The UPA Government is contemplating allowing majority FDI in MBR/MPR (Multi Brand Retailing/Multi Product Retailing). This will open the doors for Carrefours and Walmart to enter our market.
This could prove to be the deathknell for the nearly 8 crore small businessmen, and the grocery shop next door.
In Al Khuwair in Muscat, where I live, there are very few neighbourhood grocery shops, mainly because Government do not allow them to employ expatriates, unlike Kuwait. Omanis dont fancy sitting and managing a small shop. But still there were 3 reasonable grocery shops where one can get almost all that is required for day to day living. Their major competitor was Lulu Hyper Market which was about 4 kms away. But with Carrefour opening up in Bousher, and Mars already opened in Al Khuwair, these 3 shops found the going tough, and closed down one after another. One of these has been a landmark in Al Khuwair for nearly 20 odd years. These shops used to give reasonably personalized services, had ample parking space and was very convenient if one had to purchse some milk, vegetables, or tea bags. But these hypermarkets have swallowed them, made them non-competitive and I find it extemely inconvenient to go to a hypermarket to buy things which I might need for a day or two. It is a waste of time and effort as billing takes anything between 10-20 minutes, and one has to walk the length and breadth of a hypermarket in search of things. In addition, there is absolutely no one to guide you, in case you want some advice about a product. These hyper markets use salesmen only at the White Goods section, and every there most of them are uncaring and dont give a damn whether you purchase or not.
The entry of giants into organized retail will, contrary to Government claims of reducing food inflation, lead to a vice like grip by these retailers on our cost of living, apart from throwing many out of their livelihood. It is true that our Farm to Retail logistics is very inefficient, and controlled by greedy middlemen, who ensure neither the consumer nor the producer is benefitted. But the remedy to that is not FDI in Organized Retail, but a strengthening of the Distribution Channel and more effective Rural Marketing. Why can't we find India specific solutions to our problems, rather than importing solutions that dont seem to work at all.
