Tuesday, November 24, 2009

Mom-and-pop stores unfazed by organised retail entry



Even as the controversy over the entry of multi-brand retail continues, the Government on Monday said that the rate of closure of unorganised retail stores due to competition from organised retail is minimal at 1.7 per cent per annum.

In a written reply to the Lok Sabha, Mr Jyotiraditya Scindia, Minister of State for Commerce and Industry, said that a sample survey conducted by the Indian Council of Research on International Economic Relation (ICRIER) has indicated that a majority of mom-and-pop stores are keen to compete and remain in business. The Minister also pointed out that there was no evidence to suggest that overall employment has declined followed by the entry of organised retailers.

“There has been some decline in employment in the north and west regions, which however, also weakened over time,” he said. The study also said that the rate of closure of unorganised retail shops in gross term is about 4.2 per cent.

“Unorganised retailers in the vicinity of their organised counterparts experienced a decline in volume of business and profits in the initial years,” Mr Scindia said.

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