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The truth about lies

Photo: A. Roy Choudhry

Beware! The date of import is printed and not the date of manufacture

The same breathless voice blared over the loudspeaker for the fifth time in five minutes. This time it screeched: “Dear customers, 50 per cent off on all branded shoes… hurry!” The previous announcement was about a massive discount on kitchenware; the one before that announced a discount on diamond jewellery; the one before was for saris; the one before that was for groceries.

Frenetic shoppers were darting across the shop floor in a daze, directed by the latest announcement in that breathless voice. The scene reminded me of my favourite childhood pastime – feeding fish in our neighbourhood well. The shoppers converged on a particular section of the store after each announcement, just the way the guppies converged on every crumb of bread I threw at them.

Raj Subramaniam a retail consultant who owns a Bangalore-based retail technology company stresses that there is nothing altruistic about the business model followed by discount stores. “They are surely not doing it because they love you,” he warns, and assures that such stores are making more profits than their competitors.

He explains that such stores have greater bargaining power with manufacturers, distributors and even farmers from whom they buy their stocks. Raj explains that these stores buy in large volumes and are often guilty of arm-twisting the sellers.

Sandip an executive with one such store reveals that it is all a game of margins; what the store loses on one product it makes up with the sale of another.

“We lull the customer into believing that he/she is in a discount paradise.” The advertising, the in-store banners, the regular announcements – they are all a barrage of tranquilisers that make the customer drop his guard, he says.

The customer gets carried away by a general feeling of euphoria and gets into the feeding frenzy. “It is in this state that the customer is likely to overlook the fact that not everything is discounted. They begin to just grab at all the things they want or think they want,” he observes.

Raj also says that these stores are likely to compromise slightly on the quality aspect. “Take rice or pulses. Your neighbourhood Kirana store owner is surely going to have stocks of a superior grade,” he points out. But the corporate store still offers a better deal if you take into consideration the price-quality ratio, he adds. “For instance if your neighbourhood grocer is selling a superior grade of rice for Rs. 22 a kilo, the corporate store will sell you the same breed of a marginally lower grade for Rs. 17 a kilo,” he illustrates and says, “Now the choice is yours.”

According to Raj the gravest danger lies is in buying imported packaged food at the discount stores. He points out that the quality standards in the West are very stringent. Indian merchants buy the stuff that has crossed the expiry date at throw-away prices and sell them to these discount stores.

“For the pretentious Indian middle class consumer it is a step forward in the value chain if he/she is seen buying a tin of foreign tuna or salad dressing,” he jibes. Warning against such purchases he says, “Most of these imported products just carry a label announcing the date of import and not the date of manufacture.”

Sandip does not deny Raj’s claim but says that it is not scary as he makes it out to be. “The stuff is okay by Indian standards,” he argues. However, Raj believes that these stores have had their reformative affect on the marketplace. “Remember the time you had to spend several minutes just trying to catch the attention of the neighbourhood grocer?” he asks. According to him, the Kirana store owner is a beast that has been tamed with all the competition that corporate stores are giving them. “Today the neighbourhood shopkeeper is willing to even deliver a packet of curds to your doorstep for free,’ he laughs.

Raj believes that the net effect is that corporate chains have sure put the consumer back on top of the food chain. “It is surely a consumer driven enterprise. The driver is sometimes taken for a ride but is in control for most part,” he says.

But what about the farmer, the manufacturer and the wholesaler? “Since when did the Indian middle class start bothering about that?” asks Raj.

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