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Impact of Malls on Parel is at least four years old, the Mulund

malls are less than three years old but more


than one year old, and the Bombay Central

Small Shops and Hawkers one was 3/4 months old at the time of our
survey. Shops in both Mulund and Bhandup
within a one-kilometre radius had been
surveyed in assessing the impact of the two
A small sample survey of the impact of malls on small shops and malls in Mulund.
hawkers in Mumbai points to a decline in sales of groceries, A questionnaire was administered to the
shop owners or operators in the absence
fruits and vegetables, processed foods, garments, shoes, electronic of the owners. The first part sought basic
and electrical goods in these retail outlets, ultimately threatening information on floor size, value of inven-
50 per cent of them with closure or a major decline in business. tory and employment, both family and
Only 14 per cent of the sample of small shops and hawkers has so non-family. The second part of the ques-
far been able to respond to the competitive threat of the malls tionnaire sought data on the impact on
sales, profits, employment, working hours
with the institution of fresh sales promotion initiatives. and high value customers lost, if any. This
part of the questionnaire sought informa-
ANURADHA KALHAN India is attempting to do in 10 years what tion from the respondents with reference
took 25-30 years in other major global to the period after the mall started opera-

O
rganised corporate retailing is markets. However, to-date there is very tions in their area. The third part asked the
poised to become the business of little understanding of what the impact of respondents to attribute causes for the
the decade in India. Retailing corporate retail will be on the so-called decline in sales, if any. The factors causing
presently contributes about 10 per cent of unorganised retail sector and the agricul- competitive disadvantage were listed –
India’s gross domestic product (GDP) and tural sector (the country’s two largest cost prices, operating costs, taxes, selling
6-7 per cent of employment. With some sources of employment). This preliminary price, and any others. The respondents
15 million retail outlets, India has the study is aimed at investigating the impact were also asked to rank the intensity of
highest retail density in the world. But only of malls on small shops and hawkers. the threat they faced and whether their
4 per cent of these outlets are more than
500 sq ft in size and almost all are family- Methodology Table 1: Distribution of Sample
owned shops and establishments Shops/Hawkers by Floor Space
[Mukherjee and Patel 2005]. The value of We have a randomly chosen sample of Sq Ft Number Per Cent of Total
organised retail is expected to grow 2.8 82 small retail shops and establishments
Hawkers 30 28
times in the coming four years to a Rs 1,000 (defined in terms of size, inventory and ≤ 100 sq ft 14 13
billion industry, attracting many global employment) and 30 hawkers within about 100-200 25 22
retail chains like Wal-Mart, Tesco, and one-kilometre radius of a mall in Greater 200-300 22 20
Carrefour [Outlook, October 16, 2006]. Mumbai. Thirty of these small retail shops 300-400 10 9
500-600 6 5
Foreign direct investment (FDI) up to 51 were in Lower Parel in the vicinity of a More 4 4
per cent in single brand retail was permit- mall, 10 were near a new mall in Mumbai Total 112 100
ted last year and multi-brand retail is Central, and the remaining 42 were located
expected to open up to FDI soon. in the vicinity of two malls in the Bhandup- Table 2: Distribution of Sample
Meanwhile, Indian retail chains like Mulund area. The hawkers were scattered Shops/Hawkers by Value of Inventory
Reliance Retail, Croma, Aditya Birla group, over these areas, 16 in Lower Parel, 11 in Rs Lakh Number of Per Cent
S Kumars, Shoppers’ Stop, Westside, Bhandup-Mulund and the remaining in Shops/Hawkers of Total
Subhiksha, and Trinethra have all been Mumbai Central. In all, 112 responses <1 7 6
consolidating their realty, brands, market were obtained. The retail outlets, including 1-5 44 39
shares and locations. Retail giants, the those that processed and sold food, were 5-10 41 37
largest being Wal-Mart-Bharti, Reliance, all run by owners or caretakers. Such retail 10-20 16 14
20-50 3 3
AV Birla group and Future group (Pan- outlets are referred to as “unorganised” More than 50 1 1
taloon), plan to expand the share of retailers. Total 112 100
organised retail from the current 3 per cent A mall typically has a large real estate
to approximately 15-20 per cent in four infrastructure spread over many thousand Table 3: Pattern of Employment in
years by investing more than $ 25 billion sq ft where a number of specialty retail Sample Shops/Hawkers’ Stalls
(excluding real estate investment). Of the chains and a supermarket coexist. Four Number of Per Cent
proposed investment, 60-65 per cent will malls, one each in Lower Parel and Bombay Shops/Hawkers of Total
go towards setting up the supply chain for Central, and two in Mulund were chosen Stalls
food and groceries [CII – A T Kearney on the basis of the time they have been Self-employed family
2006]. What is particularly disquieting is in operation. It is assumed that the older members only 67 60
the pace at which corporate retail chains the mall, the more discernible and long- Family members and
are entering and expanding in the retail lasting is the impact on nearby small shops employees 45 40
Total 112 100
market, with analysts quoted as saying that and hawkers. The Phoenix Mall in Lower

Economic and Political Weekly June 2, 2007 2063


children would continue operating the shop. in employment so far. This reflects the Table 5: Summary of Sales Performance
since the Start of Mall Operations
Finally, a special section for hawkers asked family basis of the sector where a decline
them if bribe payments, eviction drives in sales is not matched by retrenchment Sales Level Number of Per Cent
and harassment by agents of malls had but results in shrinking earnings per head. Shops/Hawkers of Total
increased. The survey involved three If the downward pressures continue to Remained the same 20 18
investigators and took 10 days. intensify, some more retrenchments may Increased 12 11
Declined 80 71
occur; however, closures seem immanent.
Total 112 100
Survey Results Sales decline is evenly distributed by
value of inventory up to 25 lakhs (Table 10).
The survey results are presented in Tables The decline in sales has most frequently Table 6: Extent of Decline in Sales of
1 to 13. If we exclude the hawkers who impacted larger shops in the size range of Sample Shops/Hawkers since the Start
of Mall Operations
have no shop floor area, then 52 per cent 400-500 sq ft and 300-400 sq ft and least
of the sample represents shops and estab- commonly the size range of 100-200 sq ft Sales Decline Number Per Cent
(Per Cent) of Shops/ of
lishments less than 300 sq ft in size (Table 9). But the less than 100 sq ft size Hawkers Total
(Table 1). The most frequent shops in the shops are also frequently affected (Table 9). Stalls
sample are shops less than 200 sq ft Seventy-one per cent of the sample re-
≤10 23 22.5
(Table 1). 82 per cent of the shops had an ported a sales decline, but only 14 per cent 10 > ≤ 20 28 27.5
inventory of less than Rs 10 lakh (Table 2). reported some new sales promotion ini- 20 > ≤30 23 22.5
60 per cent had no employees other than tiatives, due perhaps to the low capital 30 > ≤40 23 22.5
> 40 5 5
family members (Table 3). The average base, low profit margins and poor avail-
102 100
employment per shop was 3.5 persons; ability of skilled manpower. Tele orders,
the most frequent type of shop had two home delivery and sales on credit were the
family members manning operations. So main types of new initiatives. Nearly all Table 7: Patronage of High Value
the sample was largely composed of the of them did not advertise at all. However, Customers by the Sample
Shops/Hawkers Due to Mall Operations
family-owned small shop. the shops particularly in Parel, for ex-
71 per cent of the respondents reported ample, suffered from a shortage of man- Patronage of High Up Same Down
Value Customers
falling sales (Table 5). In only 18 per cent power and capital, a result of a narrow and
of the shops/hawkers were the sales un- deteriorating working capital base. Parel Number of shops/
affected by the large retail chain malls. is particularly badly affected because of hawkers reporting 7 41 64
Per cent of shops/
Only 11 per cent reported an increase in the loss of high value customers like mill hawkers reporting 6 37 57
sales (Table 5). These were shops offering workers. As the mills closed down one
products and services not available in the after another the shops and eating places
malls, e g, stationery, photocopying facili- lost their clients. The new real estate Table 8: Sales Decline of Shops/Hawkers
ties, courier services, mobile phone and development in the area has brought cor- by BusinessType as a Result
of Mall Operations
computer accessories. Some eateries close porate offices, and with these a new class
to the malls reported an increase in sales of people whose preference patterns and Business Type Number Total Per Cent of
due to patronage of the mall employees. needs are unfamiliar. Despite the falling of Shops/ Number of Shops/
Hawkers Shops/ Hawkers
Most frequently shops reported a 20 per sales, 96 per cent of the retailers have not Showing Hawkers Showing
cent fall in sales (Table 6) but the intensity increased their working hours. The main Sales Decline Sales
varied by type of product. 64 per cent reason is once again an inability to afford Decline
reported a loss of high value customers additional hired help while the existing Grocery 26 30 87
(Table 7). Particularly important is the fact workers, mainly family members, are al- Vegetables, fruits 5 5 100
that the decline in sales is not limited to ready working for 11 to 14 hours per day. Processing food 8 18 44
Garments 12 14 86
grocery stores. Unbranded garment shops, Hence, there seemed little scope for ad- Shoes 5 6 83
shoe shops and electrical retailers, all seem ditional manhours or work intensification. Electronics 2 2 100
to have suffered (Table 8). This may lead Sixty-three per cent of the sample said that Electrical 1 1 100
to deeper questions regarding the chang- they felt threatened by the malls (Table 13). Others 21 36 58
Total 80 112 71
ing class composition and shifts in con- 16 per cent of them felt threatened with
sumption patterns in the vicinity of the
malls. It may also indicate the loss of real Table 4: Distribution of Employment by Product Type in the Sample Shops/Hawkers
purchasing power among the classes in the Business Type Shops/Hawker’s Family Employees Average Number Average Number
vicinity of the malls that used to patronise Stalls Members of Family Members of Employees
unbranded garment and shoe shops. Per Establishment Per Establishment
There have been cases of job loss in Grocery 30 62 32 2 1
some shops and establishments. In all nine Vegetables, fruits 5 7 0 1 0
retailers had fired their staff over the period Processing food 18 23 83 1 5
Garments 14 32 15 2 1
since the mall came up. In all 11 hired help Shoes 6 12 2 2 0
had been retrenched, which is less than 3 Electronics 2 2 4 1 2
per cent of the original workforce of 401 Electrical 1 1 2 1 2
Others 36 57 56 2 2
persons. Hence, despite the sales down-
Total 112 196 194 1.8 1.7
turn there has been no significant decline

2064 Economic and Political Weekly June 2, 2007


closure, 34 per cent feared a major decline estimated at two and a half lakh [Govern- 24 per cent in harassment by agents of the
in business and 13 per cent expected a ment of India 2004]. But the number of malls, while 17 per cent reported an in-
minor decline (Table 1, 3). So 50 per cent unlicensed hawkers has been rising steadily crease in bribes and hafta (Table 12). Mall
of the sample was expecting serious trouble. since the Municipal Corporation in Mumbai promoters have joined the conflict to evict
82 per cent said that their children would has officially stopped issuing licences since hawkers and revamp their precincts. 72 per
not continue with the business. Yet only 1978. Our sample of 30 hawkers was cent of the hawkers were experiencing a
11 per cent of the sample of 112 shops/ located within a safe distance of the malls fall in sales and all reported falling profits,
hawkers were involved in a campaign in Parel and Bhandup-Mulund areas. Mall which means falling income for them.
against the malls. developers have been particularly hostile
It would be useful to compare the two to hawkers. 72 per cent of them had no The Macro Picture
areas where malls have been around for co-worker to help them, while about 21
an adequate period of time, like in Parel per cent had another person, usually from The competition for urban space be-
and in the Bhandup/Mulund area. Nirmal the family, to help them. tween the organised and the informal
Lifestyle is close to Bhandup, R Mall is Hawkers, particularly women and chil- retailer is becoming more intense. With
in Mulund. Nirmal is two years old and dren, are predictably at the receiving end rural-urban migration and general unem-
R Mall is three years old. Phoenix Mall now, facing increasing eviction drives and ployment in the cities, the organised sector
in Lower Parel is four years old. There harassment around the malls. 41 per cent is unable to absorb labour in sufficient
were 53 respondents (retail shops and reported an increase in eviction drives, quantities. In the post-liberalisation
hawkers) in the Bhandup-Mulund area (1
km radius area around the two malls). In Table 9: Sales Decline of Sample Table 12: Attitude of the Public Authority
this area both malls are not more than three Shops/Hawkers by Shop Size as a Result towards Sample Hawkers
years old. There were 46 respondents from of Mall Operations
‘Yes’ ‘No’ Per Cent
the Parel area where the mall is at least Size of Shops/ Number of Total Per Cent of Total
four years old. All respondents were asked Hawker’s Stalls Shops/ Number of Shops/ Responding
to recall and evaluate their sales since the (sq feet) Hawkers of Shops/ Hawkers ‘Yes’
Showing Hawkers Showing
mall started in their respective area. The Sales Sales Hafta 5 24 17
Bhandup and Lower Parel area responses Decline Decline Harassment by agents
of the malls 7 22 24
have been summarised in Tables 14 and Tiny < 100 23 31 74 Eviction 12 17 41
15 respectively. 100-200 11 14 35
In Lower Parel, 89 per cent of those who 200-300 13 25 52 Note: All the 29 hawkers have been in the vicinity
300-400 18 22 82 of a mall for two to four years.
reported a drop in sales recorded a decline
400-500 9 10 90
in sales in the last four years itself when 500-600 4 6 67
the mall was in operation. Within this Table 13: Extent of Threat Perceived
>600 2 4 50
by Sample Shops/Hawkers
category of people who date their decline Total 80 112 71
in sales over the last four years, 61 per cent Perception of Threat ‘Yes’ ‘No’ Per Cent
of Total
said they experienced decline in the last Table 10: Sales Decline of Sample
Responding
two years, which may possibly indicate an Shops/Hawkers by Business Inventory
‘Yes’
Size as a Result of Mall Operations
intensification of impact over time. This
Feel threatened? 71 41 63
can be viewed against 5.6 per cent of Inventory (I) Number of Total Per Cent
Nature of threat:
as on Shops/ Number of Shops/
respondents reporting the drop to the period (Rs Lakh) Hawkers of Shops/ Hawkers
Closure 18 16
when the mall did not exist. In the Mulund/ Showing Hawkers Showing
Major decline 38 34
Minor decline 15 13
Bhandup area, figures were respectively Sales Sales
93 per cent reporting a sales decline, and Decline Decline
within this category, 75 per cent said the <I 5 7 71 Table 14: Summary of Sales Response
decline occurred in the last two years. The 1≤I<5 31 44 70 of Sample Shops/Hawkers since the
5 ≤ I < 10 29 41 71 Start of Mall Operations in Bhandup
two malls are less than three years old. 10 ≤ I < 25 13 16 81
Only 4.5 per cent of the respondents in the 25 ≤ I < 50 2 3 67 Numbers Per Cent
area dated their decline in sales to the I ≥ 50 0 1 0
Total 80 112 71 Decline in sales 44 83
period when the malls did not exist. No change in sales 8 15
Hawkers are at the bottom of the retail Increase in sales 1 2
pyramid, on the streets, readily available Table 11: Perception of Economic Total 53 100
Disadvantage vis-à-vis the Malls by the
and handy for customers. They are a fea- Sample Shops/Hawkers
ture of all urban spaces globally. Munici-
Compared to Malls ‘Yes’ ‘No’ Per Cent Table 15: Summary of Sales Response
pal authorities have fought battles to evict of Total of Sample Shops/Hawkers since the
them, but with little success. Street trading Responding Start of Mall Operations in Lower Parel
is one of the points of entry for migrants ‘Yes’
into the working life of the city; it is also Numbers Per Cent
Cost price is higher 24 88 21
one of the traditional supplementary ac- Transport and handling Decline in sales 28 60.9
tivities of the families of the working poor, cost is higher 9 103 8 No change in sales 9 19.6
Taxes are higher 58 54 52 Increase in sales 9 19.6
particularly for women [Lubell 1991]. The
Selling price is higher 26 86 23 Total 46 100
number of hawkers in Mumbai is

Economic and Political Weekly June 2, 2007 2065


period, the rate of growth of employment retailers, real estate developers, foreign country, with a control group of retailers
in the organised sector is barely 0.34 per players and manufacturers to unorganised as yet unaffected by organised retailing so
cent, lower than in the pre-liberalisation retailers spread over eight cities. The sample as to fully grasp the income and employ-
phase, and 3.6 times lower than the growth however had only 64 domestic unorganised ment impact. Also, as the supply chains
rate of employment in the informal sector retailers, 50 workers in the unorganised of the organised retailers develop, there is
in the same period. The informal sector retail, and no hawkers. Since this sector a need to study their impact on the welfare
grows with “passive proletarianisation”; the generates 6 to 7 per cent of total employ- of the ultimate producers and consumers
direct producers do not get into salaried ment in the economy, there is a need to whom they are supposed to benefit.
positions in the formal labour market [UN focus some research on the impact of Whatever international evidence we have
Human Settlements Programme 2003]. As organised retail and FDI in retail on this at hand indicates the dangers of monopoly
fresh migrants into the city join the reserve segment alone and the present study is capital in retailing for geographically dis-
army of the urban unemployed, incomes such an attempt. tributed small producers who are not in a
within the sector tend to drop [Roberts Will organised retail and related activity position to bargain for a fair price with
2004]. There is growing inequality within absorb the 40 million persons currently these bulk buyers. EPW
the informal sector as there is between the employed in the sector? An average mall
formal and informal. The weakest and the employs not more than 500 personnel Email: a_kalhan@rediffmail.com
smallest shoulders have to bear the heaviest directly in its various retail outlets.1 This
burden of informalisation [Breman 2003]. estimate excludes contract staff like house- Note
If the number of malls and retail chains keepers, loaders, security staff, etc. Mumbai
multiply, the sales impact on small shops is has about 27 malls now. Even if they were 1 We estimated this informally from conversations
likely to be intensified and earnings to increase to a thousand (so as to impact with mall employees and retail management
will keep falling till all these micro- unorganised retail in all areas) not more trainees.
accumulators become micro-subsistence than 50,000 would be employed directly.
seekers. Informal sector employment can be However, not less than five lakh people References
classified into at least two sub-categories are employed in the unorganised retailing Breman, Jan (2003): The Labouring Poor, Oxford
– an intermediate sector, which has a res- sector in Mumbai and they would in all University Press, New Delhi.
ervoir of micro-enterprises and the com- possibility be adversely affected. The CII – A T Kearney (2006): Retail In India – Getting
munity of the poor, residual and underem- dislodgement and unemployment effect Organised to Drive Growth, CII, New Delhi.
ployed labour [Davis 2006]. FDI in retail could be far greater than the employment Davis, Mike (2006): Planet of Slums, Verso, London.
and the growth of large corporate retail effect. Moreover, the shop floor staff in Government of India (2004): National Policy on
Urban Street Vendors, Department of Urban
trade will slowly erode the informal petty the malls have at least high school level Employment and Poverty Alleviation.
accumulators and increase the masses of qualifications, unlike their counterparts in Lubell, Harold (1991): The Informal Sector in the
the informal proletariat. the small shops, most of whom are barely 1980s and 1990s, Development Centre of the
The wage employment generated in literate and cannot be rehabilitated in OECD, Paris.
unorganised retail is informal employment. organised retail. Mukherjee A and Nishita Patel (2005): ‘FDI in
Informal employment, by its very defini- In the present study the focus has been Retail Sector India: A Report, by ICRIER and
Ministry of Consumer Affairs, Government of
tion, implies the absence of formal con- entirely on this segment and the impact on India’, Indian Council for Research on
tracts, rights and bargaining power. Hence, them is quite clearly damaging; only a few International Relations, New Delhi.
deteriorating business conditions here will (14 per cent) were able to upgrade their Roberts, Bryan (2004): ‘From Marginality to Social
increase petty exploitation and worsen the services or respond to the changed circum- Exclusion: From Laissz-Faire to Pervasive
lot of the wage earners. The informal stances. An escalation of competition from Engagement’, Latin American Research
Review, Vol 39, No 1, pp 196-97.
proletariat is also the most vulnerable; it corporate retail and FDI will thus hasten
United Nations Human Settlement Programme
is composed of unskilled, fresh immigrants their decline. (2003): The Challenge of Slums: Global Report
from rural areas and is least mobile of the There is a need to extend this research on Human Settlements, Earthscan Publications,
workforce. by using a larger sample across the London.
In a survey-based study [A Mukherjee
and N Patel 2005] sponsored by Indian
Council for Research on International For the Attention of Subscribers and
Economic Relations, the researchers make
a case for introduction of FDI in organised Subscription Agencies Outside India
retail over a period of five to six years to
It has come to our notice that a large number of subscriptions to the EPW from outside
boost the pace at which the sector is
growing. An organised retail sector, they the country together with the subscription payments sent to supposed subscription agents
suggest, will ensure better quality, prices in India have not been forwarded to us.
and service quality to the consumer. It will We wish to point out to subscribers and subscription agencies outside India that all
encourage investment in the supply chain, foreign subscriptions, together with the appropriate remittances, must be forwarded to
link local suppliers to large global markets us and not to unauthorised third parties in India.
and improve the quality of employment. We take no responsibility whatsoever in respect of subscriptions not registered with us.
Their sample of 391 respondents was spread
out over 14 types of participants in the MANAGER
retail sector, from domestic organised

2066 Economic and Political Weekly June 2, 2007