1. It was observed from the study that, in traditional units, half of the selected units were owned and remaining half were rented and 94.44 per cent were maintained by single proprietor and remaining were partnership, whereas in modern units, cent per cent of the units were owned of which 40 per cent were maintained by sole proprietor, 40 per cent private limited and remaining co-operative.
2. The total recurring cost was much higher in modern units (Rs. 24326.74), as compared to traditional units of which a major part of Rs. 17866.80 (73.45%) was towards electricity charges, followed by other recurring costs. In traditional units it
was Rs. 7,247.22, of which monthly rent was the major cost (35.1%) followed by electricity and maintenance charges.
3. In traditional outlets there was existence of family labour which was not the case in modern units. It was found that the average labour employed permanently in modern units was much higher (135) than traditional outlets (3.41). No women labours were employed in traditional units.
4. In traditional retail outlets the type of packaging materials used for rice, wheat, tur, green gram, cashew and raisins was Food grade plastic and Pp kirana cover of 150 gauge strength and Plastic of 20 microns strength and of any strength to pack lesser quantities of upto 5-10 kg, HDPE of 20 microns strength was used to pack higher quantities of upto 25-50 kgs. Pickles were packed in Pp kirana cover and Plastic. Milk was packed at the production plant in Polythene films of 25-30 microns strength.
On the other hand, in modern outlets products like rice, wheat, tur, green gram, cashew and raisins were packed in HDPE, Plastic HDPE, Plastic FB and Plastic PNP. Where Plastic HDPE, Plastic FB and Plastic PNP were of 20 microns strength each and were used to pack lesser quantities of products ranging from 500 gm to 5 kg, HDPE was of 30 microns strength and was used to pack higher quantities like 25 kg and 50 kg. Milk was packed at the production plant in Polythene films of 46-55 microns for 200 ml and 500 ml and 55-60 microns for 1 litre. Modern retail outlets do not go for packaging of pickles, vermicelli and papad.
5. In traditional retail outlets, the price per kg of any product was less compared to the price per kg of the same product in modern outlets. Further, in traditional outlets it could be seen that there was lot of variation in price per kg of the products as the quantity goes on increasing. In modern outlets except the variations in some products, in all the products the price per kg decreases as the quantity increases.
6. Two types of purchasing patterns such as bulk and retail were followed by retailers for procuring packaging materials. In traditional outlets most of the retailers (61.1%) purchased the packaging materials in bulk where as in modern outlets cent per cent of the retailers purchased in bulk due to their multi outlet operations and organized form of retailing. Further, it could be seen that, majority of traditional retailers purchased from local market (55.5%) followed by, local factory and through dealers, where as in modern outlets equal number of them purchased from industry and local factory (42.9% each) followed by local market.
7. Three modes of purchase of packaging materials was observed in traditional outlets of which, most of the retailers (66.7%) brought on cash basis, 22.3 per cent on credit and 11 per cent on cash+credit. In modern outlets, cent per cent of the retailers purchased on credit basis. Here no retailer purchased on cash+credit basis.
8. The cost of packaging in retail outlets revealed that, in a traditional outlets, the cost per kg was highest for Pp kirana cover, followed by Food grade plastic and Plastic. In modern outlets cost per kg was highest for Plastic PNP, followed by Plastic FB and Plastic HDPE. In all these products, the costs incurred on packaging materials followed by labour charges for cleaning and packaging constitute the cost components. The cost component of milk was composed of only packaging material (polythene films) cost. The highest packaging cost attributed to the use of costly material in packaging, which is durable, attractive and printed information (which includes their trade mark and brand names) on it to attract the customers.
9. With respect to frequency of purchase, in traditional outlets, most of the retailers purchased the packaging materials once in a month and once in a week (33.3%), followed by once in 3 months, fortnightly intervals and so on, where as in modern outlets most of them prefer to purchase once in 3 months (71.4%), followed by once in a month.
10. In case of agreement regarding purchase of packaging materials, there was no agreement regarding the purchase of packaging materials by traditional retailers. In case of modern category, 2 units had contract arrangement for quality constituting 66.67 per cent and 1 unit prefers tender which constitutes 33.33 per cent. All these agreements exist in case of procurement of packaging materials for milk only.
11. The cost per kg of packaging materials in traditional outlets was highest for Food grade plastic (Rs. 144.71), followed by Polythene films (Rs. 143.61), Pp kirana cover (Rs. 104.72) and Plastic (Rs. 102.19). In modern outlets, the cost per kilogram was highest for Plastic HDPE (Rs. 135.5), followed by Plastic FB and Plastic PNP (Rs.
130) each and Polythene films (Rs. 110.34).
12. With respect to the opinion of retailers regarding purchase of packaging materials from a particular agency, in traditional outlets, most of the retailers opined of getting good quality packaging materials, followed by cut in margins and other factors. In case of modern retailers, cent per cent of them preferred to purchase from a particular agency due to good quality materials and cut in margins followed by other factors.
13. With regards to credit facilities given to consumers by retail outlets, traditional retailers give credit for a longer duration ranging from 26 days to 30 days on different products compared with modern retailers who gave half the number of days of credit as that of traditional retailers.
14. It was observed that, the quantity procured in traditional units was found to be high in milk (40666.67 litres), followed by rice (1086.67 kgs), wheat (630 kgs), tur (323.33 kgs), green gram (141.33 kgs), pickles (19 kgs), raisins (14.33 kgs), cashew (13 kg), vermicelli (6.5 kgs) and papad (6.33 kgs). In modern units quantity procured was found to be highest in milk (1795295.67 litres), followed by rice (2812.50 kgs), wheat (1775 kgs), tur (1075 kgs), green gram (87.50 kgs), cashew (45 kg) and raisins (37.50 kgs). In both the category procurement value was highest in milk at Rs 575333.33 in traditional unit and Rs. 23106618.67 in modern Units. In traditional outlets, the procurement value of milk accounted for 93.51 per cent, followed by rice (1.63%), whereas in modern outlets, milk accounted for 99.45 per cent, followed by rice (0.20%). The commodity which was procured the least in terms of value in traditional and modern outlets was vermicelli and greengram, respectively.
15. The average quantity sold by traditional units was found to be high in milk (40666.67 litres) since the quantity procured was also high in milk followed by rice (690 kgs), wheat (470 kgs), tur (256.67 kgs), green gram (128 kgs), pickles (15 kgs), cashew (11.27 kgs), raisins (10.67 kg), papad (5.67 kgs) and vermicelli (4.50 kgs). In modern units quantity sold was found to be highest in milk (1795295.67 litres) followed by rice (2812.50 kgs), wheat (1775 kgs), tur (1075 kgs), green gram (87.50 kgs), cashew (45 kg) and raisins (37.50 kgs). In both the category selling value was highest in milk at Rs 847333.33 in traditional unit and Rs. 35905913.33 in modern Units. In traditional outlets, the selling value of milk accounted for 95.16 per cent, followed by rice (1.5%), whereas in modern outlets, milk accounted for 99.53 per cent, followed by rice (0.16%). The least sold commodity in terms of value in traditional and modern outlets was vermicelli and greengram, respectively.
Further, it could be seen that, the average turnover during 1st week, for rest of the month and overall was Rs. 35057.56, Rs. 29744.44 and Rs. 30984.17 respectively in traditional outlets and Rs. 1212558.00, Rs. 1199509.00 and Rs. 1202554.00 respectively in modern outlets.
16. The results revealed that, in the traditional retail outlets most of the retailers took up cleaning and packaging in case of cereals, pulses and processed dry products followed by labelling for these products. In case of milk, cent per cent of the production plants went in for processing, chilling and packaging. In modern outlets, cent per cent of retailers took up cleaning, packaging, chemical treatment and labelling in cereals and pulses. In cashew and raisins cent per cent retailers take up packaging and labelling to maintain good relationship with the consumers by providing good quality products. In addition, it is very much necessary and the only way to compete with the conventional stores. On the other hand, these activities help in market segmentation with price differentiation. In case of milk cent per cent of the production plants went in for processing, chilling and packaging.
17. Cost of value addition due to processing, packaging and retailing was found to be high in modern retail outlets compared to traditional outlets. In traditional outlets the total cost of value addition ranged from Rs. 0.26 to Rs. 0.44 per kg/litre as the case
may be, for different products of which packaging occupied the highest cost followed by cleaning and labelling. The total cost was highest in milk compared to all the products at Rs. 0.73/litre of which packaging accounts for Rs. 0.44/litre followed by processing and chilling. In modern outlets the total cost of value addition ranged from Rs. 0.57 to Rs. 1.3 per kg/litre as the case may be, of which packaging occupied the highest cost followed by chemical treatment, cleaning and labelling.
18. It was observed that, in traditional outlets, the value added due to processing, packaging and retailing was highest in milk (42.12 per cent), followed by cashew (12.96 per cent), pickles (12.82 per cent), green gram (7.65 per cent), wheat (7.36 per cent),raisins (7.33 per cent), tur (6.33 per cent) and rice (2.48 per cent). In modern outlets, the value added was highest in case of raisins (60.44 per cent), followed by cashew (50.63 per cent), milk (46.93 per cent), green gram (45.52 per cent), tur (30.17 per cent), wheat (21.54 per cent) and rice (20.22 per cent) due to higher prices obtained and relatively lower percent of wastages. No value was added either by processing or packaging in case of vermicelli and papad in either traditional or modern outlet.
19. In traditional outlets an average of 0.56 women labours are required as against 1 men labour and 3.4 women labours in modern outlets to pack the products. The average total cost of labours in traditional and modern outlet is Rs. 661.11 and Rs. 6600.00 respectively.
20. The results on buying activities revealed that, in traditional outlets most of the retailers buy same quantity packaging materials every time, followed by the one who buy based on previous days/weeks/months sale of products but in modern outlets same number of retailers buy same quantity of materials every time in some products but in processed wet products more number of retailers buy based on previous days/weeks/months sale of products.
21. As revealed by the Table (4.24), in traditional outlet, 40 per cent of the retailers gave discount on the purchase of cereals, pulses, processed dry and wet products and ready to eat products and 6.67 per cent of the retailers offered gifts on all the products considered in the study. In modern outlets, cent per cent of the retailers offered gifts and 50 per cent gave discount on the purchase of cereals, pulse and processed dry and wet products.
22. The results on problems faced by the retailers in packaging revealed that, in traditional outlets, cent per cent of the retailers faced the problem of high price of products, followed by non availability of products (66.66%), under procurement of products category. In case of processing, 50 per cent of the retailers faced the problem of non availability of labour. In case of packaging, 38.88 per cent of the retailers faced the problem of high cost of packaging materials, followed by non-availability of good quality of packaging materials.
In modern retail outlets, cent per cent of the retailers faced the problem of low quantity, followed by non availability of products (80%), under procurement of products category. In case of processing, 20 per cent of the retailers faced the problem of non availability of labour and high cost of effective technology. In case of packaging, 40 per cent of the retailers faced the problem of high cost of packaging materials, followed by high transportation cost to buy from distant markets.
23. As the table (4.26) reveals, most of the retailers of traditional outlets thought that quality of the product, reasonable price, after sales service, satisfactory performance and so on are the reason for fast movement of their products in the market. In modern outlets equal number of retailers mentioned that quality of the product, satisfactory performance, after sales service, free home delivery are the main reasons followed by clean products, no wastage, exchange, correct qty and credit card+reasonable price for fast movement of their products in the market.
24. With regards to the problems faced by traditional and modern retail outlets; demand for new products, credit and bargains from the customers are as usual in any business activities. In traditional outlets, most of the retailers faced the problem of high demand for new products and repayment and average bargain and credit facility.
In modern retail outlets, there are not much problems except in few cases like average repayment. The demand for discounts and offers from the customers may be due to general tendency of the customers for discounts and offers; as the world is opened for general competition it has an impact on the business; every business has to undergo the prevailing rules and regulations and there is no quid pro quo hence the retailers felt these things as the problems.
25. It was observed that in traditional outlets most of the respondents interviewed were from the middle age group (25-50 yrs) and majority of them were female respondents and same is the case in modern outlets. With respect to the educational status of the consumers, it was found that both the consumers visiting the traditional and modern outlets were well educated. Most of them have completed their graduation followed by SSLC and PUC in traditional outlets and PG followed by graduation in modern outlets. With respect to occupation majority of them were working in office in both traditional and modern outlets. In traditional outlets majority of individuals belonged to income groups IG1 followed by IG4, IG2 and IG3 and in modern category most of the respondents were from IG1 followed by IG4, IG3 and IG2. With respect to the family type majority of them belonged to nuclear in both the categories and equal number of respondents were vegetarian and non vegetarian.
26. With respect to the frequency of purchase of products by consumers, majority of them purchase during the 1st week of the month followed by, as and when required and occasionally in both traditional and modern outlets.
27. The factors influencing preference for packed products by consumers reveals that, in traditional category most of them preferred packed products due to ready/timely availability and availability of quality products followed by reasonable price, cleaned products, improves the keeping quality, working women and convenience, product warranty and so on. In modern category the factors are availability of quality products followed by ready/timely availability, labeling (Composition of ingredients), consumer packs and many other factors.
28. The problems faced by the consumers of traditional retailers in the purchase of packaging materials reveals that the major problems faced were very high prices, unhygienic condition, no timely availability of product, no proper packaging and so on in different products. In modern outlets the problems faced by consumers were very high prices, no timely availability of product, unsatisfactory responses and services rendered at a retail outlet, no proper training to staff and so on. Non availability of trained employees was the key problem.
Policy Implications
1. Modern retail outlets were more particular about using quality packaging materials as compared to traditional outlets. Hence, the traditional units should also focus towards using quality packaging materials in order to increase their sales/turnover.
2. The per kg cost of packaging was very less for Plastic, used to pack lesser quantities and Plastic HDPE for higher quantities, hence the retailers can go in for these type of materials in order to decrease their packaging material costs, without compromising with the quality of the packaging materials.
3. Value addition due to processing and packaging was high in modern outlets compared to traditional outlets which results in high profits and the modern retail outlets were performing better than the traditional outlets. Hence, there is a lot of scope for the traditional retail business to shift from un-organized to organized form of retailing to cater to the changing needs of the modern customers.
4. The highest packaging cost which was the major cost component in cost of packaging is attributed to the use of costly material in packaging, which is durable, attractive and printed information (which includes their trade mark and brand names) on it to attract the customers. Hence retailers may go in for outsourcing of supplies in order to get quality packaging materials at reasonable price.
5. Retailers of both the units are facing problems like high cost of packaging materials, non availability of good quality packaging materials and non availability of required
type of packaging materials. Looking into the listed problems the retailers must learn to cope with the problems by discovering alternative ways as mentioned above to solve their problems.