Tuesday, April 24, 2007

Mom-and-pop retail Vs Organized retail

Lot of talk lately in the papers about Wade Rathke, strident Wal-Mart critic and protester, who is visiting India at present. While there have not been as many activities planned as was being suggested by the media, regular Wal-Mart opponents are always ready for a good drumming up of support for their pet cause.

The thing is that while some the larger retailers, Wal-Mart or others, are becoming too large for everybody else's good, the small mom-and-pop retailers that people are protesting on behalf of have their own negative qualities. There is no system to their stores, their labor is 99% illegal, they never ever pay taxes, they always charge the MRP, which stands for Maximum Retail Price, while all the organized retail stores, pass on their bulk discount to consumers. And the sad thing is that everyone is too busy "protesting" too really think of what the consumer wants, which is better service, better products, lower prices, ability to shop in better atmospheres, parking space and so on, all of which can only be given by organized retailers like HyperCITY, Spencers, Spinich, Subhiksha, Food Bazaar etc.

The first rule of business is to provide something of value to your customers, and the majority of mom-and-pop retailers have lost out on that. The sole advantage they have at the present is their superb delivery service, which is free and quick and the organized retailers have not been able to follow as yet. But it's only a question of time, till they do.


Anonymous said...

While many people appear to believe WalMart is "too big" the question is why would such scale be problematic? If they were using their size to create higher prices for their consumers, that would be an issue. But they apparently are using their size to create lower prices for their consumers. The complaints about Walmart come from their competitors (who are less efficient) or their suppliers (who are being pushed to lower prices). I don't think either complaint is legitimate. Companies must serve the market. When they fail to serve it as well as their competitors, they no longer fulfill a meaningful need. I could create a grocery chain that pays five times the going rate of employee salaries.

Shalini said...

I agree, Wal-Mart's large size is just an easy target. The crux of the issue is that they are offering a service/product that is better priced than at other places, and as long as they can offer something better than others, consumers will buy from them.