Store Attribute and Retail Format Choice

AbstractIn the last decade India has witnessed huge growth in terms of infrastructure, foreign brands, per capita income, organized retailing. Traditionally India only had the unorganized sector and more of mom and pop stores but with the changing economic scenario post 1991 era India is witnessing a retail boom. According to various reports there were about eleven million small neighborhood shops called kirana shops in India. They have been a constituent of the Indian shopping traditions for several decades and even today organized retailing (Corporate store) contributes just 2-3% of the total retail sale in the country. Indians are spending more than ever and are more open to organized retailing which used to be confined to only developed nations. In this paper we are studying the various factors/attributes which direct the people towards a Corporate store or a Kirana stores for grocery shopping.Keywords: Kirana store, Corporate store, Grocery.IntroductionCurrently India ranks no. 5 in as compared to no. 2 in 2008 in Global Retail Index2. Kearney2 also expects that Indian organized retail will grow 15%-20% in next 5 year and considers India as a potential market. The reason given by A. T. Kearney2 for this forecast is the strong macroeconomic, rapid urbanization and higher disposable income.Identifying this potential14 many Indian Inc. have also entered the retail sector as in fig. 1. Worldwide Inc is trying hard to enter into Indian Markets and have welcomed the move by Indian Government to increase the limit of FDI from 40% to 51 %. It was expected that the Indian retail market will grow reach 16% in 2012 from only 5.6% in 2007 but in reality India has not been able to isolate itself with the Global slowdown and Indian retail is likely to be around 10.4%15.According to KPMG15, footfalls as well as sales trend in retail are on a decline trend. Retailers are hard pressed for the liquidity.Although the Government has allowed 51 % limit to FDI in multiple branding but still India seems to be divided over the issue. Central Government faced a steep criticism from the opposition and unorganized sector. Some of the key issues of the unorganized retailers are that FDI will destroy their business and will lead to loss of jobs. On the contrary, Government is saying that FDI in retail will bring the much needed foreign exchange to India, people will be exposed to international products, services and standards which will pressurize our domestic retailers to provide the equivalent product and will lead to a healthy competition.Many researchers have tried to analyze the impact of FDI in retail on the local kirana store in India. Chackochen and Ramalingam6 and Bisen4 analyzed that FDI In retail will not destroy the jobs in the Indian market rather it will create more job opportunities. Wal-Mart20 figured out that internationally big retailers like Wal-Mart are responsible for the closure of the small traditional mom and pop store. In India also many small retailers raised their concern with the coming of big retailers like Big Bazaar but they soon realized that Indian market has space for both the organized as well as unorganized retailers. Even in the four metro cities of India, unorganized retail coexists with the organized sector.The purpose of this study is to gain meaningful insight into the grocery market in Delhi marketplace which is divided between traditional kirana store and the modem retail formats. To achieve our objective we tried to understand the various factors of retail format choice across two major formats traditional kirana store and the modem retail formats. In addition we have also used store attributes which also influence customer choice of retail format. The research provides valuable information about the specific store attributes which customers look before making a choice for a retail format.Review of LiteratureCustomer and Retail Choice: Many researchers have successfully established relation between the demographic and the retail choices. …