http://www.iaeme.com/IJM/index.asp 1 [email protected]
International Journal of Management (IJM)
Volume 7, Issue 4, May–June 2016, pp.01–16, Article ID: IJM_07_04_001
Available online at
http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=7&IType=4
Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.com
ISSN Print: 0976-6502 and ISSN Online: 0976-6510
© IAEME Publication
A STUDY OF ECONOMICAL IMPACT OF
ENTRY OF ORGANIZED RETAILERS ON
UNORGANIZED RETAILERS WITH
SPECIAL REFERENCE TO MAHARASHTRA
STATE
Swati Vijay
Assistant Professor
Department of Management Studies,
Sinhgad College of Engineering, Pune–MS
ABSTRACT
This research work deals with the major implications of modern retailing
in Maharashtra state with main objectives to find out economical impact and
employment impact on unorganized business, manufacturers, intermediaries
due the entry of organized retailers when there is FDI in organized retail in
Maharahstra
Only four categories of products like A) Clothing, textile, fashion
accessories B ) Home appliances, Electronic, electrical equipments C) Food-
Grocery, D) Books, Music, Gifts are considered for study. For the study,
Geographically Maharashtra state is divided into six regions viz. Mumbai,
Nashik, Pune, Aurangabad, Amravati, Nagpur. The study is based on data
collected from organized retailers, unorganized retailers, Consumers,
intermediaries, manufacturers from all 6 regions of Maharashtra. The retail
store formats considered for the study are Supermarkets, Hypermarkets and
Discount Stores.
Segment wise - region wise – year wise data is collected and compiled
using questionnaires, interview method for calculating results. The data
analysis covers region wise and segment wise economical impact, employment
scenario, local business trends, customer perceptions. At the end, the study
also tries to bring out impact of technology and on line mode of transactions
on customers and retailers.
With the stringent competition around & in spite of facing financial
constraints, majority of unorganized retailers do not see Loss of sale,
Reduction in sale, Reduction in their staff and loss of customers. Various
satisfaction factors considered by customers for buying at organized and
unorganized retail stores are discussed separately. Segment wise – region
Swati Vijay
http://www.iaeme.com/IJM/index.asp 2 [email protected]
wise and year wise findings are stated separately for organized and
unorganized retailers ,manufacturers and intermediaries and customers..
Indian Retail sector is dominated by unorganized retailers. The entry of
organized retailer will improve infrastructure, technology, supply chain giving
consumer experience of buying products at lower prices. The frontend and
backend operations related to retail industry will increase employment
opportunities.
Key words: Economical Impact, Employment Impact, Organised Retailers,
Unorganized Retailers, Customer Perceptions, Local Business Trends
Cite this Article: Swati Vijay. A study of Economical impact of Entry of
organized retailers on unorganized retailers with special reference to
Maharashtra state. International Journal of Management, 7(4), 2016, pp. 01–
16.
http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=7&IType=4
INTRODUCTION
In recent times, The Indian retail industry is expanding and diversifying across the
country, thereby boosting the demand in good service to the customers as well. The
Indian retail industry has come of age and the demand for modern shopping centers
and shopping complexes, which offer shopping, food and entertainment under one
roof, is on the rise. A sizeable market of young working population, hefty pay-
packets, increase in the number of nuclear families in urban areas, higher disposable
income, growing consumer aspirations, western influences and rising demand for
luxury items are few of the factors that have spurred the growth of organised retail in
India. Earlier research in this area stated that unorganised retailers, manufacturers and
intermediaries have started feeling the competitive impact of organized retail through
both price and payment pressures. With this steep competition it is necessary to find
out impact of organised retailers on unorganised retailers, manufacturers, their
employees, customers and intermediaries.
Indian retail industry is divided into Organised retailing and Unorganised
retailing. Organised retailing includes corporate backed Hyper market, Supermarkets,
Departmental stores, Cash and Carry stores. Unorganised retailing is traditional
formats of low cost retailing Local Kirana shops, General stores, pavement vendors,
Fruits, vegetable and Food stores.
According to A T Kearney report (2011), organized retail accounts for 7% of
India’s roughly $435 billion retail market and is expected to reach 20% by 2020. India
is treated as a high potential market with accelerated retail market growth of 15 to 20
percent expected in the coming 5 years, supported by a GDP growth of 6 to 7 percent.
SIGNIFICANCE AND IMPORTANCE OF STUDY
Mukherjee et. al. (2011) found that the share of retail trade in GDP is approximately
11-12 per cent. In 2010, the Indian retail market was valued at $435 billion, of which
the share of organised or modern retail was 7 per cent i.e. $30.05 billion. The sector is
expected to grow to 20 per cent by 2020 (A.T. Kearney , 2011). Supporting
Government policies, FDI in retail, growing income and higher consumption pattern
of middle class wooing big retailers to open their outlets in India. (Handa & Grover,
2012) stated that by 2016-17 Indian Retail Business size will be US$1011bn which
was US$322 bn in 2006-07. This shows that Indian Retail Business Market is
A study of Economical impact of Entry of organized retailers on unorganized retailers with
special reference to Maharashtra state
http://www.iaeme.com/IJM/index.asp 3 [email protected]
growing. Kumar P. (2013) in stated that food and grocery retailing is estimated to
contribute to around 50% (Rs 3500-4000 billion) of the total sales from retailing.
It is necessary to find out whether such trends will continue in future. In a
competitive environment Manufacturers, intermediaries and employees are also
observing changes and feeling the impact when organised and unorganised businesses
are competing with each other. It is observed that customers buy from organised as
well as unorganized retail stores.
Intermediaries and manufacturers are feeling the competitive impact of organized
retailing. The retailing industry is generating huge employment opportunities in the all
functional areas viz. Store Operations, Merchandising, Purchase, Logistics,
Marketing, Publicity, Accounting and control. Singhal (2010) analysed that an
estimated 90+ million jobs will be created over the next five years, of which almost
50 per cent are expected to be in the services sector (45 million).
With new policy on the flow of FDI is expected to be more in infrastructure
development. Supporting to central government policies of FDI in organised retail,
Maharashtra has given nod for FDI in organised retail in state.
STATEMENT OF PROBLEM
In past few years cities in Maharashtra observed growth of organized retailers. Many
people expressed the concern having negative impact of organised retailers on
unorganized retailers. Hence the researcher has decided to find out “Economical
Impact of Entry of organized retailers on unorganized retailers in Maharashtra
state”.
Objectives of Study
Following objectives are stated for research work
1. To find out impact on unorganized business due to the entry of organized retailers
2. To assess the impact on employment and income in both organised and unorganised
retail sector
3. To study impact on consumers, intermediaries, manufacturers and farmers due to
entry of organised retailers
4. To study the increasing or decreasing trend in local business activity
Limitations of Study
Data analysis is based on the responses given by respondents
Only four categories of product like clothing and fashion , electronics and electrical,
food and grocery and books music & gifts are considered for study
No distinction is made with foreign and domestic organized retailers and
manufacturers based on their size of stores, capacity and income. Cash and Carry type
of Organised Retailers are not considered for this study
RESEARCH METHODOLOGY
The researcher has used descriptive research design method and stratified sampling
method. Within a strata, random sampling method to collect the samples. The
population for the study is organised and unorganised retailers, manufacturers and
intermediaries, Employees and consumers of retailers in Maharashtra. The samples
are collected from six geographical regions of Maharashtra viz. Mumbai, Nashik,
Pune, Aurangabad, Amravati, Nagpur. In each region The retailers are divided into 4
Swati Vijay
http://www.iaeme.com/IJM/index.asp 4 [email protected]
segments which are A ) Clothing, textile and fashion accessories B) Home appliances,
Electronic and electrical equipments C) Food and Grocery D) Books , Music, Gifts.
The following table describes the samples taken from each region and segments.
Sample size of Organised and Unorganised retailers, Manufacturers,
Intermediaries
Sr
No Category
No of
regions
Sample
from
Segment A
Sample from
Segment B
Sample
from
Segment C
Sample
from
Segment D
Total
sample
1
Unorganised retailers 6 8 8 8 8 192
2 Manufacturers 6 2 2 2 2 48
3 Intermediaries 6 2 2 2 2 48
4 Organised retailers 6 4 4 4 4 96
Sample size of Employees and consumers
Sr. No Type No. of retail outlets Number of samples Total
1 Employees of Organised 96 3 288
2 Employees of Unorganised 192 2 384
3 Consumers 98 10 980
Questionnaires, Observations, and Interview methods tools are used for collecting
primary data. The secondary data is collected by analyzing International and National
journals, articles from books, magazines and newspapers, websites and various
government policies.
LITERATURE REVIEW
Many research work identified benefits earned by consumers, government, small scale
industries and also to unorganized retail sector. Mishra & Dash (2008) analysed that
Organised retail has changed not only the Indian traditional retailing structure but also
the consumption behavior. In the article (Singh & Bose, 2011) identified that in India
with nearly 80 percent of the market controlled by tiny family-run shops. Organised
retail makes up only 6 percent of the market. John, Clark and Hojong (cited in Manju
& Malik, 2012) found out that helpfulness of sales person, friendliness, quality level,
merchandise selection and exchange, value for money, location of store etc are used
to measure customer satisfaction.
A research outline of PwC Research (2011) stated that the 700 million Indians
residing in rural India are an opportunity that retailers cannot ignore. India has a large
population of middle-class of 75 million households or 300 million individuals.
Joseph et al.(2008 ) in their study did not find any adverse impact of organized retail
on intermediaries. Manju & Malik, (2012) highlighted that as majority visitors are of
young group and their needs to taken into account while deciding market strategy. A
A study of Economical impact of Entry of organized retailers on unorganized retailers with
special reference to Maharashtra state
http://www.iaeme.com/IJM/index.asp 5 [email protected]
T Kearney report (2013) analysed that high operating costs, low bargaining power
with vendors, heavy discounting to improve sales have affected profits and expansion
plans.
Janardan (2014) discussed the need to optimize their supply chains and item
management processes. A study by Raut & Dash (2011) analyzed various major
factors that define consumer buying behavior like accessibility factors. Similar
findings are revealed by (Srivastava & Matta, 2012 ). Clement & Kodimela (2011)
examined the factors that influence the customers switching behavior to organized
retail. According to Sorescu. et al (2011), Retailers are often directly engaged with
large number of end consumers which creates opportunity and challenges for building
stronger relations with their customer base. Prabha Devi & Sellappan (2009) focused
on impact of service quality at retail stores. The quality services that are considered to
satisfy customers today may be different tomorrow.
Dubinsky, Skinner & Steven (1984) examined relationships among perceived job
characteristics, job satisfaction, motivation, organizational commitment, role
perceptions, and job performance of retail salespeople. Coelho, Augusto & Lages
(2011) identifies indirect effect of job complexity & work relationships on creativity.
They tried to find out impact of contextual factors on front line managers. According
to report on Skill Development (FICCI Report, 2010), there will be huge demand of
skilled manpower in shop floor executive, back store operations and merchandising.
Sahoo & Das (2011)
discussed about employee empowerment for competitive
advantage. Mukherjee & Goyal (2012) explores that increments in the organised retail
outlets are linked to the performance of the employees, while in the unorganised retail
outlets they are linked to employee’s years of experience. According to the
(Economic Survey 2013, 2013) , The traditional retailers are giving a strong
competition to organised retailers and the decision to permit foreign retailers to open
stores in the country will not affect small players in India.
IMAP Report (2010) highlighted that increase in global online population and
localization strategy promotes online retail spending. This increases cross border
online purchases. The study by Maki & Kokko (2012) identifies impact of automated
processes in retail on customers. Maheshwari (2004) stated that infrastructure such as
power, transport and telecommunication and water supply are important for economic
growth.
DATA ANALYSIS
The data analysis comprises of 3 different sections based on the objectives of the
research work. which are
Direct and indirect economic impact on unorganized business
Impact on employment and income in both organized and unorganized retail sector
Increasing and decreasing trend in local business activities
Impact on unorganised retailers
Swati Vijay
http://www.iaeme.com/IJM/index.asp 6 [email protected]
Figure 1 Year wise-Region wise - Segment wise Monthly income of unorganised retailers
The results from the above graph states that the monthly income of retailers from
Mumbai and Pune is higher than other regions where as it is lower for the retailers
from Aurangabad and Amravati. In all regions, for every year, the unorganised
retailer’s monthly income from the Food and Grocery segment is highest compared to
other segments.
The following figure 2 indicates opinion of unorganised retailers. The opinion of
retailers is collected in the scale of 1 to 5. 1 being low and 5 depicts high. The study
indicates that in spite of facing financial constraints, majority of unorganized retailers
do not see loss of sale, reduction in sale, reduction in their staff and loss of customers.
They have sensed little impact on prices of products due to increased competition.
0
10000
20000
30000
40000
50000
60000
2012
-201
3
2011
-201
2
2010
-201
1
2012
-201
3
2011
-201
2
2010
-201
1
2012
-201
3
2011
-201
2
2010
-201
1
2012
-201
3
2011
-201
2
2010
-201
1
2012
-201
3
2011
-201
2
2010
-201
1
2012
-201
3
2011
-201
2
2010
-201
1
Monthly income
Monthly income
Monthly income
Monthly income
Monthly income
Monthly income
Amravati Aurangabad Mumbai Nagpur Nashik Pune
Cloth,Textile
Electronics & Home appliances
Food & Grocery
Books Music Gifts
A study of Economical impact of Entry of organized retailers on unorganized retailers with
special reference to Maharashtra state
http://www.iaeme.com/IJM/index.asp 7 [email protected]
Figure 2 Opinion of unorganised retailers in Maharashtra state as whole about the impact of
organised retailers on their business
Figure 3 Changes required in business strategies of Unorganised Retailers (in percentage)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
RESPONSE = 1
RESPONSE = 2
RESPONSE = 3
RESPONSE = 4
RESPONSE = 5
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
Lo
w c
ost
an
d g
oo
d q
ua
lity
Dis
co
un
t o
ffers
Sch
em
es
Ho
me d
eli
verly
Co
nvin
ien
t ti
min
g
Aft
er S
ale
s se
rvic
e
Ava
ila
bil
ity o
f va
rie
ties
Att
ra
cti
ve p
ack
ing
s
Bett
er d
isp
lay o
f it
em
s
So
dex
o c
ou
pen
s
Bra
nd
na
me
Pro
per q
ty o
f g
oo
ds
pro
per w
eig
hin
g
decrea
sin
g o
verh
ea
ds
qu
ali
ty w
ith
va
rie
ty
Ma
inta
in n
ea
tness
an
d c
lea
nli
ness
Pricing strategies Distribution
strategies
Promotion strategies Product strategies
Every Time Some Times Never
Swati Vijay
http://www.iaeme.com/IJM/index.asp 8 [email protected]
To stay competitive in changing environment all the unorganised retailers from all
the regions have expressed desire to bring changes in their business by following
methods: Adding space and infrastructure and furniture for proper display of items,
Adding new products in their business by keeping variety of items with proper quality
and quantity, Improving quality of service, Improving customer relationship, Giving
the facilities of different mode of payments.
Figure 4 Last three years Segment wise Year wise employment Organised Retail in
Maharashtra
Figure 5 Total Number of Employees Division wise – Year wise in organised retail
It is observed that there is increase in employment due to steady expansion of new
organised retail outlets in all segments. Liberalised Government policies and
regulations, increased FDI in organised retail sector is making it easy for retailers to
start new retail outlets at various places. There by increasing employment
opportunities in this sector.
0
500
1000
1500
2000
2500
3000
3500
Cloth Electronics and Home appliances
Food and Grocery
Gift and fashion jwellery
2012 - 2013
2011 - 2012
206
494
2214
598 512
2192
150
416
1944
532 426
1918
132 134
1840
486 398
1474
2012 - 2013 2011 - 2012 2010 - 2011
A study of Economical impact of Entry of organized retailers on unorganized retailers with
special reference to Maharashtra state
http://www.iaeme.com/IJM/index.asp 9 [email protected]
It is found out from the above graph that Pune and Mumbai region have highest
employment in all three years and the total number of employees are increasing every
year. While Amaravati and Aurangabad Divisions lagging due to less infrastructure
development.
Electronic and Home appliances segment has more employment compared to other
segments but require work force having technical skills.
Table 1 Segment wise and skill wise employees presently working
Product
Category Full Time
Skilled Part Time
Skilled
% of Part
time skilled
employees
Full Time
Un Skilled Part Time
Un Skilled
% of Part
time
Unskilled
employees
Cloth and Textile 1248 42 3.26% 168 78 31.71%
Electronics and
Home appliances 832 22 2.58% 176 52 22.81%
Food and Grocery 2644 44 1.64% 298 128 30.05%
Books, Music &
Gifts 292 0 0.00% 66 26 28.26%
It is very clear from the table that maximum Full time skilled employees are
working in Food and Grocery segment and maximum part time unskilled employees
are working in cloth and textile segment. Over all in all the segments percentage of
employees working as part time skilled is minimum Books, Music and Gift segment
has less number of employees working compared to other segments
Figure 6 Availability of requirements of personals in various sub sectors of organised retail
sector
Sales has maximum requirement even if it is having highest trained persons
available. Customer care, Infrastructure, Technology has 4 to 7% requirements of
trained employees. Marketing and promotion has 14% requirement of employees.
Position and Skill requirement also changes due to Type of store, Types of customers
visiting the stores, Nature and price of product, Complexity and technical nature of
products
Infrastructure 6% Logistics
4% Store management 5%
Technology 5%
Sales 56%
Purchase 2%
Support System 1%
Marketing and Promotions
14%
Customer care 7%
Swati Vijay
http://www.iaeme.com/IJM/index.asp 10 [email protected]
Figure 7 Opinion of employees from organised retail sector
It is inferred from the above graph that while working with organised retailer
85.86% employees experience that there are more number of opportunities for
employment and 69.66% employees find promotion prospects. 83.11% employees
receive product or position specific training.
84.48% employees observes that there are regular increments in salary. 74.48% also
feel proper leave structure is followed.
Majority observes good work environment and work culture and find change in
availability of basic facilities provided to employees. They also observe change in life
style
Table 2 Comparison of Employment in Organised and Unorganised Retail sector Table
Employment Scenario in organised
retailers Employment Scenario in unorganised retailers
There is 15 to 20% increase in employment in
last three years in all levels of management in
organised retailers
Food and Grocery segment has maximum
employment opportunities followed by cloth
and textile industry.
The sector has observed 10 to 13 % of increase in
employment in last three years. Generally
employees joining the unorganized retail sector do
not leave their jobs due to minimal qualification
(High school or less).
Majority of organised retailers give regular
increments to employees. Increments are
based on performance
There is very less increase in the salary of
employee over last three years. Many times there
are no increments given. Variation in salaries are
found from region to region.
Majority of them have separate HR
department.
Employees performance is appraised through
proper appraisal procedures.. Majority
retailers give Bonus & extra allowances and
provident fund and increment
Majority of employees in this sector do not get
Provident Fund, Health allowance and other
allowances. Many employees are not sure about
increments. Employees generally receive Bonus of
10 to 15% of their salary during festival time once
in a year. There is no proper leave structure but
employees do get annual leave.
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00 Ans = 1
Ans= 2
Ans = 3
Ans = 4
Ans = 5
A study of Economical impact of Entry of organized retailers on unorganized retailers with
special reference to Maharashtra state
http://www.iaeme.com/IJM/index.asp 11 [email protected]
Figure 8 Region wise Percentage increase in number of persons working in unorganised
retailers
Mumbai and Pune regions have shown higher percentage increase in the years 2011-
12 and 2012-13. Other regions have shown average percentage increase 6% to 6.9%
in both the years. The figures are really significant to infer that there in increase in
number of persons working either as a family members or hired persons from out
side.
Intermediaries activities associated with organized retailers are more in the region
Mumbai, Pune, Aurangabad and Nagpur due to availability of more number of
organized retail outlets. Majority of intermediaries from all the segment feel increase
in employment. Measurable increase in employment is observed in Electronic and
Home appliances segment..
Seasonal fluctuations, discount schemes, offers on products and good shopping
experience increased number of customers visiting to organised retail outlet. This has
increased demand of products there by showing increased trends in local business
activities
Figure 9 Segment wise opinion of intermediaries receiving benefits due to organised retailers
(shown in percentage)
It is significant from the graph that Food and Grocery segment intermediaries
higher demand and increase in employment compare to other segments. Over all
Amravati Aurangabad Mumbai Nagpur Nashik Pune
6.90 5.88
9.68
6.45 5.88
8.57
3.57
6.25 6.90 6.90 6.25 6.06
% increase in no of persons working in the shop 2012-2013
% increase in no of persons working in the shop 2011-2012
Large demand and Efficiency
Reasonable prices
Threat of Competition
Increase in employement
Increased use of tecnology
83.33 83.33 75.00
91.67 100.00
91.67
75.00 83.33
91.67 100.00 100.00
83.33 83.33
100.00 91.67
75.00 66.67 66.67
83.33
66.67
Cloth Electronics & Home appliances Food and Grocery Books, Gifts
Swati Vijay
http://www.iaeme.com/IJM/index.asp 12 [email protected]
analysis states that majority of intermediaries from all the segments are receiving
benefits due to emergence of organised retailers. There is increase in economical local
activities like buying, selling, transporting, renting etc due to increase in number of
organised and unorganised retailers in all the segments in all the regions.
Impact on manufacturing industry
Figure 10 Impact on manufacturers.
It is pointed out from the above graph that 52.38% manufacturers receive training on
various aspects. Due to advance training and adoption of new technology 85.72 %
manufacturers experience reduction in wastages and 90.47% manufacturers sense
reduction in losses. This has helped 76.19% manufacturers to increase productivity
76.19% manufacturers feel increase in demand and 90.48% manufacturers sense
increase in profit. Due to the growth in the business 61.91 found increase in
employment. 71.43% manufacturers have increased investment in their production.
It is found out that 95.24% manufacturers have adopted better supply chain and
distribution channel and 71.43% manufacturers have started working on brand and
quality of products.
Almost all the manufacturers adopted better supply chain and distribution channel to
reach to customers with quality products hence they are working more on brands. The
overall discussion reveal that manufacturing activities are increasing basic economic
activities of local businesses such as buying, selling, investing, increase in
employment etc. So by getting associated with organised retailers there is upward
trend in local business activities.
Impact on customers
It is found out from the research work that reliability of products, brand name,
performance of sales person, quality product and service, price margin, offers and
discounts, parking facility, loyalty and membership cards, mode of payment, after
sales service, internet shopping, attractive schemes are few prime factors which attract
customers to organised retail stores. Due to lay out and ambience, skillful staff,
facilities available at organised retail stores, customers get quality buying experience.
0.00
20.00
40.00
60.00
80.00
ANS = 1
ANS = 2
ANS = 3
ANS = 4
ANS = 5
A study of Economical impact of Entry of organized retailers on unorganized retailers with
special reference to Maharashtra state
http://www.iaeme.com/IJM/index.asp 13 [email protected]
The customers prefer to buy from unorganised retail stores due to convenient
location, extended facility of home deliver, fresh stock, buying grocery items, credit
facility. Customer is able to bargain while buying products from unorganised retail
stores. Customers are satisfied with early opening and late closing of unorganised
retail stores. Customers are happy with honest dealing of unorganised retailer. But
they are dissatisfied with the lay out and ambience of store, knowledge of salesman,
neat and clean outlook of sales person. Customers do not find basic facilities, parking
facility at unorganised retail stores.
Notion of savings from organised retail
Figure 11 Region wise monthly savings from Organised Retail Outlets
The notion of savings done by consumer while purchasing depends on how much
money he/she spends monthly in organised retail stores. 30 to 35% customers in all
the regions observed that they are able to save Rs.500 to 1000/- per month of their
purchase. 32% to 40% customers experience Rs. 1000 to 3000/- savings from
organised retail stores. 15% to 18% customers observed savings of Rs. 3000 to 5000
while making purchases at organised retail stores. Very few countable customers who
purchase costly items like furniture or home appliances observed Rs. 5000 to 10000/-
savings.
FINDINGS AND RECOMMENDATIONS
After studying and analysing data the following conclusions are drawn. Impact on
unorganised retailers
There is gradual increase in monthly income of all unorganised retailers from all segments in all regions. It varies with the type of segments and life style
and standard of living in the regions. The monthly income from Mumbai and
Pune region is higher than other regions.
In spite of facing financial constraints, majority of unorganized retailers do not see Loss of sale, Reduction in sale, Reduction in their staff and loss of
customers. With the stringent competition around, unorganized retailers are
trying to change their Pricing, Distribution, Promotion and Product strategies
giving emphasize more on Quality with variety and customer satisfaction and
their retention.
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Rs. 0- 500 Rs. 500- 1000 Rs. 1000-3000
Rs. 3000-5000
Rs. 5000-10000
Per
cen
tage
of
cust
om
ers
Nagpur
Mumbai
Nashik
Aurangabad
Amravati
Pune
Swati Vijay
http://www.iaeme.com/IJM/index.asp 14 [email protected]
There are no rules and policies regarding recruiting the employees in unorganised retail sector. Bonus/ increment in salary is sole prerogative of the
owner. Majority of employees working in all the segments other than
electronic and home appliances segment are unskilled as they are recruited as
either helpers or technicians.
Employment in organised retail sector
It is observed that in every division of Maharashtra there is definite increase
in employment during last three years. Pune and Mumbai division has highest
employment compared to other divisions. Maximum Full time and part time
skilled employees are working in Food and Grocery segment.
Sales has maximum requirement even if it is having highest trained persons available.
Majority of organised retailers from all the segments follow proper HR practices.
Impact on manufacturing and local business activities
It is observed that job opportunities for all categories of jobs are available in Logistics, Warehouse and Core Production sub sectors in manufacturing
industry.
Majority of intermediaries found increase in employment due to increase in
business activities after getting associated with organised retailers.
Increase in economical local activities like buying, selling, transporting, renting etc due to increase in number of organised and unorganised retailers
in all the segments in all the regions.
Impact on customers
Many customers prefer more than one type of retail store format for buying their needs. Satisfaction factors considered by customers for buying at
organised retailers are skillful professional staff, every thing at one place,
Basic facilities, good parking facility, Quality product and service, variety in
product, methods of payment, attractive schemes , internet shopping and
effective complaint handling system
Satisfaction factors considered by customers for buying at unorganised
retailers are reliability of product, Fresh stock, home delivery, convenient
timimgs of store, easy product return policy, credit facility and bargaining
power.
Major Recommendations To stay competitive and retain customers, unorganised retailers should keep
quality products with more number of varieties with reasonable prices and also
announce promotional schemes for their business and make various types of
payment mode available to their customers.
The unorganised retailers should understand the importance of customer
relationship management, train their employees accordingly and adopt
innovative techniques to retain customers. They should give emphasis more on
neat and clean look of their workers and neatness and cleanliness of business
place.
They should also try to adopt technology in their business which will ensure proper weighing, supply of fresh products and proper billing and less wastages
A study of Economical impact of Entry of organized retailers on unorganized retailers with
special reference to Maharashtra state
http://www.iaeme.com/IJM/index.asp 15 [email protected]
of items. They should possess skills of accurate inventory management and
supply chain management to avoid various losses.
Unorganised retailers should extend all kinds of employment benefits to their employees and register themselves for paying taxes.
Government should ensure that the growth of unorganised retailers will take
place with the help and support of organised retailers. This will enhance local
business activities and economic activities in the region.
Organised retailers should open more outlets in Amravati and Aurangabad regions to enhance economic activities in these areas.
CONCLUSION
The Indian retail industry is expanding and diversifying across the country. The
economical impact is found out by analysing income and employment in both
organised, unorganised retailers and manufacturers. The trends in local business
activities is studied by carrying out year wise, segment wise and region wise analysis.
The entry of organized retailer will improve infrastructure, technology, supply chain
giving consumer experience of buying products at lower prices and employment
opportunities. At the end, the study also tries to understands various satisfaction
factors with respect to his buying at organised or unorganised retail stores, savings
from organised and unorganised retail outlets and their preference of buying
REFERENCES
[1] A T Kearney (2011), Retail Global Expansion: A portfolio of opportunities
Retrieved from http://www.atkearney.com/documents
[2] Bose, N., Singh, N. (2011, November 29), Key facts on India's retail sector,
FACTBOX, Reuters retrieved from http://www.reuters.com/
article/2011/02/25/india-retail-idUSSGE71O06Y20110225
[3] Clement, J., Kodimela P (2011), Consumer switching behavior in organized retail
stores: An Empirical Analysis , The International Journal’s Research Journal of
Social Sciences & Management, 1(6),12-24
[4] Coelho, F., Augusto, M., Lages L. F. (2011), Contextual factors and the creativity
of frontline employees: The mediating effects of role stress and intrinsic
motivation , Journal of Retailing, 87(1), 31-45
[5] Dubinsky, Alan, J., Skinner, Steven, J., (1984) Impact of job characteristics on
retail salespeople's reactions to their jobs ,Journal of Retailing, 60(2), 35-62.
[6] Economic Survey 2013: Small shops giving tough competition to organised
retailers, Economic Times, retrieved from http://articles.economictimes.
indiatimes.com/2013-02-27/news/37330790_1_multi-brand-foreign-retailers-
small-retailers
[7] Handa, V., Grover, N. (2012), Retail sector in India: Issues & challenges,
International journal of Multidisciplinary Research, 2(5), 244-264
[8] Janardan, M. (2014, January), Rethink Retail in 2014: Responsive is out Adptive
is in, Images Retail, 13(1), 26-28
[9] Joseph, M., Soundarajan, N., Gupta, M., Sahu, S. (May 2008) Impact of
Organised Retailing on the unorganized sector, Indian Council for Research on
International Economic Relations (ICRIER) Report retrieved from
http://www.icrier.org/pdf/Working_Paper222.pdf
Swati Vijay
http://www.iaeme.com/IJM/index.asp 16 [email protected]
[10] Kumar, P. (2013), Organised retail sector: Future. challenges and opportunities in
India, International Journal of Computing and Business Research, 4(1) retrieved
from http://www.researchmanuscripts.com/January2013/5.pdf
[11] Maheshwari, R. K. (2004), Indian infrastructure and economic growth , The
Asian Economic Review, 46(1), 195-203
[12] Maki, M., Kokko T. (2012), Customer participation in retail-focus on automated
services , Journal of Business and retail management research, 7(1), 94-105
[13] Manju, Malik (2012), A study on Customer’s satisfaction towards service quality
of organized retail stores in Haryana , Indian Journal of Marketing, 42(2), 51-60
[14] Mishra, M., Dash, U. (2008), Importance of retail service attributes: A study on
Indian Consumers, The ICFAI journal of Management Research, VII(2), 7-20.
[15] Mukherjee, A., Goyal, T. M. (2012), Employment Conditions in Organised and
Unorganised Retail: Implications for FDI Policy in India , Journal of Business
and retail management research, 6(2), 26
[16] Mukherjee, A., Satija, D., Goyal, T., Mantrala, M., Zou, M. (2011). Impact of
retail FDI policy on Indian consumers and the way forward, ICRIER Policy
Series (2011) Retrieved from http://icrier.org/pdf/Policy_Series_No_5.pdf
[17] Prabha Devi, P., Sellappan, R. (2009), Service Quality at Retail Stores-
Consumer’s Perception ,JK Journal of Management and Technology, 1(1) ,41-52
[18] Raut, M., Dash, S. (2011), The factors predicting buying behavior in organized
retailing: A study with Special reference to malls in Noida and Greater Noida ,
International Journal of Business and Management Tomorrow, 1(3) ,1-10
[19] Retail Industry Global Report – 2010 (2010) , An IMAP retail report retrieved
from http://www.imap.se/en/Industrirapporter
[20] Sahoo, C. K., Das, S. (2011), Employee Empowerment and Organisational
outcomes: The strategic integration ,Indian Journal of Training and Development,
41(4), 31-38
[21] Skill Development Landscape in India and implementing Quality Skills training
Report (August 2010) , FICCI, Retrieved from www.ficci.com/spdocument/
20073/imacs.pdf
[22] Singhal, A. (2010), Changing India, Changing Consumption, Changing
Consumers, Technopak Perspective, Technopak, 3, 2-10.
[23] Sorescu, A., Frambach, R., Singh, J., Rangaswamy, A., Bridges C. (2011),
Innovations in retail business models , Journal of Retailing, 87(1)
[24] Srivastava, A., Matta, M. (2012), Customer perception regarding purchase
behavior towards malls: A study of Noida and Ghaziabad, South Asian Journal of
Marketing & Management Research, 2(2), 170-179.
[25] The 2013 Global Retail Development Index, Global Retailer, Cautiously
Aggresssive or Aggressively cautious? (2013), A T Kearney Report, 1-29
retrieved from http://www.atkearney.in/
[26] V. Sujitha. Visual Merchandising - The Idiom of Smart Retailers. International
Journal of Management, 6(1), 2015, pp. 459–462.
[27] Vijay.R.Kulkarni, A Comparative Study of Customer Perceptions of Store
Atmospherics of Spencer’s Vs Reliance Fresh. International Journal of
Management, 3(2), 2012, pp. 370–380.
[28] Winning in India’s retail sector: Factors for success (2011), PwC Research
retrieved from https://list2.pwc.fr/assets/files/lettre_retail-and-consumer/
pwc_winning_in_india_retail_sector_1.pdf