering into almost every sector of retail, turning the typical manufacturer to wholesaler and wholesaler to retailer. In such cases, where the market is so appealing to big retail players as well as to manufacturers, the Kirana stores have good reason to worry about their position in the market. In order to discuss the basis of survival for supermarkets and Kirana stores, we conducted a study across four major metros to understand people’s take on the Kirana vs supermarket debate that is never ending. The survey focused not only on hard numbers but other important parameters that have become an integral part of a shopping exercise which is the experience factor and the how - customer centric, people perceive both the formats. 45% of the people surveyed believe that Kirana stores carry almost all the products that large format retailers carry and meet their needs. Another 34% of the people believe that Kirana stores almost match the product portfolio carried by supermarkets and hence it can be safely said that a consolidated majority believe that the old Kirana is as good as the modern supermarkets in meeting all their regular buys. Reports published had indicated a 20% growth rate in the organized retail space. This could be attributed to three key factors :
The public perception (Also attested by 59% of the respondents) that supermarkets give a value for money which they realize by means of good offers and discounts that they offer owing to the scale of operations which kirana stores cannot afford.
The public perception (Attested by 62% of respondents) that the quality of service and attention to customer requirements is satisfactory at supermarkets.
Shopping has, in recent times moved from just being an exercise for buying needs to an experience on its own. The perception (Attested by 64% of respondents) that supermarkets offer a better a shopping experience where they get to look at varied brands compare them and make purchase decisions is also a key factor in encouraging this churn. But all is not lost for the Kirana stores. People are of the perception that supermarkets, on several occasions make them overspend. This can be attributed to impulse buying that happens at supermarkets to a much higher extent than a Kirana stores due to the display of products in strategic points and offers and discounts offered. Both the formats are perceived to be similar with regards to the convenience factor – each having its own set of benefits. While supermarkets gives us better offers, choices and experience, the local Kirana stores provide us the luxury of having a home delivery at will, credit owing to long standing relationships that may run into decades, a better understanding of local needs and requirements and faster shopping. None of us can think of running to the supermarket for buying a single product that may eat away enormous time nor can think of bargaining over every small thing at the Kirana store. We do not like waiting in the queue for our billing nor keep a constant watch at a measurement scale and at the local lad, to avoid getting cheated, making measurements at our Kirana store. At the end of the day we can conclude that both kiranas and supermarkets are here to stay. With the unique demands of the Indian market growing by the day and its 1.2 billion customers, both of them can co-exist peacefully by capitalizing on their own unique strengths
Srinivas Chari Co-Founder and CMO Xerago