Problems faced by the supermarketers – A case of Karnataka State (India)

The organized food retailing sector in India is on the verge of a boom and expected to undergo further change with prospective new domestic and global foreign entrants and the takeover or exit of some existing participants. Until 1990s, regulations prevented innovation and entrepreneurship in Indian retailing. Between 2000 to 2010 period, consumers in selected Indian cities have gradually begun to experience the quality, choice, convenience and benefits of organized retail industry. Karnataka state is experiencing rapid structural change with the emergence of huge retail firms with massive buying power and concomitantly concentration in the manufacturing sector. Hence, an effort was made in the state to understand the problems of organized food supermarketers, keeping in mind the viewpoint of investors in the food retailing industry. The research was conducted using primary data collected from the concerned authorities of the selected supermarketers across five cities in Karnataka to ascertain the major problems faced by them using Principal Component Analysis. The results revealed that the problems in the supermarket business were many but the variation were governed by a few dimensions. Non availability of trained employees, banks for sources of finance, demand for credit from the customers and bargain from the customers were the key problems among 38 variables considered. The study finally cautioned the food retailers risk a loss of image or even a loss of the customer if they do not learn to react effectively to the problems encountered in the process of the business, which may lead to failures.