Summer Project Report On Organized Retail Impact On Local Grocery PDF

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a summer project report for bba student...

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A STUDY ON IMPACT OF ORGANIZED RETAIL ON LOCAL GROCERY STORE IN BIRATNAGAR

BY Rashi Agrawal Exam Roll No: 16565/15 TU Regd. No: 7-2-3-35-2015

A Summer Project Report Submitted to Faculty of Management, Tribhuvan University in partial fulfillment of the requirements for the degree of

Bachelor of Business Administration

at the Mahendra Morang Ardasha Multiple Campus Tribhuvan University

Biratnagar May, 2019

STUDENT DECLARATION This is to certify that I have completed the summer project entitled “IMPACT OF ORGANIZED RETAIL ON LOCAL GROCERY STORES IN BIRATNAGAR” under the guidance of Mr. Sitaram Chaulagain in partial fulfillment of the requirement for the degree of Bachelors of Business Administration at Faculty of management, Tribhuvan University. This is my original work and I have not submitted it earlier elsewhere.

Date: May, 2019

Signature: ____________ Name: Rashi Agrawal

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CERTIFICATE FROM THE SUPERVISIOR

This is to certify that the summer project entitled “IMPACT OF ORGANIZED RETAIL ON LOCAL GROCERY STORES IN BIRATANAGR” is an academic work done by Rashi Agrawal submitted in the partial fulfillment of the requirements for the degree of Bachelor of Business Administration at Faculty of Management, Tribhuvan University under my guidance and supervision. To the best of my knowledge, the information presented by him/her in the summer project report has not been submitted earlier.

______________________ Signature of the Supervisor Name: Mr Sitaram chamlagain Designation: Supervisor Date: May, 2019

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ACKNOWLEDGEMENT

This summer project work report has been prepared to fulfil partial requirement of the degree of Bachelor of Business Administration (BBA). I would like to express my sincere thanks to my respectable teacher and supervisor Mr Sitaram Chamlagain who have provided her valuable suggestions in the preparation of this report without whose support and guidance, this report would not come in this form. My heartfelt thank you goes to Tribhuwan University, Faculty of management for including such a skill building work in our syllabus and Mahendra Morang Adarsh Multiple Campus for making this research work possible. Additionally, I acknowledge the contribution made by all those respondents who gave their time without remuneration to participate in this project. I thank them for their openness and willingness to be involved. Last but not the least I would like to give my vote of thanks to all my friends who inspired me for selecting the topic and help me in writing this report with creative and valuable suggestions and by providing necessary data.

Thank you.

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Table of Contents STUDENT DECLARATION................................................................................................ii CERTIFICATE FROM THE SUPERVISIOR......................................................................iii ACKNOWLEDGEMENT....................................................................................................iv Table of Contents...................................................................................................................v List of Tables........................................................................................................................vii List of Figures.....................................................................................................................viii Executive Summary..............................................................................................................ix CHAPTER I...........................................................................................................................1 INTRODUCTION..................................................................................................................1 1.1 Context Information.....................................................................................................1 1.2 Purpose of the Study.....................................................................................................1 1.3 Significance of the Study..............................................................................................2 1.4 Review of Literature.....................................................................................................2 1.5 Research Method used for Data Collection and Analysis............................................3 1.5.1 Nature of Research:...............................................................................................4 1.5.2 Sample Selection....................................................................................................4 1.5.3 Data Collection......................................................................................................4 1.5.4 Sampling Plan........................................................................................................4 1.5.5 Data Analysis and Interpretation............................................................................5 CHAPTER II..........................................................................................................................6 DATA PRESENTATION AND ANALYSIS..........................................................................6 2.1 Organization Profile/ Respondent Profile.....................................................................6 2.1.1 Organization Profile...............................................................................................6 2.2 Data Analysis and Data Presentation..........................................................................14 2.2.3. SWOT Analysis......................................................................................................27 2.4 Finding and Discussions.........................................................................................................28

CHAPTER III.......................................................................................................................29 CONCLUSION AND ACTION IMPLICATION................................................................29 3.1 Conclusions...........................................................................................................................29

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3.2 Action Implication..................................................................................................................30

REFERENCES......................................................................................................................... APPENDIX..............................................................................................................................

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List of Tables Table 2. 1: Products Sold by Grocery Stores.........................................................................7 Table 2. 2: Number of Employees..........................................................................................8

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Table 2. 3: Types of People Assisting in Shop.......................................................................9 Table 2. 4: Main Supplier Source.........................................................................................10 Table 2. 5: Margin in Grocery Stores...................................................................................11 Table 2. 6: Yearly Sales Turnover........................................................................................12 Table 2. 7: Reason for Entering into the Business...............................................................13 Table 2. 8: Provision of Bills after Sales..............................................................................14 Table 2. 9: Provision of Credit Facility...............................................................................15 Table 2. 10: Provision of Home Delivery............................................................................16 Table 2. 11: Social Responsibility........................................................................................17 Table 2. 12: Insecurity due to Opening of Supermarket......................................................18 Table 2. 13: Marketing Technique........................................................................................19 Table 2. 14: Average Buyer Patronage of Grocery Stores Before and After Commencement of Organized Retail..............................................................................................................20 Table 2. 15: Affected Base of Customer of Grocery Stores.................................................21 Table 2. 16: Change in Number of Employees....................................................................22 Table 2. 17: Impact on Organized Retail on Yearly Sales Turnover....................................23 Table 2. 18: Impact of Organized Retail on Yearly Profit....................................................24 Table 2. 19: Quantum of Sales before Commencement of Organized Retail......................25 Table 2. 20: Hope for Business Growth in Future................................................................26

List of Figures Figure 2. 1: Product Sold by Grocery Stores.........................................................................7 Figure 2. 2: Number of Employees........................................................................................8 Figure 2. 3: Types of People...................................................................................................9 viii

Figure 2. 4: Main Supplier Source.......................................................................................10 Figure 2. 5: Profit Margin of Grocery Stores.......................................................................11 Figure 2. 6: Yearly Sales Turnover.......................................................................................12 Figure 2. 7: Reason for Entry into the Business...................................................................13 Figure 2. 8: Provision of Bills after Sales............................................................................14 Figure 2. 9: Provision of Credit Facility..............................................................................15 Figure 2. 10: Provision of Home Delivery...........................................................................16 Figure 2. 11: Social Responsibility......................................................................................17 Figure 2. 12: Insecurity due to Opening of Supermarket.....................................................18 Figure 2. 13: Marketing Technique......................................................................................19 Figure 2. 14: Average Buyer Patronage of Grocery Stores Before and After Commencement of Organized Retail...................................................................................20 Figure 2. 15: Affected Base of Customer of Grocery Stores...............................................21 Figure 2. 16: Change in Number of Employees...................................................................22 Figure 2. 17: Impact of Organized Retail on Yearly Sales Turnover...................................23 Figure 2. 18: Impact of Organized Retail on Yearly Profit..................................................24 Figure 2. 19: Quantum of Sales Volume before Commencement of Organized Retail.......25 Figure 2. 20: Hope for Business Growth in Future..............................................................26

Executive Summary Malls, supermarket and supermarkets are growing rapidly adopting aggressive strategies to attract customers. These strategies in turn affect the existing small players. The. Purpose of this paper is to analysis the impact of new retail formats on traditional/ unorganized retailer’s strategies. The research investigates the impact of organized retailer’s strategies ix

in traditional stores. The main purpose is to study the impact of organized retailers on the sales volume and profit of grocery stores. The paper also study the attitude of kirana stores toward organized retailers and problems faced by kirana stores while operating in Biratnagar market. The population of the study is all the active unorganized retail outlets of Biratnagar. Convenience sampling method is used to select the sample. Altogether sample of 25 respondents are taken for the study. 26 different related questions are made and distributed to the respondent who are the owners of the grocery stores. . The collected data are analysed by using descriptive and analytical research design methods. The data are presented using table, pie-chart and bar diagram which are generated by using Microsoft Excel. At the end of data presentation, SWOT Analysis of overall findings is done. As the conclusion, the study shows, that the average daily buyer patronage of grocery store has been decreased after the commencement of organized retail. The upper class customer base of grocery stores is highly affected after the commencement of organized retail in Biratnagar. There is no change in number of employees after the commencement of super organized retail. The majority of the grocery stores have faced decrease in yearly sales after the commencement of organized retail in Biratnagar. The profit of majority of grocery stores owners have been decreased after the commencement of organized retail. There was an increasing trend of sales before commencement of organized retail in Biratnagar but after the commencement of organized retail there is decreasing trend of sales. In the study it is found that majority of the grocery stores owners are unsure about the growth of their store.

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CHAPTER I INTRODUCTION

1.1 Context Information Retail industry in Nepal is at crossroads. It has emerged as one of the most dynamic and fast pace industry with several player entering in the market. FMGC business in Nepal is growing by 15 to 17 percent. Retail sector in Nepal is dominated by unorganized player i.e. Kirana Stores, and even today’s time of modern super market and hyper market, customers are buying product from kirana stores but the frequency of purchase from kirana stores is going down day by day. Today a customer does not only simply buys product, they look for variety, best quality product at lowest possible price and convenience in purchase. Organized retail out-competes traditional retail on prices, variety and quality and offer greater convenience. At a time when traditional kirana stores are floundering, department stores have emerged as the shopper’s choice in Biratnagar and their business is booming. Department stores like Bhatbhateni, Nepal Bazaar have come into operation and their customer number are increasing daily. The growth in customers preferring to shop at department stores has encouraged new players to make their foray in the Biratnagar market. Even though the Nepalese retail industry is dominated by kirana stores, the shares of organized retailing should not be undermined. It is slowly and steadily growing over the years and emerges as a force to reckon with in the days to come. There has been a shift in the preference of customer from unorganized to organized stores. The study is undertaken by researcher in Biratnagar to evaluate the effects of organized retailing on kirana stores. The study focuses on the effect like revenues, profit, and customer footfall and closure rate of kirana stores in the neighbourhood area of organized retailer. The research is done on this area to have clear understanding of what impact will organized retail have on kirana stores and have deeper insight into concerned issue and strategies to deal with it. 1.2 Purpose of the Study 

To analyse the impact of supermarket on the sales volume of kirana srores. 1

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To analyse the impact of supermarket on the profit of kirana stores.

1.3 Significance of the Study The report can be referred by students to understand the impact of modern retail on kirana stores. Kirana stores owner can also refer this report to get an idea that how modern retailers are pulling crowd for them and most importantly, what they can do to retain their customers, providing service and better customer satisfaction so that customer should not come to them only for small purchase but also for bulk purchase. This report can be used by government organization and other institution to understand how kirana stores are fighting with big retailers and what steps they need to take in helping kirana stores to fight with modern retailers. 1.4 Review of Literature Brennan and Lundster (2000) investigate the impact of large discount stores on small US towns and observed that consumers shop at discount stores for price discounts and variety and visit specialty stores for unique items. Broadbridge and Calderwood (2002) inferred that, survival of traditional stores from the increased competition from large organized retail stores greatly depends on commitment and willingness of traditional retailer to meet the local community needs. Radhakrishnan (2004) concludes that the most affected stores with the entry of organized retail stores are: Small stores with small store area, less sales volume, few employee strength and isolated stores that does not have collaboration with other stores. Anuradha Kalhan (2007) pointed out that malls have reduced the sales of small store and street hawkers in Mumbai. There is a steep decline in sale of fruits, vegetables, processed food, groceries, garments, electronic goods in these stores resulting fifty percent of them with closure or decline in business. Vijayraghavan and Ramasurya (2007) observed that, despite having dominance in the Indian retail market, traditional retailers are lagging behind organized retailers in terms of variety and range and losing sales volumes in several parts of the country.

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Thakkar and Bhatt (2007) felt that growing concerns over the loss of jobs and livelihood in unorganized sector forced corporate retailers like Bharti Wal-Mart and Reliance to invite small traders and individuals to become franchisees on a profit sharing model. Singh R.K. and Tripathi, A.P. (2008) identified that malls in Delhi and NCR have affected small stores, but stores in posh areas and Inner Street were less affected. Joseph Mathew et.al. (2008) found that unorganized retailers witnessed a decline in sales and profit in the early years of the entry of organized retailers. There was no evidence of a decline in overall employment in the unorganized sector. The adverse impact, however, dwindles over a period. The study shows consumers and farmers are mostly benefitted from organized retailing. Paromita Goswami and Mridula S Mishra (2009) suggested that, all kirana stores need to have a critical evaluation of their strength and weaknesses and to modernize their stores with immediate effect in order to survive. .Kokatnur, Shilpa S. (2009) revealed that traditional retailers are severely affected by lapses in service and promotion strategies and need to redesign their business models. Paromita Goswami (2009) concluded that, kirana stores should upgrade their store and perform well in terms of customers need satisfaction in order to survive. Deepak Devagan and Mandeep Kaur (2010) emphasized that malls in small cities can dislodge the small stores and eroding their customer base. Shalla, S.A. and Mehta, M.S. (2013) reported that shopping malls have a positive impact on unorganized retail outlets in terms of sales and profits and there is some merit in allowing FDI in retail sector in Jammu & Kashmir. Hamil and Priyadharshini (2014) investigated the impact of Supermarkets on unorganized retail stores in Tirunelveli. Major impacts are found to be reduction in sales volume, reduction in profit and loyal customer base. 1.5 Research Method used for Data Collection and Analysis The present chapter describes the research methodology of the study. The research has been done grocery stores...