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Grocery Retail: Revitalising Demand Supply Chain

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Consumers today have come a long way from bartering for daily household needs with livestock and goods to end-to-end modern and fast-paced grocery retailing. Today, the experience of dynamic and organised on-the-go retailing has taken its form that no one could ever imagine.

A decade ago, terms such as value-for-money, shelve-serve, immersive retail experience and click & collect, etc. wouldn’t ring the ear bells of a consumer picking up the grocery from his neighborhood kiranawala. However, with the change of tide, consumers are ready to spend time, money and sweat in yielding the maximum shopping experience even if it is for daily-need-goods. This satisfaction-seeking approach has now emerged as a pattern for analyzing consumer behavior and understanding of the rise of Grocery Retail & Revitalising Demand Supply chain.

Change in Market Trends

Groceries constitute a major share of most of the families’ budget/ income. According to the NSSO survey on Household Consumption of Various Goods and Services in India, an individual hailing from urban areas spends `2859 on food per month. This impressive figure of the year 2011-12 highlights the definite growth down the line till today. The quality of the diary, vegetables, and influencers such as packaging, heavy discounts affect buying behavior to an extent but more than that the emotional sentiments and consumer relationship which a consumer forms with Kiranawala moulds the retailer’s revenue.

According to a report by PWC, India has the highest consumption growth amongst the top 10 countries ranked by size of household final consumption expenditure (HFCE). It infers that Fast Moving Consumer Goods (FMCG)is moving faster today than they ever were. Impingent on the multi-trending ingredients, customised shopping units, and after-sales benefits, the overall shopping experience of the consumer has stepped up. The report further states that the consumption growth in India can be attributed to the democratic rise in affluence, which is not limited to just the metros or a limited income bracket.

Paradigm Shift

The offline mom-and-pop grocery stores have emerged as self-subsistent-bodies who are giving neck-to-neck competition to online grocery retail. Indeed, local Kirana stores have become a pool of revenue from online players such as Amazon, Flipkart and are aligning themselves as the last mile for online biggies. For instance, following the festive season Flipkart tied up with 27,000 Kirana stores across 700 cities to strengthen last-mile delivery, whereas Amazon, on the other hand,pumped in `172.5 crore in Amazon Retail India (Food Retail Business), as per the regulatory filings made to the Corporate Affairs Ministry. Now, online retail biggies have started realising the power of Mom-and-pop grocery stores and are gradually bringing them on the same page of their business model.

The oscillation of increasing demand and backing it up with supply can be observed at the grassroot level of a locality or a street of the village on one hand and in the vast theories of demand and supply on the other.

At the Global Retail Development Index, India surpassed China in 2017,resulting in organised retail market to grow at a CAGR of 32 percent and 63 percent CAGR over the next 5 years—brick and mortar and e-retail respectively—achieving a 24 percent market share by 2020. (Graphic presentation below.)

Win-Win-Win

It wouldn’t be wrong to say that Kirana stores off er a common point of contact where large buyers meet large sellers through the shelves of these neighborhood stores. Through this thought and organised retailing that one can see today at their local stores, the retail biggies are continually losing the steam to sell products in the name of their brand due to the same modern retailing experience provided by neighborhood Kirana stores these days. Besides, several other known benefits such as a system of credit, better assortment, discounts and loyalty programs, consumer engagement till the last mile, etc., give Kirana stores a head-start in the win- win race.

The Brand in Making

“I have seen impressive growth in demand for goods from residents of my locality since the year that went by. Moreover, I believe that the policy changes and the accessibility to a supply chain management service by Kirana King has made it possible to tap the untapped consumers,” said Akshay Vijay, a Kirana King Retail Network store owner. The consumer is smarter today than ever and meticulously decides his/her shopping move.

The philosophy of Kirana King is simple – the Kings of Kirana, the Kiranawalas are the ones who actually understand that consumer needs and behavior are the last mile consumer connect point. Our efforts as responsible businesses should be towards understanding the mindset of kiranawalas and leave a positive societal impact rather than just meeting revenue targets. Above all, it is the brand identity that is instilled in the store owners that makes them the true King.

The future lies in the streets and not at the supermarkets or malls. The market and consumption analysis reveals that mom &pop grocery stores are here to stay and will be taking modern grocery retail experience to altogether new heights.






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