Who are more responsive in cutting prices: Modern retailers OR The Kiranas??

As all know prices are determined by supply and demand it is the retailers who are the key to decide the prices. Based on their demand prices vary in the marker.

It is indeed the modern retailers as not only do they have access to a huge supply pool but also to a customer base which would definitely come back to it given the range and choice available at a retailer.

On the other hand the good ol Kirana store still operates on an individual basis depending upon friendly householders near their place of business to generate revenue. And unlike the modern retailer they do not have the negotiating power or the money power to get stocks at a lower coast from the manufacturer because their monthly consumption itself is low.

This is where the modern retailer scores and especially if he has a chain of outlets, the buying defines his success. A centralised buying enables him to dictate the price at which he wants a certain product given the volumes.

I think modern retailers do have more buying capacity compared to the kirana stores & they are in position to provide better discounts.

As far is price cut is concrened retailers do biz on a large scale & they have a better capacity to cut prices as compared to kirana stores.

I agree with Sheetal Jadhav in her assessment. The only reason, this happens I believe is because of the huge purchasing power of a Big Bazaar or Reliance Mart. They can afford to pass on the discounts on its collective purchase to a customer who shops in their stores across the country. The flip side to this, is the huge overheads that pile up. Only Kishore Biyani seems to have deciphered the retailing mystery that other retail chains are still struggling over. Reliance and other retail brands aren't doing too well, I hear.

You are right and good logic, accept the views posted by Mr.Badri Ji.

The local Kirana store is at best passing benefit to select few......................... and there again not all stores pass the benefit.

Kirana Retailer, makes much more than most others in chain. 

Modern retailers buy bulk, TRY to ensure quality (of course not in Reliance stores), sell in a good environment (like a/c, etc.) and still they offer products especially food grains, veg, fruits, etc., at prices that are less or in some cases equal and almost equal to the kirana store or even the platform vendor. 

Whereas the Modern Retailer's overhead is more because he has to pay rent, pay electricity bill (more because of the A/c), pay well trained personnel, etc., etc., and these overheads are much more when compared to the kirana shop.

Of course, the PLATFORM vendor does not have any of these overheads (Except for paying "Haftas" to cops and local politicos, which is only a fraction of the amount when compared to the overheads of the modern retailer) facilities but still they sell at the same rate that the modern retailer sells.

I am talking mainly about "Heritage" and "Venkateswars" and "More" in Chennai who are good in price as well as customer care (help). Big Bazaar is also good from the price point. Reliance is the worst in all aspects.

NATURALLY MODERN RETAILERS FOR THE SIMPLE REASON THEIR LEVELS OF PROFIT IS HIGHER THAN THAT OF KIRANAS.

Thanks for referrral Ms.Sheetal.

I support this side... the retailers. 

Retailers have scope of cutting price the most..however, they dont cut as much as they are supposed to or can do.

Yes Sheetal it is the organised retailers who have an edge over the kirana or mom & pop storesd since they buy in bulk and it is these retailers are responsible for cutting prices. At the same time they have done so not because they love the consumers but to put their Store Brand in strong footing.

Then how the kirana & mom & pop stores manage? As a result of the above the MRP has been increased by the manufacturer and though the business has shurnk by volume this kirana & mom & pop store able to earn more profit.

To site an example two fruit juice at a organised retail store is available for Rs. 119/- for two 1 ltr. pack whearas one same fruit juice is being sold by the Kirana Store for Rs. 85/- for 1 ltr.

Keeping every thing in mind the response is automatic from the organised retail. So now if you see no body is responsive everybody is out to earn profit.

A 100% apple juice contains 17 to 18% concentrate rest is water so the manufacturer are also for their profit.

Modern bigger retailers really reduce or increase the prices depending on the market scenario. The bigger retailers cut the prices to an extent that it helps them to catch greater market share and thereby the kirana stores are also losing market share. So the bigger retailer can reduce the prices.

The retail stores have the capacity to reduce price and offer various schemes on purchase.

Modern retailers have a strong reach and power on account of their huge size. However, the important point is whether they really reduce or increase the prices depending on the market scenario. Kirana stores are having less power as they are small.

It is observed that the bigger the entity, the more difficult it becomes to respond to changes in the environment. If the market scenario changes, the bigger retailers cut the prices to an extent that it helps them to garner a greater market share and thereby the kirana stores are also losing market share even if they do reduce the price as it is not easy for them to reduce the price to equal the price cuts carried out by the big retailers.

Subsequently, the prices may be increased by the big retailers. The big retailers are in a position to influence a bigger population size and they also have a greater variety of products. The Kirana stores do not have this leverage. However, they have local and loyal customers who buy from them. Thus, their incentive to reduce prices stem more from a general concern to retain their customers for the future.

This price change is carried out more from the perspective of altering the market share and maybe also pass the benefit to the customer. However, underlying this price change is a hidden implication of changes in the market share that affect both the big retailers and the kirana stores equally.....

Sheetal u are right because retailers have more scope for price cut.

Yes that's absolutely right, Modern retailers are responsible for every time for influence in stack of foods. When there is less stock in market they will sell their stored products with the highest prices. So, I think they are the most responsible for increasing prices.

You are right Sheetal. They purchased it in bulk & ready to give part of their discount to us. Also we received all items in good condition & packing. Also they are giving some combination offers.

But the only thing is that there may be possibility of purchase of future requirement in advance, at every time but if you have proper list of items before going to retailer then it is useful.