The Hindu Business Line : Metro cushion for small traders?

The retail industry in Hyderabad has taken an interesting turn with Metro Cash & Carry, the German self-service wholesale player, launching its first centre.

Like other players — Reliance, Spencer's, Foodworld and Subhiksha, Metro too gets the produce directly from the farmers and the manufacturers. There, however, is a sharp contrast. Metro does not sell directly to the consumers. It sells to retailers, small businessmen and hoteliers.

The spurt in organised retail stores has sent shivers down the spine of small-time retailers, who are constrained by limited financial resources. Some of them have already been thrown out of business unable to face the stiff competition.

Mr Harsh Bahadur, Managing Director of Metro, told Business Line that Metro is an answer for the worries of the small traders as they face the organised retailing.

"We offer prices lower than what a regular wholesaler can offer. Players such as Reliance sell one-kg bags of their own branded products. We can match such offers. We sell them one-kg and one-litre pouches in packs of 10 or above," he said.

As against the market price of Rs 525 (25 kg), sona masoori rice is priced at Rs 449, inclusive of VAT. Chana daal economy is being sold at Rs 899 (25 kg) as against the market price of Rs 1,250. Prices of vegetables can be comparable to that of Fresh and Subhiksha stores.

Ramesh, who owns a retail store at Gandhinagar here, did find the Metro model a way out. He was wondering how businessmen like him could withstand competition from giants such as Reliance and Subhiksha. "They are big players and are able to offer very low prices, backed by huge investments and the robust supply chain management," he said.

He did notice shift of business, marginally though, to the organised retail outlets in the last few weeks. He has become a Metro member now. He is yet to visit the store but he has already been told about the attractive offers that could let him withstand competition from big players.

He, however, finds a drawback in cash-and-carry model. "When I take stock from local distributors, I need not pay any money upfront. I can delay payments up to one-two months. But they say I have to pay when I buy things at Metro," he said.

Mr Venkat Reddy of Balanagar is upbeat. "The timings are very handy for traders like me. We can plan our purchases for the day and get them from here. At the end of the day, we can take stock of things that are left over. Now I need not lose sleep over the organised retailers. This is as good as I own the entire infrastructure," he said. The store is open from 6 a.m. to 10 p.m.

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