The Hindu Business Line : Is there retail room for all?

It is feared that organised players would procure all the quality produce directly from the farmers, leaving second-grade vegetables and fruits for lower-income groups.

Hyderabad , Nov. 12

Twenty-three-year-old Ananda Kumar inherited his mother's 35-year-old vegetable shop, which does an average turnover of Rs 1,000 a day at Gudimalkapur mandi (market), one of the oldest vegetable markets in the city.

He is aware that Reliance, Subhiksha, FoodWorld and Spencer's have started selling vegetables and that they are selling at a lower price.

"I know how they could sell at a lower price. They directly go to the farmers and buy all of his produce. The farmers do not have to pay for transportation or market fee," he said.

But he is unfazed. "There are people who go to such stores and people who come here (the market)," he said.

"We cater not just to the middle class. People from lower income groups too come to us. I'm not worried," he said.

But Mahesh, who is into home delivery of vegetables, is worried. "As of now, I do not see any abnormal rise in prices in the mandi. But I am told that they are going to open several outlets. That might create a problem for us," he said. While Reliance opened 11 in the pilot stage, Subhiksha opened 30 in the twin cities. They have plans to take the numbers to 40 and 50, respectively, in the next two months.

More to come

"We will come out with another bang (opening a cluster of outlets at one go) next month," a Reliance Retail representative told Business Line.

Mr Madhu, senior CPM leader and Rajya Sabha member, foresees scarcity of quality vegetables and fruits in the general markets as the organised sector gets consolidated.

He told Business Line that these organised players would procure all the quality produce from the farmers, leaving second-grade vegetables and fruits for lower-income groups.

Game plan

"They (the organised players) sell at low rates initially. But once their supplies are streamlined, they will increase prices sharply," he said.

Besides, the organised sector could throw thousands of vegetable vendors out of business, he said. "We are studying the issue," he added.

Mr Lakshminarayana, an official of Rythu Bazaar at Mehdipatnam, said there wouldn't be any effect on sales there.

"Shop owners here too get the produce from farmers directly. While the organised sector picks the produce from big farmers who could supply in bulk, shop owners here purchase from small farmers," he observed.

The real test, he felt, would be in the summer season. "Buying in bulk in season is no big deal. One gets vegetables everywhere. But the real challenge will be the summer season," he said.

More Stories on : Retailing | Andhra Pradesh

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Is there retail room for all?

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