In the war of brands, small retailers lose big time

LAHORE: Business is not as usual anymore for the small vendors as the brand stores have tipped the dynamics of retail marketing to their favour by capturing the most of the grocery and fashion textile segments in the metropolitan centers of the country.                                                      

In cities like Lahore, Karachi and Islamabad, besides multinational grocery and consumer goods stores, some city based retail outlets have also opened branches across the length and breadth of these cities. Small retailers in these cities are in a fix as every large fabric producer has opened hundreds of outlets of their brands throughout the country. These outlets not only sell cloth but also readymade ladies/children dresses. In addition, they also market shoes and artificial jewelry under their brand names. Some of them even sell garments made by imported fabric and stitched in Pakistan.

These brands do not deny their products to the traditional small retailers but they (the retailers) cannot compete with the branded shops that offer discounts to registered buyers and announce discount deals on regular basis. These branded outlets have even branched out outside Pakistan paving way for soft launch of Pakistani brands in Dubai, England, United States and Canada.

The ordinary retailers seemed to have been caught unawares by the changes that have been taking place in the marketing for the past five to six years. 

Initially, they pinned the slowdown on the economic recession; however, they soon realized their markets have been poached by the producers that have been supplying them the fabric.

When the multinational grocery and common item chains started opening a decade ago, the large grocery stores of the country expressed concerns fearing total loss of market to them.

They, however, survived the competition by improving their services, quality, and rates, while the retails shops operating in larger markets suffered as they could not match the periodic discounts offered by the multinational chains.

Only the shops established in residential neighborhoods pushed their businesses ahead without much problem. It is because the neighborhood consumers buy in smaller quantities and on credit because they are trusted by the shopkeepers. This facility is not available at retail outlets in larger markets.

Most of those retail outlets, which are unable to hold on, are paving way for brands owners, who are either buying or leasing those shops; whereas those, which are yet to find a buyer, are operating at loss or nominal profit.  

Similar phenomenon has been seen in sweet shops. In Lahore the ordinary sweetmeat/ confectionery shops are paving way for branded sweetmeat and grocery stores. Brands like Gourmet, Doce, and Cakes and Bakes have set up shops in every nook and corner of the city wiping out the Halwais (the traditional sweetmeat makers).

These changing trends are signs of a growing middle class in the cities. One thing that is common in these brands is they market products both for middle and lower middle segments of the society.

Retailers are still active in electronics as the number of branded shops for mobiles, televisions, and refrigerators is limited.

The brand owners in these segments are keeping their sales up by providing satisfactory after-sales services.