Effects of Supermarkets on Rural Unorganized Small Retailers

Abstract

In recent years, supermarket, a self-service shop retailing foods and other household items under one roof, has been playing a dominating role in the retail marketing world. Growing urbanization, increasing women’s participation at workforce, rapid rise of the middle class, etc., have been helping in the establishment and extension of supermarkets to rural areas having good transportation and communication facilities. This trend of supermarkets to rural area adversely affects the rural retailers in terms of number of customers or sale, earnings, savings, investment, standard of living, etc. It is because the rural retailers are unorganized and their competitive strengths are very poor as compared to organized supermarkets. A lot of differences like parking facility, discount facility, exchange offer, etc exist between the organized supermarket and unorganized rural retailers.  It signifies the need to study the impact of the establishment of supermarket upon the rural unorganized small retailers in terms of volume of sales, profit, etc. A number of studies reflect the impact upon rural retailers in case of volume of sales and earnings as well as the reasons for such impact thereof, however, more study regarding the impact of supermarkets upon unorganized rural retailers with reference to parking facility, discount facility and exchange offer is also required. This paper has highlighted the impact of supermarkets on unorganized rural retailers by taking into account the factors like differences of parking facility, discount facility and exchange offer, etc. The study reveals the negative impact of the establishment of supermarkets upon each type of unorganized retailer in case of customers and sales volume though the intensity of effect is different for different types of unorganized retailers. The most adversely affected one is garment seller and the least affected one is the vendors. The government and unorganized retailers need to undertake measures like formation of cooperatives, cartel, modernization of interiors, etc., for their safeguard.