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My reply to assumptions in this article
by Prof R K Gupta-India on Oct 14, 2007 03:56 PM   Permalink

1.Great stroy of booming retailing is illusion actually.Is market growing,or trade is just shifting from small shops to big chains?Then what is growing?Nothing.
2.Retailing will generate jobs.How? May be the jobs will shift from small stores again to big stores.But people working in small stores won't be employed by big chains talking of harvard and IIM MBAs who are really not needed in this line.So shifting of jobs or even causing unemployment is big possibility.
3.'Private labels will cut prices'.It is bull.The big stores will definitely reduce procurement and transportation cost but will pocket it with huge margins after they squeeze out small shops.They will squeeze both manufacturers and farmers and then consumers.They are not entering retailing for charity.It is cash business and once they set foot it is a cash cow.Keep milching both suppliers and consumers.See Nestle and McDonalds.
Indians are profiteers basically with little respect for law and society.Every one knows.They have already fixed huge salaries for CEOs in name of liberalisation.Which price has fallen here orUk or in Japan after liberalisation?None.
4.The retail space is very costly and these guys have jacked up property prices astronomically.This has effected residential property also and common man will be hardly left with any money to buy anything including their stuff
5.There is hardly any value or skill in selling toothpaste and sugar.This is already managed well by P&G and HLL type companies.



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Big retail's big blunders