Final Alkhlesh 111111

Topic:
IMPACT OF ORGANIZED RETAIL ON SMALL AND MEDIUM SCALE

UNORGANIZED RETAILERS IN JALANDHAR.
Submitted to Lovely Professional University
MGT 738
Capstone II
Submitted by: Supervisor:
Akhlesh Kumar RR1903A54 Ms. Savita Dhingra
Gulshan Kumar RR1904A01 Lecturer.
Rahul Verma RR1904A04
Rajad Sharma RR1904A07
DEPARTMENT OF MANAGEMENT
LOVELY PROFESSIONAL UNIVERSITY
PHAGWARA
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INDEX
S. No. Chapter Page No.
1 Introduction 3-16
2. Review of literature 17-28
3 Need, Objective, Scope & Methodology 29-31
4 Data analysis and Interpretation 32-54
5 Limitation, Findings, Recommendations & Conclusion 55-57
6 References 58-59
7 Appendix (Questionnaire) 61-69
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EXECUTIVE SUMMARY
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Retailing is emerging as a sunrise industry in India and is presently the largest employer after
agriculture. Despite the global economic recession and a consequent slowdown in the Indian
economy, organized retail continued to make headway although at a slower pace in 2009.
Nonetheless, if the current retail landscape is compared with that of 2004, it has undeniably
become a much larger environment. Retail stalwarts such as Wal-Mart, Tesco and Marks &
Spencer have already made inroads into the Indian retail industry and with multi-billion dollar
investments by major domestic players such as Reliance Retail; the market is expected to go
from strength to strength, as Indian retailing has embarked on a long-term growth trajectory.
The global economic crisis and its impact on India resulted in a slowdown of the Indian economy
in 2009. This caused consumers to tighten their purses, and the availability of financial support
for retail expansion dried up. This put a halt to the unprecedented expansion seen over the review
period. Lower consumer confidence resulting from the recession, as well as job losses, resulted
in fewer visits to retail stores, and consequently sales plummeted for major retailers. With
consumers becoming highly discretionary, spending on non-essential items such as lifestyle
goods was highly impacted, making it one of the worst performing categories and with rising
disposable incomes, expansion of stores and supporting economic factors, India's retail sector is
expected to grow to about $ 900 billion by 2014, according to a report by global consultancy and
research firm PricewaterhouseCoopers.
Credit from banks and other lenders has been difficult to obtain in the current environment, and
retailers have suffered severely as a result. Some retailers are unable to pay rental fees because
all lines of credit have dried up. In such a tough operating environment, retailers under the
umbrella of a diversified holding company with access to internal funds are faring better than
other players. For example, Reliance Retail and Aditya Birla Retail emerged relatively unscathed
compared with smaller players such as Vishal Retail.
INTRODUCTION
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RETAILING is the interface between the producer and the individual consumer buying for
personal consumption. This excludes direct interface between the manufacturer and institutional
buyers such as the government and other bulk customers. A retailer is one who stocks the
producer’s goods and is involve in the act of selling it to the individual consumer, at a margin of
profit. As such, retailing is the last link that connects the individual consumer with the
manufacturing and distribution chain. Some of the key features of retailing include
o Selling directly to customers with out having any intermediaries
o Selling in smaller units / quantities, breaking the bulk
o Present in neighborhood or in the location which is quite convenient to the

customers.
o Very high in numbers
o Recognized by their service levels
o Fitting any size or location
It is assumed that due to the entry of a number of retail outlets in the urban and semi urban areas,
the mindset of the existing customers have undergone drastic changes. Besides it is also reported
that the traditional retailing such an age old Grocery shops have directly faced competition with
the organized retailing sector. In some parts of the country, it is reported that the traditional
retails are resisting the entry of organized shopping malls.
ORGANIZED VS UNORGANIZED RETAIL

In the developed economies, organized retail is in the range of 75-80 percent of total retail,
whereas in developing economies, the unorganized sector dominates the retail business. The
share of organized retail varies widely from just one per cent in Pakistan and 5 per cent in India
to 36 per cent in Brazil and 55 per cent in Malaysia Modern retail formats, such as hypermarkets,
superstores, supermarkets, discount and convenience stores are widely present in the developed
world, whereas such forms of retail outlets have only just begun to spread to developing
countries in recent years. In developing countries, the retailing business continues to be
dominated by family-run neighborhood shops and open markets. As a consequence, wholesalers
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and distributors who carry products from industrial suppliers and agricultural producers to the
independent family owned shops and open markets remain a critical part of the supply chain in
these countries.
Country Sales (US$ bn) Share of Organized Retail

(%)
USA 3183 85
Japan 1282 66
China 885 20
United Kingdom 575 80
France 536 80
Germany 521 80
India 410 5
Source: Planet Retail and Technopak Advisers Pvt. Ltd
RECENT TRENDS
Retailing in India is witnessing a huge revamping exercise.
• India is rated the fifth most attractive emerging retail market; a potential goldmine.
• Estimated to be US$ 900 billion by 2014
• As per a report by KPMG the annual growth of department stores is estimated at 24%
• Ranked second in a Global Retail Development Index of 30 developing countries drawn

up by AT Kearney.
GROWTH FACTOR
India’s economy is booming, due to so many reforms: -
• The rise in the working population which is young and reduction of the unemployment
rate
• Pay packets which are hefty and having a huge package of salary package.
• More nuclear families in urban areas
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• More disposable income and customer aspiration
• Western influenced life style is adopted by all the people.
• Growth in expenditure for luxury items increases.
REASON FOR THE GROWTH
• Existing Indian middle classes with an increased purchasing power
• Rise of upcoming business sectors like the IT and engineering firms
• Change in the taste and attitude of the Indians
• Effect of globalization
• Heavy influx of FDI in the retail sectors in India
PRESENT SCENARIO
• Unorganized market: Rs. 583,000 crores

• Organized market: Rs.5, 000 crores
• Over 4,000 new modern Outlets in the last 3 years
• Over 5,000,000 sq. ft. of mall space under development
• The top 3 modern retailers control over 750,000 sq. ft. of retail space
• Over 400,000 shoppers walk through their doors every week
The reasons might be-
1. In smaller towns and urban areas, there are many families who are traditionally using these
kirana shops/ 'mom and pop' stores offering a wide range of merchandise mix. Generally these
kirana shops are the family business of these small retailers which they are running for more than
one generation.
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2. These kiran shops are having their own efficient management system and with this they are
efficiently fulfilling the needs of the customer. This is one of the good reasons why the customer
doesn’t want to change their old loyal kirana shop.
3. A large number of working class in India is working as daily wage basis, at the end of the day
when they get their wage, they come to this small retail shop to purchase wheat flour, rice etc for
their supper. For them this the only place to have those food items because purchase quantity is
so small that no big retail store would entertain this.
4. Similarly there is another consumer class who are the seasonal worker. During their
unemployment period they use to purchase from this kirana store in credit and when they get
their salary they clear their dues. Now this type of credit facility is not available in corporate
retail store, so this kirana stores are the only place for them to fulfill their needs.
5. This unorganized stores are having n number of options to cut their costs. They incur little to
no real-estate costs because they generally operate from their residences.
Their labour cost is also low because the family members work in the store. Also they use cheap
child labour at very low rates. As they are operating from their home so they can pay for their
utilities at residential rates.
The present value of the Indian retail market is estimated by the India Retail Report to be around
Rs. 12, 00,000 crore ($270 billion) and the annual growth rate is 5.7 percent. Retail market for
food and grocery with a worth of Rs. 7, 43,900 crore is the largest of the different types of retail
industries present in India. Furthermore around 15 million retail outlets help India win the crown
of having the highest retail outlet density in the world. The contribution of retail sector to GDP
has been manifested below:
Country Retail Sector's share in GDP (in %)
India 10
USA 10
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China 8
Brazil 6
Source:CII-AT Kearney Retail Study
As can be clearly seen, retailing in India is superior to those of its contenders. Retail sector is a
sunrise industry in India and the prospect for growth is simply huge. There are many factors that
have stimulated the rise of the shopping centers and multiplex-malls in a jiffy. Some of them can
be listed as follows:
INDIAN RETAIL: PAST Vs PRESENT
It is widely accepted that the retail industry has undergone a drastic change in last five years and
there is yet more to come. Let us compare the image of Indian retailing in 2006-07 to that of its
status in 2009-10 in the following table: Magnification of the Indian Retail Industry
Yardstick Situation in 06-07 Situation in 09-10
Value of retail sales Rs. 10,20,000 crore Rs 14,00,000 crore
Annual growth rate 5% 7.7%
Value of organized market Rs 35,000 crore Rs 56,000 crore
Share of organized market in the sector 3.4% 5%
Forecasts about growth rate of organized retail market Around 30% Around 35%
The above table clearly shows that the retail market as well as the mindset required for it has
experienced a thorough revisal in the last three years. This is just the beginning and Indians are
sanguine that the sector will see rosy days in the future. This confidence has helped India acquire
the No.1 position among 30 most attractive retailing destinations in the world according to the
Global Retail Development Index of 2009 (by AT Kearney, India). Among emerging markets,
India holds the second position after China in the list of most favored retail destinations. The
retail industry employs a huge share of the total workforce in India. It is the second largest
employer after India. Presently 7 percent of the total labor force is employed in the retail sector.
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According to available data it is also the largest employer in the services sector and maximum
growth in the non-agricultural sector has been witnessed by retail trade. According to market
analysts 300 new malls, 1,500 supermarkets and 325 departmental stores are going to come up in
India in the next few days. The shopping revolution that has led to this retail boom is going to
continue and this is good news for the government as well as those who wish to work in the
organized sector.
RURAL RETAILING
India's huge rural market has also attracted retail investments and is seen as a viable opportunity
for growth by corporate India.ITC launched the countries first rural mall "Chaupal Sagar" with
diverse products being offered ranging from FMCG to electronics appliance to automobiles, with
a view to provide farmers a one stop center for all their consumption requirements. Many more
new trends could possibly be tried in rural markets to unearth the huge potential.
CHALLENGES FACED BY INDUSTRY
• The tax structure in India favors small retail business

• Lack of adequate infrastructure facilities
• High cost of real estate
• Dissimilarity in consumer groups
• Restrictions in Foreign Direct Investment
• Shortage of retail study options
• Shortage of trained manpower
• Low retail management skill
THE FUTURE
India's retail sector is expected to grow to about $ 900 billion by 2014, according to a report by
global consultancy and research firm PricewaterhouseCoopers. It is further expected that the
retail sales in India would grow at an average of four per cent between 2010 and 2014 and will
reach US$ 1.3 trillion by the year 2018 at a CAGR of 10%. As the country has got a high growth
rates, the consumer spending has also gone up and is also expected to go up further in the future.
In the last four year, the consumer spending in India climbed up to 75%. As a result, the India
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retail industry is expected to grow further in the future days. By the year 2013, the organized
sector is also expected to grow at a CAGR of 40%.
TECHNOLOGY IN RETAIL:
The ERP Initiative
Over the years, during the turn of twentieth century as the consumer demand increased and the
retailers geared up to meet this increase world over, technology evolved rapidly to support this
growth. The hardware and software tools that have now become almost essential for retailing can
be classified into 3 broad categories:
Customer Interfacing Systems
• Bar Coding and Scanners: Point of Sale (POS) systems use scanners and bar coding to
identify an item, use pre-stored data to calculate the cost and generate the total bill for a
client.
• Payment: Payment through credit cards has become quite widespread and this enables a
fast and easy payment process. Electronic cheque conversion, a recent development in
this area, processes a cheque electronically by transmitting transaction information to the
retailer and consumer's bank.
• Internet: Internet is also rapidly evolving as a customer interface, removing the need of a
customer physically visiting the store.
Operation Support Systems
• ERP System: Various Enterprise Resource Planning (ERP) vendors have developed
retail-specific systems which help in integrating all the functions from warehousing to
distribution, front and back office store systems and merchandising. An integrated supply
chain helps the retailer in maintaining his stocks, getting his supplies on time, preventing
stock-outs and thus reducing his costs, while servicing the customer better.
• CRM Systems: The rise of loyalty programs, mail order and the Internet has provided
retailers with real access to consumer data. Data warehousing and mining technologies
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offers retailers the tools they need to make sense of their consumer data and apply it to
business.
• Advanced Planning and Scheduling Systems: APS systems can provide improved
control across the supply chain, all the way from raw material suppliers, right through to
the retail shelf. They enable consolidation of activities such as long term budgeting,
monthly forecasting, weekly factory scheduling and daily distribution scheduling into one
overall planning process using a single set of data.
Strategic Decision Support Systems
• Store Site Location: Demographics and buying patterns of residents of an area can be
used to compare various possible sites for opening new stores. Today, software packages
are helping retailers not only in their locational decisions but in decisions regarding store
sizing and floor-spaces as well.
• Visual Merchandising: The decision on how to place and stack items in a store is no
more taken on the gut feel of the store manager. A larger number of visual merchandising
tools are available to him to evaluate the impact of his stacking options.
TYPES OF RETAIL
The retail industry is divided into organized and unorganized sectors. Organized retailing refers
to trading activities undertaken by licensed retailers, that is, those who are registered for sales
tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also
the privately owned large retail businesses.
Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing,
for example, the local kirana shops, owner manned general stores, paan/beedi shops,
convenience stores hand cart and pavement vendors, etc.
Retailing Formats in India
Malls: The largest form of organized retailing today. Located mainly in metros cities, in
proximity to urban outskirts. Ranges from 60,000 sq ft to 7, 00,000 sq ft and above. They lend
an ideal shopping experience with an amalgamation of product, service and entertainment, all
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under a common roof. Examples include Shoppers Stop, Vishal Mega Mart, India Bulls, and
Pantaloon.
Specialty Store: Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer
Crossword, RPG’s Music World and the Times Group’s music chain Planet M, are focusing on
specific market segments and have established themselves strongly in their sectors.
Discount Stores : As the name suggest, discount stores or factory outlets, offer discounts on the
MRP through selling in bulk reaching economies of scale or excess stock left over at the season.
The product category can range from a variety of perishable/ non perishable good
Department Stores: Large stores ranging from 20000-50000 sq. ft, catering to a variety of
consumer needs. Further classified into localized departments such as clothing, toys, home,
groceries, etc.
Hyper Markets / Super Markets: Large self service outlets, catering to varied shopper needs
are termed as Supermarkets. These are located in or near residential high streets. These stores
today contribute to 30% of all food & grocery organized retail sales.
Convenience Stores: These are relatively small stores 400-2000 sq. feet located near residential
areas. They stock a limited range of high-turnover convenience products and are usually open for
extended periods during the day, seven days a week. Prices are slightly higher due to the
convenience premium.
MBO’s: Multi Brand Outlets, also known as Category Killers, offer several brands across a
single product category. These usually do well in busy market places and Metros.
MAJOR PLAYERS
BIG Bazaar
Big bazaar is owned and operated by Future Bazaar India Ltd., a subsidiary of Pantaloon Retail
Limited. As part of India’s largest retail chain, it enjoys the benefits of buying in bulk for the
entire group and keeps the margins low, so that customers get a great range of products at great
prices. Pantaloon Retail Limited led by Kishore Biyani is the country’s largest retailer. It owns
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and operated multiple retail formats including Pantaloons, Big Bazaar, Food Bazaar, Central, E-
Zone, Fashion Station, Depot and many others.
Pantaloon Retail was selected as the Best of Best Retailers in Asia by Retail Asia-Pacific Top
500 magazine in 2006. Big Bazaar was awarded the CNBC-Awaaz Consumer Awards in 2006
and the Readers’ Digest Platinum Brand Award 2006.
VISHAL MEGA MART
Vishal Mega Mart is India’s first hyper market which is having 126 showrooms in 83 cities/20
states. Vishal is one of the fastest growing retailing groups in India. Its outlets cater to almost all
price ranges. The showrooms have over 70, 000 products range which fulfills all your household
needs, and can be catered under one roof.
EBONY
Ebony launched its store in 1994 at South Extension, New Delhi. Its main goal is to give world-
class shopping experience to the Indian consumer. It has successfully opened seven stores across
seven cities in India.
Ebony Retail Holdings Ltd has initiated several industry trends, making a distinguished place for
itself in the industry. The most prominent a successful Ebony in-house bran are ETC and a
special books and music venture called Wordsworth. Ebony has opened its stores in Chandigarh,
Noida, Ludhiana, Jalandhar, Amritsar and Faridabad apart from New Delhi.
Lifestyle International
Lifestyle is an international fashion store of the Landmark Group, a Dubai-based company.

Lifestyle created a revolution in the Indian Retail Industry by bringing a truly international
shopping experience. It was launched in Chennai, and now it is one of the largest professional
retailers spread across 3, 25,000 sq. ft. in various cities such as Chennai, Gurgaon, Mumbai,
Hyderabad and Bangalore.
It is a heaven for shoppers with a vibrant and spicy lifestyle. It provides a wide choice of
products at affordable prices with a convenient world-class environment and a friendly layout.
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Being one of the best shopping destinations, it has won the ''Most Respected Company in the
Indian Retail Sector' and the 'Most Admired Large Format Retail Company' awards in India.
PIRAMAL
Piramal Enterprises made its foray into the retail industry in 1999. It entered the market with a
lifestyle department store called Piramyd Megastore, a shopping mall called Crossroads and a
family entertainment center called Jammin.
The current annual turnover of the organization stands at $20 million. The company has over 50
retail outlets across the country, first of them launched in North India. The CEO of the company
is Mr. Ajay Piramal.
The flagship company of Piramals is Nicholas Piramal. The organization owns a shopping mall
in Mumbai known as Crossroads. The mall is spread over 1, 50,000 square feet in four buildings
across the city. The stores will also be located in Ludhiana, Delhi, Pune and Ahmedabad.
RPG RETAIL
The history of RPG Enterprises goes back to the 19th century. In 1979 Mr. RP Goenka took the
initiative to set up RPG Enterprises. Presently it has a turnover of US$ 1.65 billion (Rs. 7472
crore) and assets worth US$ 1.8 billion.
Among the fastest growing groups in India, it is operating successfully through more than 20
companies in 7 business sectors, namely Retail, IT & Communications, Power, Transmission,
Entertainment, Life sciences and Tyres.
WEST SIDE
Tata Group founded Trent Ltd. (Westside) in 1998. The acquisition of a London-based retail
chain Littlewoods by the Tatas was followed by the establishment of Trent Ltd, which was later
renamed as Westside.
It is one of the largest and fastest growing chains serving the customers in various categories,
including men's wear, women's wear, kid's wear, footwear, cosmetics, perfumes and handbags,
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household accessories, lingerie and gifts. The company offers products with a balance between
style and price. There are 25 Westside departmental stores operating in various cities like
Mumbai, Hyderabad, Pune, Delhi, Bangalore, Noida, Gurgaon, Nagpur, Kolkata and many
others.
WILLS LIFE STYLE
ITC has made a presence in the Retail sector through its exclusive specialty store - 'Wills
Lifestyle'. It has developed itself as a fashion destination offering a range of apparels and
accessories. Top designers of the industry design these clothes. The store offers Wills Classic
work wear, Wills Sport relaxed wear, fashion accessories and bath & body care products. Wills
Lifestyle has also developed John Players as a brand that offers a fine collection of clothes for
dynamic and vibrant people. ITC believes in the philosophy of enjoying the changing
environment. This season Wills Lifestyle has brought a complete array of products for very
aspect and mood of life be it work, relaxation or party. The store offers a truly 'International
Shopping Experience' through world-class environment and a robust portfolio of offerings
Super brands Council of India awarded the title of Super brand 2006 to Wills Lifestyle. It is the
title partner of the premier fashion event - Wills Lifestyle India Fashion Week. Leading
designers such as Rahul Khanna, Manish Malhotra and Monisha Jaising have been promoting the
brand. Wills Sport was designated as the 'The Most Admired Brand Launch of the Year' at the
Images Fashion Awards 2001. ITC entered the youth fashion market with the brand known as
John Players in December 2002. John Players is available across the country in over 125
exclusive stores and over 1500 multi-brand outlets; also declared as 'The Most Admired Shirt
Brand of the Year' at the Images Fashion Awards 2005.
CROSSWORD
Crossword, the largest bookseller in India, came into existence on 15th October 1992. Crossword
Bookstores Ltd. is a subsidiary of Shopper's Stop Ltd. It is widely known in various countries for
its achievements. It featured in Advertising Age International, USA, as one of the Marketing
Superstars for 1994. It has established itself as a lifestyle bookstore, with bright interiors and
enough space for movement, suitable for all kinds of people. The simple and intelligent
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modifications in the store such as electronic POS, proper classification, a dedicated helpdesk,
inventory control systems and smart displays have won the hearts of the people visiting the store.
GLOBUS
Globus was launched in 1998 as a part of the Rajan Raheja Group. The company opened its first
outlet in Indore followed by two more in Chennai. The flagship store was opened on 1st
November 2001 in Mumbai, followed by a vibrant store in New Delhi. Subsequently, its stores
were launched in Bangalore, Ghaziabad, Kanpur, Ahmedabad, Noida, Lucknow, Varanasi and
Hyderabad.
The organization has an innovative and adaptive environment. Globus has achieved customer
delight by presenting value products and services through continuous improvement. It has a team
of dedicated and passionate employees maintained by constant training.
RELIANCE
Reliance is one of the biggest players in Indian retail industry. More than 300 Reliance Fresh
stores and Reliance Mart are quite popular in the Indian retail market. It's expecting its sales to
reach Rs. 90,000 crores by 2010.
AV BIRLA GROUP
AV Birla Group has a strong presence in Indian apparel retailing. The brands like Louis Phillipe,
Allen Solly, Van Heusen, and Peter England are quite popular. It's also investing in other
segments of retail. It will invest Rs. 8000-9000 crores by 2010.
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LITERATURE REVIEW
LITERATURE REVIEW
Miller and Besser (2000) has conducted research in order to identify factors that influence
small-town consumers’ satisfaction with local independent retailers and the subsequent
relationships of consumer satisfaction to in-shopping, community attachment, and support of
local independent retailers. Oliver’s expectancy-disconfirmation model (1980) was used as the
framework to predict consumer satisfaction. Their business strategies were being examined to
meet the changing expectations of their local consumers. It is essential that independent retailers
know their local customers and exploit niche strategies that big-box retailers do not provide.”
The authors conducted the research and found out what are the factor that influences small town
consumers and their satisfaction level when they deal with retailers from unorganized sector.
How retailers from unorganized sector believe in making the relations with their customers so
that they keep on doing purchase from them only in coming tike period.
WHY:- The authors conducted the research and found out what are the factor that influences
small town consumers and their satisfaction level when they deal with retailers from unorganized
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sector. How retailers from unorganized sector believe in making the relations with their
customers so that they keep on doing purchase from them only in coming tike period.
Source: Miller, N.J. and Besser, T.L. (2000), “The importance of community values in small
business strategy formation: evidence from rural Iowa”, Journal of Small Business
Management, Vol. 38 No. 1, pp. 68-85.
Sen (2000) studied that in India; some empirical studies provide important information about
consumer behavior and its responses to the development of organized retail. Economical and
social changes are major contributors for a growing fragmentation of consumers into multiple
segments with different values and buying priorities. Consumers have become more pragmatic,
educated and demanding, learning how to manage money and time more efficiently. The focus
on low prices was gradually replaced by a value for money perspective. He confirms this in the
study undertaken in Indian context. He confirms that in the case of hypermarkets, the main
motives for preferences, in decreasing order are low prices, the possibility of buying everything
in the same place and the general appearance of the store.
WHY:- The above study states that people in India have now shifted their focus from low price
of products to value for money, they are more concerned about getting value of their hard earned
money rather than sticking on low prices. Although price of product still play a very formidable
part during the purchase of product but if people feel that they are getting more value for their
money then they will go for the purchase of product or service even on higher prices. This study
will help to know what are the recent trend of people buying behavior as the study has already
revealed a very important aspect that there is a shift of people buying behavior in India from low
prices to value for money this will help in drawing recommendations in the study.
Arons (2001) has conducted a means and chain analysis of the food sector and explore the extent
to which these findings made can be used to inform the retail positioning strategies of food
retailer. Consumer research is un-doubtfully one of the key elements in informing the retail
strategy and the key facilitation in the race of the competitive advantage. The paper shows that
the food retail positioning strategies should be focused on emphasising the fact that the retail
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offer act as a vehicle for the attainment of the personally relevant and status of existence for the
consumers
WHY:-
Anand (2003) found that before 20th century there are not so much supermarkets in our country
but after 20th century the need of the same came into existence but there is a direct competition of
these from hawkers or kirana holders because they have already created their goodwill in the
market but the retail sector make this position in the market and run their business successfully
after that organized retailing spread their presence felt in different parts of the country in the year
2000 approx. 400,000 crores retail markets are un-organized there is a large trend of super
market in the Indian market. They also have to face competition from them so as to reduce this,
they adopted a method to provide the customers discounts and better home delivery facility and
create goodwill & he can also try to remove the hawkers from the roadside to increase their sale
& saw.
WHY:- The above research will help us to know how the market has changed over the years
and what small retail stores are doing to respond to the competition offered by the organized
sector is being discussed here. This will help us to give recommendations to the small retailers
that whether whatever they are doing in order to increase their sale is sufficient or they need to
do more and what are the effects of their strategies against big organized retailers.
Source: Anand (2003) “using assessments of sandwich year and academic work performance on
business studies degree course.” Management research news. Vol.-13, no.-2, PP- 9 to 99.
Radhakrishnan (2003) studied that the traditional Retailers Perceptions about Organized retail.
Organized retail has deeply changed the Indian commercial structure. However, it is not
exclusively responsible, as other changes (economical, social and cultural ones) have occurred
simultaneously. Concerning the more direct effects of organized retail on different types of
commerce, it is possible to verify that the major impact is felt on traditional retail and, in
particular, on the food sector. The impact of organized retail is also significant on other types of
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retail, namely toys, stationery goods and household appliances; moreover, it is probable that
competition gets more intense in other sectors, such as clothing and furniture.
Why:- The above research helped us to know what are the other factors that has actually helped
the organized retail sector to grow up to such a large extent and in changing the buying behavior
of the customer. This research will help us to know what where the retailers have to concentrate
while deciding about the promotional and advertisement strategies.
Griffin, J (2004) has studied to determine the benefits offered to customers and activities taken
by retailers whether or not they have formal customer loyalty programmes, whether there are
differences in benefits/activities of retailers with or without formal loyalty programs. A shift in
focus from finding customer to keeping customers are adopted by broad spectrum of retailers,
The benefits of participating retailers are demonstrated having customer interest heart,
identifying customer’s preferences and recording them to guide further action. In addition model
was developed that was used to predict the retailers with or without formal loyalty programs.
WHY:- The above study reveals that the trend of making more customers have been replaced
by retaining the old customers by the organized retailers. This study will help us in
recommending the un-organized retailers what they need to focus on. Whether to go for new
customers or retain the old ones.
Source: Griffin J. (2004), “Frequently asked questions about consumer loyalty”. Available at
www.loyaltysolutions.com.
Klein and Dawar (2004), has studied to find out which retail business practices lead to
perception of CSIR from customer’s perspective and to develop a measurement scale for this
construct. The analysis was conducted using quantitative data from paper based and online
survey, a high order, multi-group confirmatory factor analysis. It was found that there were
factors i.e. natural environment, local business, foreign economies, local employment, societal
rules, employee benefits, employee wages, local working conditions, employee discrimination,
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foreign labour, sales practices, dishonesty, offensive materials and pricing policies which
represent perception of CSIR in retailing.
WHY:- This paper will help us in knowing what are the factors that actually are the perception
of CSIR from customer point of view in retailing this will help us to know what actually the
customers think about the retail business whether it is organized or unorganized.
Source: Klein, J and Dawar, N (2004), “consumer social responsibility and consumer’s
attributions and brand evaluations in product harm crisis” International journal of research in
marketing, Vol. 21 No.-3, PP-203-17.
Indian Council for Research on International Economic Relations (2007) has conducted a
research and found that there will be no negative impact on employment. At the same time, there
will be a positive effect on farmers' earnings. Also, any adverse impact on small shops will wear
off over a period of time. The study has also found that the presence of organized retailers will
firm up the supply chain deficiencies, which has been bothering the sector.
WHY:- The above research states that there will be no negative impact on employment because
of the introduction of organized retail but this has been found in various studies that definitely
there will be a positive impact on unemployment. This research is a bit of unexpected one and
thus could prove to be a crucial one in giving new directions to the findings and
recommendations in the research.
Shivakumar (2007) written that organized retail has not penetrated and will not penetrate rural
India for obvious reasons – it is just unviable. It is only the urban areas that organized retail is
slowly but not steadily growing in.
WHY:- This study states that the organized retail is and will not penetrate into the rural market.
Since India’s rural market is having huge potential so organized sector need to penetrate into this
market otherwise they will lose their potential market to their unorganized counterparts. This
22 | P a g e
study helps in knowing where will the organized sector face difficulties in establishing
themselves and where the un-organized retailers can take advantage over the organized retailers.
Joseph and Gupta (2008) studied that the Indian retail sector is booming and modernizing
rapidly in line with India’s economic growth. In this review the author talked about the impact of
organized retailing on traditional retailing. With the increase in number of various formats for
shopping like malls, departmental stores, hypermarkets etc the Indian consumer’s preferences are
changing towards and that’s the reason foreign investors like the king of retail Wal-Mart also
came into the Indian retail ground in collaboration with Bharti. There is a huge untapped market
is present in India right now which contains a number of opportunities for retailers.
WHY:- The above study reveals that there is a huge untapped market of retail in the rural as well
as in urban area. However there are huge number of un-organized retail kirana store in the rural
areas as well as in urban areas but because of the organized retail their survival is in danger.
This study clearly reveals what are effects of introduction of organized retail on un-organized
retail stores.
Joseph et al. (2008) studied how consumers and farmers benefit from organized retailers. The
study has also examined the impact on intermediaries and manufacturers. The results are
indicative of the mega-and-mini- metro cities around a limited number of organized retail outlets.
Based on the results of the surveys, the study has made a number of specific policy
recommendations for regulating the interaction of large retailers with small suppliers and for
strengthening the competitive response of the unorganized retailers.
WHY:- The above study reveals what are the advantages of the organized retail sector to the
farmers and cosumers. This study will help us to know what were the side effects of un-
organized retail sector and what are the benefits of organized retail. It also will help in knowing
that whether we should give boost to organized retail sector or should stick with un-organized
retail stores.
Kacker (2008) written that it is quite possible for both the organized and unorganized sector
retailers to co-exist and flourish. He said that India has a huge potential for growth in retailing
23 | P a g e
sector. It is picking up at a reasonable pace. The organized and unorganized retail sectors will go
from strength to strength together. Whatever problems the unorganized sector retailers are facing
today need to be articulated and should be addressed. The government will be more than happy
to work with trade bodies to ensure that dynamism in the unorganized sector remains intact
WHY:- The above study has been included to know whether both organized and un-organized
retail sector can co-exist or not. The study states that yes both of them can co-exist, so this will
change the direction of recommendations to un-organized retail sector for their survival in the
market.
Krishnamoorthy (2008) studied that developing economies, specifically India, are appearing on
the world retail industry radar due to the size and potential of their markets. As organized retail
presents enormous business opportunities, big names such as Reliance, Birlas and Tatas along
with the foreign supermarket chains (in partnership with Indian companies), have been making
an entry into this sector. Fearing loss of business and employment, traders and hawkers have held
large-scale protests in various parts of the country. In the light of this, the Ministry of Commerce
and Industry commissioned the Indian Council for Research on International Economic Relations
(ICRIER) the to analyze impact of organized retailing on unorganized retail, farmers and
intermediaries as a possible input to future policy-making.
WHY:- The above research has been included to analyze impact of organized retailing on
unorganized retail, farmers and intermediaries as a possible input to future recommendations to
both organized as well as un-organized retailers.
Nath (2008) written that the Government has instituted a study through Indian Council for
Research on International Economic Relations to assess the impact of organized retailing on
unorganized retail trade. The government has also commissioned a study to the Nation Council
of Applied Economic Research on growth linkages of Foreign Direct Investment (FDI) in India.
The study will also focus on the impact of FDI on the rural economy. The government has
24 | P a g e
received a number of representations against permitting FDI in retail trade from various industry
associations, including small scale industry and retail traders.
WHY:- This study will help us in giving the recommendation whether more and more FDI
should be allowed in the organized retail or not and what will be its effect on the un-oganised
retailers.
Goswami and Mishra (2009) found that customer patronage to grocery stores was found to be
positively related to location, helpful, trustworthy salespeople, home shopping, cleanliness,
offers, quality and negatively related to travel convenience. Kiranas do well on location but
poorly on cleanliness, offers, quality, and helpful trustworthy salespeople. The converse is true
for organized retailers and also found that Kiranas have major disadvantages on all customer
perception scores except location. These scores being less important determinants of patronage
compared with location, in the short run kiranas may not be ousted out of customers’ favour.
However, in the long run if they do not work on these other factors, they would face oblivion.
WHY:- The above study has been included so as to recommend un-organized retilers what small
things customers take into consideration while deciding to go shopping in retail stores. These
things play a very important role in deciding whether one should go for shopping from that store
or not.
Kumar, Babu and Sucharitha (2009) studied that the retailing concept is classified as
Organized Retailing, Unorganized Retailing. We can find organized retailing mostly in
Developed countries like in US, UK etc. Emergence of retailing has been linked with the
civilizations and their culture. Whereas, unorganized Retailing is confined mostly to the under
developed and developing countries. Indian retailing and Chinese retailing may be taken as the
examples for unorganized retailing. After liberalization of Indian Economy in 1990.s the
employment and income from the service sector has lead to the burgeoning of the so-called
.Middle Class Consumers. The lifestyle and purchasing power of this segment has fueled the
growth of organized retailing (CII National Retail Summit, 2006). The Organized retailing in
25 | P a g e
India initially began with the availability of land at prime locations coupled with lower real estate
prices enabled the construction of multi-storied shopping complexes and the growing purchasing
power of the middle class consumers (Retail Symposium, 2008). Organized retailing is spreading
and making its presence felt in different parts of the country. The trend in grocery retailing,
however, has been slightly different with a growth concentration. However, it was considered a
traditional, conservative and cost-conscious market, proved to be the home ground for most of
the successful retail names.
WHY:- How the organized retailing is spreading and making its presence felt in different parts
of the country. The trend in grocery retailing, however, has been slightly different with a growth
concentration. However, it was considered a traditional, conservative and cost-conscious market,
proved to be the home ground for most of the successful retail names. This study helped in
knowing what factors are responsible for the spreading of organized retail in India.
Sadasivan and Premkumar (2009) studied that organized retail segment has been growing at a
blistering pace, exceeding all previous estimates. According to a study by Deloitte Haskins and
Sells, organized retail has increased its share from 5 percent of total retail sales in 2006 to 8 per
cent in 2007. The fastest growing segments have been the wholesale cash and carry stores (150
per cent) followed by supermarkets (100 per cent) and hypermarkets (75-80 per cent). Further, it
estimates the organized segment to account for 25 per cent of the total sales by 2011. India tops
the AT Kearney’s annual Global Retail Development Index (GRDI) for the third consecutive
year. The Indian retail market, which is the fifth largest retail destination globally, according to
industry estimates is estimated to grow from the US$ 330 billion in 2007 to US$ 427 billion by
2010 and US$ 637 billion by 2015.
WHY:- This study helped in knowing the growth movement of the organized retail in India. This
shows that India now is one of the favourite destination of organized retailers across the world
and is a waking call for un-organized retailers.
26 | P a g e
Sharma (2009) said that there would be no negative impact of organized retailing on the
unorganized sector, which accounts for 96 per cent of retail business. Moreover, 3.5 crores
people have got jobs in the retail sector and the incomes too have increased in recent times. He
added the study reveals that unorganized retail sector is expected to grow at about 10 per cent per
annum with sales rising from $309 billion in 2006-07 to $496 billion in 2011-12. He also added
that there is no restriction on the entry of domestic investors into retail sector.
WHY:- This study has been included in the research in order to know that whether the organized
retail will have effect on un-organized retailers or not. This study focuses on the positive side of
the introduction of organized retail sector in India.
Shukla (2009) studied that the marketing function depends heavily on the presence of
intermediaries between the Producer and consumer. These intermediaries provide broad and
convenient access to products for a wide range of customers. The retailing function adds value
for producers and consumers in a number of ways, most of which are difficult for manufacturers
to replace.
WHY:- This study has been included as it reveals which type of assortment of products is done
in organized retail stores so that customers can achieve one-stop shopping, creating an inventory
buffer between production and consumption so that products are available when desired, and
providing support services such as display, demonstration, credit, delivery, assembly, repair, and
return and warranty services. This will help in recommending the un-organized retailers to what
tactics they can apply while selling their products.
Wadekar (2009) studied that with huge malls and skyscrapers coming all over the country and
with cry for customer delight and satisfaction getting shriller, it was expected that organized
marketing would make a buyers paradise. Right from selling vegetables to banking services,
27 | P a g e
marketing is believed to be getting organized to gain customer loyalty and enriched customer
experience. Indian consumers had never dreamt it before, everything available under a roof, with
facilities for children care and a café to relax with crunchy snacks and a central air conditioning
keeping them cool and a low music adding up in their high, it was a sheer luxurious purchasing
experience. The researcher conducted a survey in different malls, in the city of Pune to verify the
claims of the malls of serving ultimate quality at a reasonable price rather a price lower than the
ruling market price. The findings of the survey however are quite different from the
presumptions. The survey poignantly shows the sophisticatedly manipulated prices, overcharged
items and declaring of sales and discounts are a big eye-wash. Malls and super/big bazaars may
have been a hit in the metros and urban centers, however how long would it last.
WHY:- This study has helped us in knowing that no doubt the organized retail sector is growing
in urban and metros but in rural India which is one of the biggest untapped market in the world
still the survival of organized retail in rural India is still a matter of discussion.
Krishnan(2010) found that it is important to note that value is function of not just price, quality
and service but can also be enhanced by personalization and offering a memorable experience. In
fact, building relationships with customers can by itself increase the quality of overall customer
experience and thus the perceived value. But most importantly for winning in this intensely
competitive marketplace, it is critical to understand the target customer's definition of value and
make an offer, which not only delights the customers but also is also difficult for competitors to
replicate.
WHY:-
28 | P a g e
Rao (2010) written that Foreign Direct Investment (FDI) is one of the major sources of
investments for a developing country like India wherein it expects investments from
Multinational companies to improve the countries growth rate, create jobs, share their expertise,
and research and development in the host country. There have been many discussions on this
issue and recently the Government had decided to put up a paper for discussion in the month of
July to take views from all the stake holders about the impact and their views on allowing FDI in
the multi brand retailing and the commerce ministry is planning to process all the views of the
stake holders on October 15th 2010 before putting up the issue in front of political leadership
WHY:-
Singh (2010) studied that mall and supermarkets are not threat to Indian retail industry. Even the
biggest of domestic players in organized retail lack the muscle and resources to cater to
significant proportion of Indian population. The bulk of future growth in retail will come from
rural population, which is a segment that organized retailers will not be able to cover. The
biggest draw for organized retail all over the world has been an innovative format – called the
discount stores. These stores sell grocery items at hugely discounted prices, for the simple reason
that high margins make such a move possible. In India, the margins are already wafer thin, even
at the retailer’s level. Therefore, supermarkets will find it very hard to attract customers on the
price front – unless they are ready to bear huge losses for a long, long time. Despite of what the
media and business leaders want us to believe, the average Indian customer has very limited
purchasing capacity. Even the affluent buyers are not profligate spenders – we Indians love to
extract maximum ‘value for money’. Purchasing at the local kiranawalla gives us valuable
opportunity to bargain
29 | P a g e
Objective of the Study
1) To find out the effect of organized retail on small and medium scale unorganized retailers
2) To know the factors which are responsible for shifting of customers from unorganized
retail to organized retail.
Scope of the study
This research study throws light on the Retailing concept and the main objective of the research
is to find the “impact of organized retail on unorganized retail sectors” This research work and
survey would help to know the impact of organized retail on unorganized retailers and over all
30 | P a g e
employability and economic growth of the country. The location in which this study is conducted
is Jalandhar and the duration of the study is from October 2010 to April 2011.
Need of study
Retail is clearly the sector that is poised to show the highest growth in the next five years. The
sector is set for a revolution, as both the present players and new entrants are gearing up to
explore the market. This sector contributes 10% of India's GDP and the current growth rate is
8.5%. The present size of the organized retailing sector is approximately 3% and is expected to
grow to 25-30% by the year 2010. There are about 300 new malls, 1500 supermarkets and 325
departmental stores currently under construction. Many players are coming up with huge
investments, due to which the present 12 million mom-and-pop shops and kirana stores fear
losing their business. Most predictions say that the sector might reach to US$ 900 billion by the
year 2011.
So due to such huge entry of organized retail sector in India growth of unorganized retailer
declined and affected from organized retailer sector. So it became necessary to study what
impact has been seen and will be in coming future due to such huge entry of organized retailer
sector.
RESEARCH METHODOLOGY:
Defining the problem:
This study deals with the “Impact of organized retail on small and medium scale unorganized
retailers” is a descriptive research design.
Developing the research plan-
The research plan calls for decision on data sources, research instruments, sampling plan and
contact method.
Collection of Data:
31 | P a g e
Primary Data: In this study primary data is collected through Questionnaire. Two types of
questionnaires are used for survey, one questionnaire is for retailers and other is for customers.
Secondary Data: In this study secondary data is collected from various publications of
organized retailing, various papers and journals published time to time and newspaper.
Research Approach: The method adopted for research is a field survey.
Research instrument-
The research methodology for collecting the primary data is in the form questionnaire.
Questionnaire consists of set of questions presented to respondents for the answers.
Questionnaire will have open–ended and close-ended questions. There is a set of 8 to 9 questions
which are asked from unorganized retailers and the customers of organized and unorganized
retailers.
c) Sampling plans- Sampling plans call for three decisions:
Sampling Unit: - The target population will be the vendors, organized retailers customers etc of
Jalandhar.
Sample Size: - Sample size of 100 unorganized retailers and 100 customers of organized and
unorganized retailers are taken.
Sample procedure: - Convenience sampling is used for conducting this study.
d) Research Technique: -
In this study three types of research techniques are used namely Factor Analysis, Chi-square,
and Percentage method.
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INTERPRETATION
CUSTOMER’S POINT OF VIEW

(1) Where do you purchase from?
Response % of Respondents
Organized retails 28
Unorganized retail 39
Both 33
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Interpretation:
From above data it can be interpreted that large number of people purchased from unorganized
retailers. It means the trend to purchase from unorganized retrial is still alive but purchasing from
organized retailers are catching up.
(2) How frequently you purchase from these organized stores?
Yearly 7
Monthly 33
Fortnightly 37
Weekly 33
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Interpretation:
From the above data it can be interpreted that people prefer to visit organized retail stores once in
a week, it means they don’t purchase from organized stores as frequently as from unorganized
one
(3.) How much amount you spend monthly while purchasing from retail store (organized)?
Less than 500 8
500-1000 18
1000-2000 46
Above 2000 28
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Interpretation:
From above it is found that around 32% of customer spends around Rs.1000-2000 in a month
and around 28 % of customer are very regular and spend more that Rs.2000 in a month when
they purchase from organized retailers.
About 5% of Customer still prefer going to the Kirana Store as they just spend around Rs.500 per
month from organized retailers.
(4.) How much amount you spend monthly while purchasing from unorganized retail?
Less than 500 0
500-1000 42
1000-2000 36
Above 2000 22
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Interpretation:
From above it is found that around 42% of customers spend between Rs.500-1000 in a month
when they do purchasing from other than organized shops or stores. And around 36% Customers
are very regular and spend around Rs.2000 and above.
(5) Rate the factors which influence you to visit organized retail store instead of unorganized
retail store? (Please rank as 1 to ‘Most Influential’ and 5 to ‘Least influential’)
KMO and Bartlett’s Test- Measures of sample adequacy such as Bartlett’s test of spnerecity
and KMO value showed that data was fit for factor analysis. Generally, KMO value greater than
0.5 is desirable. The KMO value is 0 .590, it makes the data fit for factor analysis and Bartlett’s
test also satisfied the condition of significance of chi square value.
37 | P a g e
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling
.590
Adequacy.
Bartlett's Test of Approx. Chi-Square 141.416
Sphericity df 105
Sig. .010
Principal Component Analysis- It was used for extracting factors and seven (7) factors were
retained depending on eigen values and variance explained by each factor. The standard practice
normally used is that all the factors with an Eigen value of 1 or more should be extracted. Table
clearly shows that there are 7 factors having Eigen value more than 1. Total variance explained
by extracted seven factors was 65.053%.
Total Variance Explained

Initial Eigenvalues Extraction Sums of Squared Loadings
Comp % of Cumulative % of
onent Total Variance % Total Variance Cumulative %
1 1.873 12.488 12.488 1.873 12.488 12.488
2 1.757 11.711 24.199 1.757 11.711 24.199
3 1.489 9.927 34.126 1.489 9.927 34.126
4 1.286 8.572 42.697 1.286 8.572 42.697
5 1.211 8.076 50.774 1.211 8.076 50.774
6 1.126 7.505 58.278 1.126 7.505 58.278
7 1.016 6.775 65.053 1.016 6.775 65.053
8 .945 6.299 71.352
9 .851 5.674 77.026
10 .742 4.950 81.976
11 .674 4.493 86.469
12 .640 4.264 90.733
13 .526 3.505 94.237
14 .467 3.116 97.353
15 .397 2.647 100.000
38 | P a g e
1 1.873 12.488 12.488 1.873 12.488 12.488
2 1.757 11.711 24.199 1.757 11.711 24.199
3 1.489 9.927 34.126 1.489 9.927 34.126
4 1.286 8.572 42.697 1.286 8.572 42.697
5 1.211 8.076 50.774 1.211 8.076 50.774
6 1.126 7.505 58.278 1.126 7.505 58.278
7 1.016 6.775 65.053 1.016 6.775 65.053
8 .945 6.299 71.352
9 .851 5.674 77.026
10 .742 4.950 81.976
11 .674 4.493 86.469
12 .640 4.264 90.733
13 .526 3.505 94.237
14 .467 3.116 97.353
Extraction Method: Principal Component
Analysis.
39 | P a g e
Rotated Component Matrix- The results were obtained through orthogonal rotations with
variance and all factors loadings greater than 0.40 were retained.
Component Matrixa
Component
1 2 3 4 5 6 7
PRICE -.562 .120 .562 -.025 -.005 -.133 .078
QUALITY -.491 .081 -.040 .512 .327 -.164 -.218
OFFER -.344 .229 .656 .080 .181 .176 -.086
CONVENIENCE .101 -.358 .154 -.042 .596 .077 .052
IMAGEOFSTORE .022 -.550 .210 -.133 .111 .265 -.278
VARIETY .469 .529 .017 .101 .335 .081 -.246
AMBIENCE .453 -.102 -.460 -.049 -.034 .141 .508
AFTERSALESERVICE .310 .174 -.109 .382 .060 -.505 .294
ADVERTISEMENT -.096 .246 .378 -.477 .261 -.388 .382
CREDITCARD -.139 .460 .149 .110 .070 .569 .260
RECREATION .659 .165 .175 -.045 .387 -.066 -.284
PARKING .117 .371 .552 .179 -.082 .431 .184
FRIENDS .119 -.192 .338 .664 -.199 -.035 .043
PEERS .163 .667 .117 .209 .133 .135 .256
FAMILYMEMBERS .387 .116 .152 -.086 -.548 -.094 -.274
Extraction Method: Principal Component Analysis.
Naming of Factors- All the factors have been given appropriate names according to the
variables that have been loaded on each factor.
Factor Factor Name Statements Factor
No Loading
40 | P a g e
Pricing of organized player is one of the reason for .562
the shift
Quality of products is the reason for the shift of .512

1 Product
customers from unorganized to organized retailers
Features
Variety of products available for one category of .529
products is the reason for the shift
Offers given by organized retailers is the reason of .656

shift
2 Credit card facility given by organized retailers is the .569

reason for shift
Facilities
Availability of good parking space is the reason for .552
shift
Ambience of the store is the reason for the shift .508

3
Environment
Source of Recreation .659
Customers are influenced by their friends to visit .667
4 Influencer Customers are influenced by their peers to visit .664
41 | P a g e
INTERPRETATION
Product Feature
Organized retailers are providing the customer with wide Variety of products inside one roof
with good Quality and Reasonable Price and these are the tool which attracts number of
customers towards organized retail stores but there are some other factors too, which makes
customer to purchase from organized stores such as offers available on the products.
Thus product features like quality, price, and variety are the reason for the shift of customers
from unorganized retailer to organized retailers.
Facility
Credit card facility given by organized retailers is the reason for shift because this facility allows
customer to do shopping without carrying the money with them. The parking facility given by
organized retailer is also the reason of shift of customer from unorganized to organized retailing
because people don’t get space to park their vehicle while visiting unorganized retailers.
Thus facilities like credit card and parking are the reason for shift of customers from unorganized
to organized retailer
Environment
Organized retailer gives its customer with the best Shopping Experience by providing them the
Luxury through the Ambience which is their in the Store (AC, Music, Announcement,
Promotions).
Thus ambience and shopping experience are the reason for shift of customers from unorganized
retailers to organized retailers.
Influencers
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As per the analysis majority of people purchase or visit organized stores due to the influence of
media, i.e. the advertisement by the retailers, their promotion schemes ( BigBazar -Isse sasta aur
kahan), their offers like (Bigbazar-Biggest Sale in last week of month) but our friends and family
are even very much important in influencing us to purchase from the Big Retailers. Thus we can
say friends and peers plays very vital role to influence the customer to visit the organized
retailers.
(6) What do you purchase from these stores?
Clothes 28
Groceries 23
Utensils 27
Other 22
43 | P a g e
Interpretation:
Customer usually visit the Store for purchasing the Clothes, Utensils and Groceries and some
other items too but the prefer Clothes the most .The result found from analysis indicates that the
purchasing item from organized stores is clothe instead of any other things.
(7) Where would you suggest your friends to go for shopping?
Suggestion % of Respondents
Organized retail 75
Unorganized retail 25
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Interpretation:
Due to the luxuries shopping experience in the retail store and availability of good merchandise
of better quality and price customers always suggest their friends and relatives to visit to a
Organized Stores.The result taken from analysis indicates that customers have better experience
with organized retailers and that’s why they suggest their near and dear to go to organized stores
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DEALER QUESTIONNAIRE
DATA INTERPRETATION & ANALYSIS
(1) When we talk about ‘Organized Retail Store’, what comes first into your mind?
Name of store Percentage of Respondents.
Vishal Mega-Mart 27
Big Bazar 43
Easy Day 17
Other 13
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Interpretation:
The Graph shows that majority of people are aware of organized retail stores and awareness
about” Big Bazar” highest, followed by Vishal Mega Mart and than by Easy Day.
(2) Due to fast growing organized retail chains across the country, what impact it may have on
the small and medium scale unorganized retail stores?
KMO and Bartlett’s Test- Measures of sample adequacy such as Bartlett’s test of spnerecity
and KMO value showed that data was fit for factor analysis. Generally, KMO value greater than
0.5 is desirable. The KMO value is 0 .545, it makes the data fit for factor analysis and Bartlett’s
test also satisfied the condition of significance of chi square value.
KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling
.545
Adequacy.
Bartlett's Test of Approx. Chi-Square 51.204
Sphericity df 55
Sig. .620
Principal Component Analysis- It was used for extracting factors and six factors were retained
depending on eigen values and variance explained by each factor. The standard practice normally
used is that all the factors with an Eigen value of 1 or more should be extracted. Table clearly
shows that there are 6 factors having Eigen value more than 1. Total variance explained by
extracted seven factors was 67.282%.
47 | P a g e
1 1.498 13.618 13.618 1.498 13.618 13.618
2 1.341 12.187 25.805 1.341 12.187 25.805
3 1.276 11.599 37.404 1.276 11.599 37.404
4 1.178 10.706 48.110 1.178 10.706 48.110
5 1.077 9.790 57.900 1.077 9.790 57.900
6 1.032 9.382 67.282 1.032 9.382 67.282
7 .962 8.742 76.024
8 .798 7.252 83.276
9 .677 6.156 89.432
10 .644 5.853 95.285
11 .519 4.715 100.000
Extraction Method: Principal Component
Analysis.
Rotated Component Matrix- The results were obtained through orthogonal rotations with
variance and all factors loadings greater than 0.40 were retained.
48 | P a g e
Component Matrixa
Component
1 2 3 4 5 6
LOWSALES .632 -.356 -.008 .124 -.181 .407
LOWMARGINS .161 -.047 -.033 .613 .564 -.277
COMPETITION -.362 -.190 -.288 -.462 .516 -.030
LOWGROWTH .239 .020 .366 -.256 .274 -.027
ALTERNATIVE .590 .234 .375 -.152 .376 .420
REDUCELOYALTY -.472 .514 .213 .137 -.328 .375
STAFFREDUCTION .532 .399 -.126 .160 -.263 -.513
NEWPRODUCTS -.390 .102 .398 .661 .182 .133
STORESPACE -.101 .561 -.538 .014 .348 .239
REDUCTIONINPRODUCT .076 .631 .364 -.331 .051 -.246
HOMEDELIVERY .259 .509 -.526 .124 -.056 .269
Extraction Method: Principal Component Analysis.
a. 6 components extracted.
Naming of Factors- All the factors have been given appropriate names according to the
variables that have been loaded on each factor. The seven factors depicted in Table 4.4, the
factors were labeled as
Factor Factor Name Statements Factor Loading

No
Lower the sales revenue .632
1 Direct Impact
Lower the Margin in the product .613
Reduce the loyalty and retention among .514

customers
49 | P a g e
Reduction in staff .522
2 Indirect Impact
Addition of New Product Line .661
Increase in the store space .561
Improved Home Delivery System .509
Interpretation
Direct Impact
Organized retailers have reduced the sales and profit margin of the unorganized retailers. But the
sales revenue of unorganized retailers is most affected by organized retailers because most of
customers like to purchase from organized retailers, as organized retailers offer every thing under
one roof. They have also increased competition and diminished the growth of small and medium
retail store which is reducing the profit margin of unorganized retailers.
Organized retailing has also affected the loyalty of customers for unorganized retailers because
the growth of organized retailing has also increased the option for customers.
Indirect Impact
The result shows that unorganized retailers have reduced their staff to reduce cost so that they
can give discounts or other services to their customers in order to compete with organized
retailers.
Unorganized retailers have also added new product line in their stores in order to attract customer
customers on the basis of variety and range of product.
50 | P a g e
Unorganized retailers have increased the store space in order to give increase variety, add new
product line and to give feel of organized retailers.
Unorganized retailers are putting their best effort to retain their customers base by improving
Home Delivery System and by providing the good combination of Assortment and Variety.
(3) Up to what extent these retail stores have affected the sales of your store.
Decrease in sales by around less than 10 % 51
11-20% 25
20 -30% 14
More than 30% 10
51 | P a g e
Interpretation:
As per the analysis, organized stores have profound impact on the sales of unorganized stores but
it is very less, it means organized stores have not affected their business badly.
(4) What are you doing to cope up with these organized retailers?
Improving the quality 40
Improving the delivery system 12
Increasing the variety 20
Providing credit facility 28
Interpretation:
The result shows that unorganized retailers are giving more preference in improving the quality
as the customer is getting the better quality product in the organized retail stores. They have even
52 | P a g e
started the giving the product on Credit basis for Retaining their customer base and are thus
putting in their best efforts to cope up with organized retailers by improving their Delivery
system and by providing the good combination of Assortment and Variety.
(5) How they have affected your business?
Reason % of Respondents
By Better quality 33
Wide variety 21
Deep assortment 22
Quick service 24
Analysis and testing
Chi-square test has been used in this study to find out the affect of organized retailer on
unorganized retailers.
Null Hypothesis Ho: Organized stores don’t have affected the business of unorganized
stores through quality
Alternative Hypothesis H1: Better quality of organized stores have affected the business of
unorganized retail stores.
CHI-SQUARE TEST
observed alue(O) Expected value(E) O-E (O-E)*(O-E) {(O-E)*(O-E)}/E
41 25 16 256 10.24
22 25 -3 9 4.36
17 25 -8 64 2.56
20 25 -5 25 1
53 | P a g e
Chi-square = 18.16
Degree of freedom =3
Table value at 5% level of significance = 7.815
From above it is found that the tabulated value is less than the calculated value, so the null
hypothesis is rejected and alternative hypothesis is accepted.
Interpretation
The Organized Retail store is affecting the business by providing the best and better quality
product, giving the customer a greater choice i.e. the best mix of merchandise assortment and
variety. The automated systems like the billing counters, checkouts result in providing the
quick service to the customers. Thus the result which has been found from the analysis
concluded that the most of the fast growing retail chain has impact on unorganized retail stores.
(6) Why do you feel threaten by organized retailers?
Reason % of Respondents
Lack of strategy 24
Lack of resources 35
Lack of money 29
Lack of skilled full staff 12
54 | P a g e
Interpretation:
The Organized Retail Sector is one of the Booming Sector so most of the Skilled Person and
Other Personnel are attracted towards it. And on the other had the local shop owner will hire the
local staff. As per the analysis, unorganized retailers feel threatened by the openings of organized
retrial in nearby locality because they don’t have as many resources as organized retailers and as
result they are fail to compete with them and finally their shares decreased.
(7) What do you think government should take initiative to curb the rampant growth of these
organized stores?
Steps % of Respondents
Govt should increase the taxes 19
Increase the norms and procedures 30
Increase the entry barriers 35
55 | P a g e
All of the above 16
Interpretation:
The result found from analysis shows that majority of unorganized retailers are in favor of
increasing entry barriers for FDIs and other foreign retail organizations so that the heat of
competition could be removed. They even want the government to tighten the Procedure and
Norms in entering the Market and increasing the amount of Tax or imposing some duties will
help the Unorganized Retailer to stay in the market for a long way.
(8) Do you think Govt. should provide more facilities and subsidies to unorganized retailers?
Facilities and subsidies % of Respondents
It will be a boost up for them 23
56 | P a g e
it will bring them to main steam 29
it will give them a chance of survive 37
it will heal their wounds 11
Analysis and testing
We have used chi square test for the current analysis and the tabulated value for the chi-
square test has been given below
Null Hypothesis Ho: Government should not provide any facility to unorganized retailers
Alternative Hypothesis H1: Government should provide facilities and subsidies to

unorganized retailers.
CHI-SQUARE TEST
Observed value(O) O-E (O-E)*(O-E) {(O-E)*(O-E)}/E

Expected value(E)
23 25 -2 4 0.16
29 25 4 16 0.64
37 25 12 144 5.76
11 25 -14 196 7.84
Chi-square = 14.4; Degree of freedom =3; Table value at 5% level of significance = 7.815
From above it is found that the tabulated value is less than the calculated value, so the null
hypothesis is rejected and alternative hypothesis is accepted.
Interpretation
57 | P a g e
From above it is found that the more government would provide facilities to the unorganized
retailers; the more it would give them chances of survival and encouragement to carry on their
business.
LIMITATIONS
1. There was lack of time on the part of retailers and customers

2. There may be some biased information provided by the retailers and customers
3. It is very much possible that some of the respondents might have given the incorrect
information.
4. Lack of coordination towards retailers due to busy schedule
5. As the respondents were scattered so to find out them was difficult.
FINDINGS
• Unorganized retailers in the surrounding area of organized retailers experienced a decline in

their volume of business and profit after the entry of large organized retailers.
• The adverse impact on sales and profit weakens over time.
• There is competitive response from traditional retailers through improved business practices
and technology up gradation.
• A majority of unorganized retailers is keen to stay in the business and compete, while also
wanting the next generation to continue likewise.
• Small retailers have been extending more credit to attract and retain customers.
• Consumers have definitely gained from organized retail on multiple counts
• Overall consumer spending has increased with the entry of the organized Retail.
• Proximity is a major comparative advantage of unorganized outlets.
58 | P a g e
RECOMMENDATIONS
• Unorganized Retailers should take feedback from the customer regarding their services and
qualities rendered to them
• Unorganized Retail store should provide more credit facility to their customer so that
customer will purchase more beyond their capacity and it will increase the sale of retail store
• Quality ,variety and assortment has to be improved , if unorganized retailers have to
compete with organized retailers
• Every new technique should be used to attract the customers which are used by organized
retailers
• An unique positioning strategy should be used either through product, workforce or anything
else to attract more and more customers
• Unorganized Retailers should try to match the demand and supply so that they will sale the
thing to the customer without any delayed
• Unorganized Retailers should concentrate more on their existing customers and should try to
retain them as long as possible.
CONCLUSION
To conclude, it can be said that though the unorganized retail industry has reached its maturity
and the organized retail industry is at its infancy. But with the huge potentiality existing in the
Indian market, it is expected to grow in leaps and bounds in the near future.
• Organized stores have profound impact on un organized retail stores

• Organized retail stores has been contributing to the nation through employment
generation, GDP contribution and eradication of poverty
• Overall, it can be said that “Retail Industry" in India will emerge as one of the best 5
Business sectors in this decade.
59 | P a g e
• Although there are rampant growth of organized retail stores but still majority of
customers of middle class and lower middle class prefer to buy from unorganized retail
stores
• Above middle class and small portion of middle class are main beneficiaries of
organized retail stores
• The percentage of closures of unorganized retail stores due to the openings of organized
retail stores are very less
• Unorganized retailers still fighting well with organized retailers through credit facility
,relationship and loyalty.
60 | P a g e
REFERENCES
 Anand, V. (2003) “Using assessments of sandwich year and academic work performance
on business studies degree course” Management research news. Vol.-13, no.-2, PP- 9 to
99.
 Arons, L. (2001),”Does TV viewing influence store image and shopping frequency?

“Journal of retailing, vol. 37n0.3, pp.1-13.
 Business Standard (2009), “No negative impact of organized retail on unorganized

sector”http://www.business-standard.com/india/news/no-negative-impactorganized-
retailunorganized-sector/79169/on, accessed on 11 November 2010.
 Goswami, P. and Mishra, S. (2009), “Would Indian consumers move from kirana stores
to organized retailers when shopping for groceries?", Asia Pacific Journal of Marketing
and Logistics, Vol. 21 Iss: 1, pp.127 – 143
 Griffin J. (2004), “Frequently asked questions about consumer loyalty”. Available at

http://www.loyaltysolutions.com accessed on 12 November 2010
 Joseph, M., Gupta, M., Soundararajan, N., Sahu, S. (2008), “Impact of Organized
Retailing on the Unorganized Sector”
61 | P a g e
http://www.eSocialSciences.com/data/articles/Document12392008160.7534143, accessed
on 11 November 2010.
 Kacker, R. (2008), “Organized and unorganized retail segments can coexist and grow
together”, http://www.indiaretailbiz.com, accessed on 10 November 2010
 Klein, J and Dawar, N (2004), “consumer social responsibility and consumer’s

attributions and brand evaluations in product harm crisis” International journal of
research in marketing, Vol.: 21, Iss: 3, pp: 203-17.
 Krishnan, R. (2010), “Random Rables”, http://ravekris.blogspot.com/2010/03/organized-

retail-in-india.html, accessed on 11 November 2010
 Krishnamoorthy, S. (2008), “Impact of organized retailing on the unorganized sector: A

review of the study by ICRIER”, Labour File, Vol: 6, Iss: 2, pp: 45-48
 Kumar,D.,Babu,C., Sucharitha, J.(2009), “Issues and Challenges for New Entrants” ,

Delhi Business Review X, Vol. 10, Iss: 1, pp.57-79
 Miller, N.J. and Besser, T.L. (2000), “The importance of community values in
smallbusiness strategy formation: evidence from rural Iowa”, Journal of Small
BusinessManagement, Vol. 38, Iss: No. 1, pp. 68-85.
 Nath, K. (2008), “Government studies organized retailing on unorganized retail trade”,

http://www.thaindian.com/newsportal/india-news/government-studies-organized-
retailing-on-unorganized-retail-trade_10043629.html, accessed on 10 November 2010
62 | P a g e
 Rao, A. (2010), “FDI in Multi Brand Retailing in India”,
http://www.articlesbase.com/strategic-planning-articles/fdi-in-multi-brand-retailing-in-
india-3406940.html, accessed on 7 November 2010.
 RediffBusiness.(2007), “Organied retail not to hit kiranas: Govt”

http://www.rediff.com/money/2007/dec/13retail.htm, accessed on 7 November 2010.
 Sadasivan, K.,and Premkumar, B.(2009), “Organized Retailing Issues and challenges in

Indian Scenario”, Delhi Business Review X, Vol. 10, Iss:1, pp.121-143
 Shivkumar, S. (2007), “Organized vs. unorganized retail: Making an issue of a non-

issue”, http://www.merinews.com/article/organized-vs-unorganized-retail-making-an-
issue-of-a-non-issue/125090.shtml, accessed on 10 November 2010
 Shukla, P. (2009), “Store Choice Decision in Organized Retail-Building and Retaining

Competitive Advantage: Issues, Challenges and Future Prospects”, Delhi Business
Review X, Vol. 10, Iss: 1, pp.205-219, accessed on 11 November 2010.
 Singh, S. (2010), “Malls & Supermarkets – Are They Threats to Indian Retail Industry?”,
http://indianblogger.com/malls-supermarkets-%E2%80%93-are-they-threats-to-indian-
retail-industry.htm, accessed on 5 November 2010
63 | P a g e
APPENDIX
QUESTIONNAIRE
(FOR RETAILER)
I am a student of “LOVELY PROFESSIONAL UNIVERSITY”, DEPARTMENT OF

MANAGEMENT, Jalandhar-Ludhiana GT Road, (District- Kapurthla) want to know
“Impact of Organized Retailer on Small and Medium Scale Unorganized Retailers”
Name ……………………. …………. Occupation: ………………………..
Address…………………….. .…… Contact No..:………………………..
1) When we talk about ‘Organized Retail Store’, what comes first into your mind?
64 | P a g e
Big Bazaar Vishal Mega Mart
Easy Day Reliance Fresh
Other Specify_____________
2) Due to fast growing organized retail chains across the country, what impact it may have
on the small and medium scale unorganized retail stores.
(Please rank as 1 to ‘Most Influential’ and 5 to ‘Least influential’).
FACTOR 1 2 3 4 5
Lower the sales
Lower the margins
Increase the competition
Lower the growth of small and medium retail stores
Increase the number of alternative products/services in

market
Reduce the loyalty and retention among customers
Staff Reduction
Add in new products
Increased Store Space
Discontinuation of some product lines
Improved Home Delivery
3) Up to what extent these retail stores have affected the sales of your store?
Decrease by less than 10% Between 11%-20%
Between 21% - 30% More than 30%
65 | P a g e
4) What are you doing to cope up with these organized retailers? (Rate on 1 for Mostly
Used and 5 Least Used)
Improving the quality _________
Improving the delivery system _________
Increasing the variety _________
Providing credit facility _________
Improving the ambience _________
5) How they have affected your business?
1. By Better quality
2. Wide variety
3. Deep assortment
4. Quick service
6) Why do you feel threaten by organized retailers?
1. Lack of strategy
2. Lack of resources
3. Lack of money
4. Lack of skilled full staff
66 | P a g e
7) Do you think government should take initiative to curb the rampant growth of these
organized stores?
1. Govt. should increase the taxes
2. Increase the norms and procedures
3. Increase the entry barriers
4. All of the above
8) Do you think Govt. should provide more facilities and subsidies to unorganized retailers?
1. It will be a boost up for them
2. It will bring them to main steam
3. It will give them a chance of

survive
4. It will heal their wounds
9) Do you think these emerging organized stores have any contribution to national
economy?
Yes---------------------------------------------------No
10) Any Suggestions
………………………………………………………………………………………………….
67 | P a g e
Thank you very much
QUESTIONNAIRE
(FOR CUSTOMER)
I am a student of “LOVELY PROFESSIONAL UNIVERSITY”, DEPARTMENT OF

MANAGEMENT, Jalandhar-Ludhiana GT Road, (District- Kapurthla) want to know
“Impact of Organized Retailer on Small and Medium Scale Unorganized Retailers”
Please help us by providing information to us through filling this Questionnaire.
Name: ……………………………………….. Occupation: ……………………………………...
Address:………………………………………Contact No: ………………………………………
1) Where do you purchase from?
1. Organized retails
2. Unorganized retail
68 | P a g e 3. Both
2) How frequently you purchase from these organized stores?
Yearly Monthly
Fortnightly Weekly
3) How much amount you spend monthly while purchasing from retail store (organized)?
Up To 500 501-1000
1001-2000 Above 2000
4) How much amount you spend monthly while purchasing from unorganized retail?
Up To 500 501-1000
1001.2000 Above 2000
5) Rate the factors which influence you to visit organized retail store instead of unorganized
retail store? (Please rank as 1 to ‘Most Influential’ and 5 to ‘Least influential’)
69 | P a g e
Options Features 1 2 3 4 5
A Price of Products
B Quality of Products
C Offers on Products
D Convenience to buy
E Brand Image is store
F Variety of Products
G Ambience
H After Sale Service
I Advertisement
J Credit Card Facility
K Recreation For Family
L Parking Space
M Friends
N Peers
O Family Members
6) What do you purchase from these stores?
70 | P a g e
1. Clothes
2. Groceries
3. Utensils
4. All of the above
7) Don’t you think these items are available at unorganized stores as well?
YES---------------------------------------------NO
8) Where would you suggest your friends to go for shopping?
1. Organized retails
2. Unorganized retail
3. Both
9) What prompts you for this suggestion?
1. Experience
2. Quality
3. Ambience
4. Attitude of employees
71 | P a g e
10) Any Suggestions
………………………………………………………………………………….
……………………………………………………………………. ……………………………….
Thank you very much
72 | P a g e
73 | P a g e

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IMPACT OF ORGANIZED RETAIL ON SMALL AND MEDIUM SCALE

Submitted to Lovely Professional University

Submitted by: Supervisor:

Akhlesh Kumar RR1903A54 Ms. Savita Dhingra

Gulshan Kumar RR1904A01 Lecturer.

Rahul Verma RR1904A04

Rajad Sharma RR1904A07

LOVELY PROFESSIONAL UNIVERSITY

S. No. Chapter Page No.

2. Review of literature 17-28

3 Need, Objective, Scope & Methodology 29-31

4 Data analysis and Interpretation 32-54

5 Limitation, Findings, Recommendations & Conclusion 55-57

7 Appendix (Questionnaire) 61-69

o Selling directly to customers with out having any intermediaries

o Selling in smaller units / quantities, breaking the bulk

o Present in neighborhood or in the location which is quite convenient to the

o Very high in numbers

o Recognized by their service levels

o Fitting any size or location

ORGANIZED VS UNORGANIZED RETAIL

Country Sales (US$ bn) Share of Organized Retail

Retailing in India is witnessing a huge revamping exercise.

• Estimated to be US$ 900 billion by 2014

• Ranked second in a Global Retail Development Index of 30 developing countries drawn

India’s economy is booming, due to so many reforms: -

• More nuclear families in urban areas

• Western influenced life style is adopted by all the people.

• Growth in expenditure for luxury items increases.

REASON FOR THE GROWTH

• Existing Indian middle classes with an increased purchasing power

• Rise of upcoming business sectors like the IT and engineering firms

• Change in the taste and attitude of the Indians

• Heavy influx of FDI in the retail sectors in India

• Unorganized market: Rs. 583,000 crores

The reasons might be-

Country Retail Sector's share in GDP (in %)

Source:CII-AT Kearney Retail Study

INDIAN RETAIL: PAST Vs PRESENT

Yardstick Situation in 06-07 Situation in 09-10

Value of retail sales Rs. 10,20,000 crore Rs 14,00,000 crore

Annual growth rate 5% 7.7%

Value of organized market Rs 35,000 crore Rs 56,000 crore

Share of organized market in the sector 3.4% 5%

CHALLENGES FACED BY INDUSTRY

• The tax structure in India favors small retail business

The ERP Initiative

Customer Interfacing Systems

Operation Support Systems

Strategic Decision Support Systems

Retailing Formats in India

VISHAL MEGA MART

Lifestyle is an international fashion store of the Landmark Group, a Dubai-based company.

WILLS LIFE STYLE

Scope of the study

Defining the problem:

Developing the research plan-

c) Sampling plans- Sampling plans call for three decisions:

Sample procedure: - Convenience sampling is used for conducting this study.

CUSTOMER’S POINT OF VIEW

(2) How frequently you purchase from these organized stores?

observed alue(O) Expected value(E) O-E (O-E)(O-E) {(O-E)(O-E)}/E

Observed value(O) O-E (O-E)(O-E) {(O-E)(O-E)}/E