Impact of Malls on Small Shops and Hawkers
A small sample survey of the impact of malls on small shops and hawkers in Mumbai points to a decline in sales of groceries, fruits and vegetables, processed foods, garments, shoes, electronic and electrical goods in these retail outlets, ultimately threatening 50 per cent of them with closure or a major decline in business. Only 14 per cent of the sample of small shops and hawkers has so far been able to respond to the competitive threat of the malls with the institution of fresh sales promotion initiatives.
ANURADHA KALHAN
India is attempting to do in 10 years what took 25-30 years in other major global markets. However, to-date there is very little understanding of what the impact of corporate retail will be on the so-called unorganised retail sector and the agricultural sector (the country’s two largest sources of employment). This preliminary study is aimed at investigating the impact of malls on small shops and hawkers.

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rganised corporate retailing is poised to become the business of the decade in India. Retailing presently contributes about 10 per cent of India’s gross domestic product (GDP) and 6-7 per cent of employment. With some 15 million retail outlets, India has the highest retail density in the world. But only 4 per cent of these outlets are more than 500 sq ft in size and almost all are familyowned shops and establishments [Mukherjee and Patel 2005]. The value of organised retail is expected to grow 2.8 times in the coming four years to a Rs 1,000 billion industry, attracting many global retail chains like Wal-Mart, Tesco, and Carrefour [Outlook, October 16, 2006]. Foreign direct investment (FDI) up to 51 per cent in single brand retail was permitted last year and multi-brand retail is expected to open up to FDI soon. Meanwhile, Indian retail chains like Reliance Retail, Croma, Aditya Birla group, S Kumars, Shoppers’ Stop, Westside, Subhiksha, and Trinethra have all been consolidating their realty, brands, market shares and locations. Retail giants, the largest being Wal-Mart-Bharti, Reliance, AV Birla group and Future group (Pantaloon), plan to expand the share of organised retail from the current 3 per cent to approximately 15-20 per cent in four years by investing more than $ 25 billion (excluding real estate investment). Of the proposed investment, 60-65 per cent will go towards setting up the supply chain for food and groceries [CII – A T Kearney 2006]. What is particularly disquieting is the pace at which corporate retail chains are entering and expanding in the retail market, with analysts quoted as saying that

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 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 malls in Mulund. A questionnaire was administered to the shop owners or operators in the absence of the owners. The first part sought basic information on floor size, value of inventory and employment, both family and non-family. The second part of the questionnaire sought data on the impact on sales, profits, employment, working hours and high value customers lost, if any. This part of the questionnaire sought information from the respondents with reference to the period after the mall started operations in their area. The third part asked the respondents to attribute causes for the decline in sales, if any. The factors causing competitive disadvantage were listed – cost prices, operating costs, taxes, selling price, and any others. The respondents were also asked to rank the intensity of the threat they faced and whether their
Table 1: Distribution of Sample Shops/Hawkers by Floor Space
Sq Ft Hawkers ≤ 100 sq ft 100-200 200-300 300-400 500-600 More Total Number 30 14 25 22 10 6 4 112 Per Cent of Total 28 13 22 20 9 5 4 100

Methodology
We have a randomly chosen sample of 82 small retail shops and establishments (defined in terms of size, inventory and employment) and 30 hawkers within about one-kilometre radius of a mall in Greater Mumbai. Thirty of these small retail shops were in Lower Parel in the vicinity of a mall, 10 were near a new mall in Mumbai Central, and the remaining 42 were located in the vicinity of two malls in the BhandupMulund area. The hawkers were scattered over these areas, 16 in Lower Parel, 11 in Bhandup-Mulund and the remaining in Mumbai Central. In all, 112 responses were obtained. The retail outlets, including those that processed and sold food, were all run by owners or caretakers. Such retail outlets are referred to as “unorganised” retailers. A mall typically has a large real estate infrastructure spread over many thousand sq ft where a number of specialty retail chains and a supermarket coexist. Four malls, one each in Lower Parel and Bombay Central, and two in Mulund were chosen on the basis of the time they have been in operation. It is assumed that the older the mall, the more discernible and longlasting is the impact on nearby small shops and hawkers. The Phoenix Mall in Lower

Table 2: Distribution of Sample Shops/Hawkers by Value of Inventory
Rs Lakh ≤ 20 20 > ≤30 30 > ≤40 > 40

Table 7: Patronage of High Value Customers by the Sample Shops/Hawkers Due to Mall Operations
Patronage of High Value Customers Number of shops/ hawkers reporting Per cent of shops/ hawkers reporting Up Same Down

7 6

41 37

64 57

Table 8: Sales Decline of Shops/Hawkers by BusinessType as a Result of Mall Operations
Business Type Number Total Per Cent of of Shops/ Number of Shops/ Hawkers Shops/ Hawkers Showing Hawkers Showing Sales Decline Sales Decline 26 5 8 12 5 2 1 21 80 30 5 18 14 6 2 1 36 112 87 100 44 86 83 100 100 58 71

Grocery Vegetables, fruits Processing food Garments Shoes Electronics Electrical Others Total

Table 4: Distribution of Employment by Product Type in the Sample Shops/Hawkers
Business Type Shops/Hawker’s Family Stalls Members 30 5 18 14 6 2 1 36 112 62 7 23 32 12 2 1 57 196 Employees Average Number Average Number of Family Members of Employees Per Establishment Per Establishment 2 1 1 2 2 1 1 2 1.8 1 0 5 1 0 2 2 2 1.7

Grocery Vegetables, fruits Processing food Garments Shoes Electronics Electrical Others Total

32 0 83 15 2 4 2 56 194

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Economic and Political Weekly

June 2, 2007

closure, 34 per cent feared a major decline in business and 13 per cent expected a minor decline (Table 1, 3). So 50 per cent of the sample was expecting serious trouble. 82 per cent said that their children would not continue with the business. Yet only 11 per cent of the sample of 112 shops/ hawkers were involved in a campaign against the malls. It would be useful to compare the two areas where malls have been around for an adequate period of time, like in Parel and in the Bhandup/Mulund area. Nirmal Lifestyle is close to Bhandup, R Mall is in Mulund. Nirmal is two years old and R Mall is three years old. Phoenix Mall in Lower Parel is four years old. There were 53 respondents (retail shops and hawkers) in the Bhandup-Mulund area (1 km radius area around the two malls). In this area both malls are not more than three years old. There were 46 respondents from the Parel area where the mall is at least four years old. All respondents were asked to recall and evaluate their sales since the mall started in their respective area. The Bhandup and Lower Parel area responses have been summarised in Tables 14 and 15 respectively. In Lower Parel, 89 per cent of those who reported a drop in sales recorded a decline in sales in the last four years itself when the mall was in operation. Within this category of people who date their decline in sales over the last four years, 61 per cent said they experienced decline in the last two years, which may possibly indicate an intensification of impact over time. This can be viewed against 5.6 per cent of respondents reporting the drop to the period when the mall did not exist. In the Mulund/ Bhandup area, figures were respectively 93 per cent reporting a sales decline, and within this category, 75 per cent said the decline occurred in the last two years. The two malls are less than three years old. Only 4.5 per cent of the respondents in the area dated their decline in sales to the period when the malls did not exist. Hawkers are at the bottom of the retail pyramid, on the streets, readily available and handy for customers. They are a feature of all urban spaces globally. Municipal authorities have fought battles to evict them, but with little success. Street trading is one of the points of entry for migrants into the working life of the city; it is also one of the traditional supplementary activities of the families of the working poor, particularly for women [Lubell 1991]. The number of hawkers in Mumbai is Economic and Political Weekly

estimated at two and a half lakh [Government of India 2004]. But the number of unlicensed hawkers has been rising steadily since the Municipal Corporation in Mumbai has officially stopped issuing licences since 1978. Our sample of 30 hawkers was located within a safe distance of the malls in Parel and Bhandup-Mulund areas. Mall developers have been particularly hostile to hawkers. 72 per cent of them had no co-worker to help them, while about 21 per cent had another person, usually from the family, to help them. Hawkers, particularly women and children, are predictably at the receiving end now, facing increasing eviction drives and harassment around the malls. 41 per cent reported an increase in eviction drives,
Table 9: Sales Decline of Sample Shops/Hawkers by Shop Size as a Result of Mall Operations
Size of Shops/ Number of Total Per Cent Hawker’s Stalls Shops/ Number of Shops/ (sq feet) Hawkers of Shops/ Hawkers Showing Hawkers Showing Sales Sales Decline Decline Tiny < 100 100-200 200-300 300-400 400-500 500-600 >600 Total 23 11 13 18 9 4 2 80 31 14 25 22 10 6 4 112 74 35 52 82 90 67 50 71

24 per cent in harassment by agents of the malls, while 17 per cent reported an increase in bribes and hafta (Table 12). Mall promoters have joined the conflict to evict hawkers and revamp their precincts. 72 per cent of the hawkers were experiencing a fall in sales and all reported falling profits, which means falling income for them.

The Macro Picture
The competition for urban space between the organised and the informal retailer is becoming more intense. With rural-urban migration and general unemployment in the cities, the organised sector is unable to absorb labour in sufficient quantities. In the post-liberalisation
Table 12: Attitude of the Public Authority towards Sample Hawkers
‘Yes’ ‘No’ Per Cent of Total Responding ‘Yes’ 17 24 41

Hafta Harassment by agents of the malls Eviction Note:

5 7 12

24 22 17

All the 29 hawkers have been in the vicinity of a mall for two to four years.

Table 13: Extent of Threat Perceived by Sample Shops/Hawkers
Perception of Threat ‘Yes’ ‘No’ Per Cent of Total Responding ‘Yes’ 63 16 34 13

Table 10: Sales Decline of Sample Shops/Hawkers by Business Inventory Size as a Result of Mall Operations
Inventory (I) as on (Rs Lakh) Number of Total Per Cent Shops/ Number of Shops/ Hawkers of Shops/ Hawkers Showing Hawkers Showing Sales Sales Decline Decline 5 31 29 13 2 0 80 7 44 41 16 3 1 112 71 70 71 81 67 0 71 Feel threatened? Nature of threat: Closure Major decline Minor decline 71 18 38 15 41