Modern retail will hit kirana biz: PMEAC

 Once the share of overall modern retail in food reaches about 25-30 per cent, it is bound to affect kirana and small traders, Prime Minister Economic Advisory Council Chairman C Rangarajan has said.

Organised retail out-competes traditional retail on prices, variety and quality and offers greater convenience, he said.

Rangarajan, however, sought to allay apprehensions over the government move to allow FDI in multi-brand retail, saying that kirana stores will survive and can become part of modern retail by organising themselves and getting assimilated into the organised sector.

Rangarajan’s comments come a day after the Centre notified its decision to allow 51 per cent FDI in multi-brand retail despite widespread political opposition. “Once the share of overall modern retail in food reaches about 25 to 30 per cent, it is bound to affect the kirana traders first and then the small and marginal traders,” Rangarajan said at a seminar on ‘Organised Retailing vis-a-vis the Farm Economy of India.

He said small retailers will continue to remain. In fact, the international experience shows that even in advanced countries where there are large scale department stores operating, the ‘mom and pop’ stores have not disappeared. They continue to exist.”

Besides, Rangarajan said kirana stores can be a part of the organised retail. “These kirana stores and street hawkers can also become part of the modern retail change story if they can be assimilated into organised retail, organise themselves under their banner through franchisees, upgrade through infusion of capital, better training,” he added.