Toll of the retail onslaught!

He has already decided he is closing down his shop!

This Sunday I went to meet an old friend who lives in the state capital. The state capital can be categorized as one of the tier two cities of the country. He has his own shop. It is big spacious showroom in the posh locality of the town. He deals consumer durables like television, refrigerator etc. He has the authorized dealership of some of the big companies in the durables sector.

We discussed several topics and one was the changing retail scenario in India. This is a topic that has caught my interest for some time now and I bought it up to get his views on it. But, I certainly was not prepared for what came up in the discussion.

In response to my observations. He told me that one of the big retail players (who is planning a chain of mega stores all across the country) had procured a place across the street, quite near his shop. A big shopping mall would come up there shortly. There has been news in the media that the company had tied up with many companies. There was some discussion about the discounts and incentives that were being planned for the customer. My friend dealt in the products of some of the manufacturers whose names had come up.

"It is a volume game" he said. "I know how the companies are willing to offer discounts and schemes if we can make bulk purchases - the larger the quantity the better deal we get. There is no chance for players like us to compete with a national chain on the volume front.” and went on to add that he was seriously considering about wind-up his business within the next one year.

I was completely taken aback.

Here I was carrying out an academic discussion on my blog (this blog) about adapting and gearing up to the new challenges and my friend was already facing the hard reality of the retail onslaught.

If this is the reaction of a big dealer, whom I have seen enjoying the pampering from his companies, I really wonder, what the smaller players are doing?