Shopping from organized or unorganized retail shop: does it really matter?

Indian food and grocery retailing has gone through significant transformations over the last few decades with a greater shift towards organized retailing. The shift gained momentum as a result of the rise of a new urban middle class along with the corresponding rapid growth of supermarkets and hypermarkets. Supermarkets that offer comfortable shopping experience with a wider variety of brands and products are dispelling a section of consumers away from the traditional retailers. Eventually, the survival of small retailers gets threatened and many of the market pundits predict the closure of many traditional shops in the near future. Though numerous studies were conducted on the consumer buying behaviors, majority of these studies focused either on traditional sector or on the organized sector. The studies which compare these two sectors are minimum and they lack clarity. The present study conducted a comparative analysis of traditional and organized grocery shops from the perspective of consumer buying behavior, considering Bangalore as the study location. The study administered a questionnaire to 425 respondents and the responses were collected. The results clearly revealed that there is a significant shift from kirana shops to supermarkets among the potental young and middle class consumers. At the same time, the day laborers and lower middle class consumers showed their preference to kirana shops. The analysis also revealed that the factors such as visual appeal, cleanliness, high quality of service, good customer management, freedom of choice, pricing and promotion, diversity in the product mix, etc. have significant impact on the consumers’ buying behaviors. The study also pointed out that many of the traditional shops are not aware of these factors, as a result of which they are lagging behind the organized shops in the competitive market. The study also inferred that organized shops utilize the factors that make a positive impact on the consumer's buying behavior to penetrate further into the market, which further threatens the small kirana vendors. In the light of these results, the study suggests an introspection on the factors and recommends to bring adequate makeovers, such as improving customer relationship, hygienity, diversity of products, etc. to attract and retain the customers.