Jun 23, 2014

Big retail in US: The monster is dying.

A deserted mall in the United States. Pic: The Guardian

Every day when you open your newspapers you would notice that the only thing that has not changed with times is the number of articles from the foreign press that are culled out and reproduced. Most of these articles are about subjects that have not much relevance in India, but many have a slant that goes very well with the newspaper's unwritten policy. So when no newspaper took up the courage to republish this article from The Guardian (The death of the American mall. June 19, 2014 http://www.theguardian.com/cities/2014/jun/19/-sp-death-of-the-american-shopping-mall) I wasn't the least surprised.

Some newspapers have in fact been openly lobbying for the entry of Big Retail into India. Leading TV Channels have led the campaign unabashedly. Big Retail is being pushed into India as if it can act like Surf Excel -- wash all stains that afflict agriculture. So when I read the detailed analysis in The Guardian it became obvious as to why US President Barack Obama was lobbying so hard with former rime Minister Manmohan Singh to open up for American retail giants (read my earlier blog post: What do you do when Heads of State indulge in lobbying. http://devinder-sharma.blogspot.in/2012/12/the-line-between-lobbying-and-bribery.html). With American malls dying, the only way to keep the US economy in a respiration stage was to shift the dying malls to intensive care unit in India.

Despite the ruling NDA opposing the entry of FDI in multi-brand retail, big business is not giving up. According to a news report in Business Standard in a report entitled US retail chains won't give up on multi-brand retail (June 21, 2014), the US-India Business council is quite hopeful that one day the government will relent. Backed by an army of mainline economists, columnists and TV anchors, the retail industry has reasons to be hopeful.

Nevertheless, The Guardian report tells us how many of the big malls have now turned into retail graveyards. The bog monsters are dying. Various estimates project dozens to hundreds of struggling US shopping centres will close in the next 20 years. The bigger question is if the craze for super malls in US has dried up, does it make any economic sense for India to go through the same route? I am sure there would be many who would vouch for the Big Retail, but then let's not forget they are the beneficiaries of the exploitative business practices in one way or the other.

Even Wal-Mart, the world's biggest retail giant, realises this. It is planning to open up 300 small outlets called Wal-Mart Express and Neighbourhood Market stores (read this report: Coming soon: a small Wal-Mart store near you. http://www.dallasnews.com/business/retail/20140605-coming-soon-a-small-wal-mart-store-near-you.ece). I don't know why this fact is not known to Indian economists and policy makers. #

Further reading: Made in the United States. The Hindu. Sept 15, 2012.
http://www.thehindu.com/opinion/op-ed/made-in-the-united-states/article3897906.ece 

1 comment:

Anonymous said...

There may also be another angle to this. While it is being trumpeted that the entry of Big Retail would improve prices for farmers through improvement in logistics and cutting down on middlemen, land being acquired from farmers through coercive means for the Big Donors in India are often fertile land under cultivation, not wasteland. I wonder if the long term objective is to eliminate the small time farmer too in the retail chain an introduce GM without hindrance...