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Role of Supply Chain Management in Kirana Store Recovery

Indian Retailer Bureau
Indian Retailer Bureau Nov 10 2021 - 4 min read
Role of Supply Chain Management in Kirana Store Recovery
The unorganized grocery retail segment has been witnessing tremendous changes post COVID-19 which has been a strong pivot and breakthrough for the Kirana store owners.

From times immemorial the next-door grocery has been your support system during times of distress when suddenly you wake up in the morning and find there is no sugar for your first cup of tea to sip along with your favorite newspaper. It was somewhere around the mid to late 1990s that large format retail stores began to bob their head offering consumers a ‘shopping experience’ like never before. 

Over the years, the opening of FDI (Foreign Direct Investments) attracted many large national and international players in the retail segment. Consumers thronged to these large retail stores for their groceries, fruits, vegetables. Some of the hypermarts even stocked international product range to woo consumers. Come the weekend, visits to the high-end super markets and hyper marts had become a ritual until the cruel pandemic came down with its iron fist in early 2020. Consumers scrambled to be within the safety of their homes once again ‘heavily’ relying on the friendly next-door neighborhood store – the one who knows you much better than the biggies. 

The unorganized grocery retail segment has been witnessing tremendous changes post COVID-19 which has been a strong pivot and breakthrough for the Kirana store owners. Keeping in mind social distancing, cleanliness, hygiene, the friendly next-door Kirana stores are now adopting unconventional ways to conduct business. With speculations rife about the third-wave of the pandemic and the reliance on the next-door friendly store only likely to increase in the wake of social distancing, agility, and responsiveness of the Kirana stores will be the key to their efficiency and delivering better customer experience. A robust supply-chain mechanism holds the answer to a faster recovery of the Kirana stores and gears themselves up for any eventuality. 

Here are a few things that the retailers need to immediately look at to help them turn around quickly and gear up. 

Securing Demand: It is extremely important for retailers to have a firm pulse on consumers’ demands and replenish stocks accordingly to be able to cater to the demands in a timely manner. To ensure consumers’ preferred products/ brands are always available on the shop shelves, retailers are working closely with their supplier bases, including CPG makers, distributors, and co-manufacturers. The topmost priority for the retailers is to secure a fast and reliable supply. 

Going Digital: The local stores’ recipe for success lies in going digital. It would be prudent for the kirana stores to investment in an inventory management system to regularly track inventories and replenish their consumer’s favourite products well in time to be able to meet the demands of the consumers. 

Maintain Stocks at Par Level: By maintaining stocks at par level, retailers will be in a better position to understand when to replenish the stocks when it drops below the predetermined levels. This can of course vary from product to product. Another advantage of maintaining stocks at par levels is that Kirana stores can eliminate excess stock problems. 

Group Products Meticulously: Studies have indicated that grouping similar or complementing products together promotes impulsive buying. It also helps consumers remember to buy products in case they forget. For eg. placing cookies along with tea or coffee. Or placing butter, cheese, or sauce near breads 

Healthy Supplier Relations: This is by far one of the most crucial factors for ensuring timely and on-time supply of stocks to the retailers. Maintaining healthy relations with the suppliers goes beyond just friendly communication. It warrants transparent, proactive conversation because remaining flexible is part of thriving stock management, especially after the COVID.

Follow First-in; First-Out (FIFO) Approach: FIFO is the most simplistic ways to manage stock in a Kirana store, especially post COVID. Under this approach, the retailer fulfills a customer's order with the stock that is lying with him for a long time. This approach not only ensures the oldest stocks are out first; but also helps in effectively and efficiently tracking the stocks and replenishing accordingly.

In summation effective stock management is one of the most crucial things that a local retailer can do and meet customer requirements in a timely manner. While on the one hand efficient inventory management not only helps the business owners manage their cash flows better, it also helps them deliver customer delight and woo customers back to their stores regularly to ensure a steady stream of business.

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