Malls gain at kiranas' cost

The attendants at kirana stores, normally stretched during the festival season, have been able to catch their breath more frequently this time even as the queues at the payment counters of big retail outlets have become longer.

A dipstick survey of a bunch of small shops in Mumbai shows that the growth in their sales this season has been much less: under 15 per cent compared with 30 per cent in previous years.

"The malls have taken away our customers. They have larger a variety of products which they are able to push through a plethora of schemes and very visible display," said Rajesh Shah, the owner of a kirana store in Andheri.

The kirana stores work on a margin of about 12 per cent. Big retailers, on the other hand, can sacrifice margins in favour of volumes and even sell at a margin of -2 per cent in certain schemes.

This is possible because manufacturers are more willing to cooperate with big shops, which offer the prospect of higher volumes.

The products that have seen the sharpest spike in sales at kirana stores are beverages, mainly soft drinks. However, the off-take of other products has not been very brisk. Big retailers have rolled out special offers on not just food and beverages but also personal care products.

Ironically, another bane for the corner shop is the instrument that is an ally of most traders: the telephone.

As buyers have taken to ordering their requirements on the phone, items that depend on display and first-hand feel have taken a backseat.

The situation is so abysmal that few kirana stores this year are stocking gift packs of sweets or dry fruits.

"Earlier, we used to put attractive stalls for gift packs and other special items for the Diwali season. But we no longer see a demand for such packs at our stores, although they are being sold in big retail shops," said Mahesh, the owner of a shop in Bandra, and added: "The customers do not see the product that we are trying to sell. They only go for the products they see on television."