Increased level of risk-taking in retail sector and the need to support

Increased level of risk-taking in retail sector and the need to support

The retail industry is expensive and requires huge investment. The amount of investment in this industry depends on the macro policies of each group. Although for some large chain stores, due to their organizational and governmental nature, the use of properties with government capital is on the agenda; But for stores operating in the private sector, the cost of buying property and investing in this sector is very high. Also, the figure for renting properties and providing the necessary equipment is very high in terms of increasing prices, and on the other hand, the need for working capital of stores is increasing due to the growth of the prices of goods.

Exemption from providing facilities from municipalities

Referring to the advantages of creating department stores, Farhad Foulad said: the type of service of department stores is in line with city services, which brings many benefits, including reducing air pollution and reducing inner-city traffic through one-step and general purchases; Therefore, due to the numerous urban advantages of large stores and the high investment cost of buying commercial property, it is appropriate to consider exemptions for the development of this industry. He added: In the country, only 15% of the sales share is in the hands of chain stores and 85% is in the hands of capillary markets. If urban services and the many benefits of chain stores are to increase for citizens; There is a need to provide a support package to private sector investors from the government, which will ultimately benefit the end consumer.

The expectations of retail industry activists from the government

Despite the benefits of large chain stores for the government, no government support has been provided to this industry so far, and now the question is, what incentives can the government consider for the activists of this industry? In this regard, Foulad said about the expectations of the activists of this industry from the government: the first suggested solution is that the government identify the best companies in the retail industry and their performance in recent years based on the growth curve in terms of increasing the amount of job creation, paying taxes, added value, Quantitative and qualitative development of branches and other key cases should be evaluated and after targeted identification, practical action should be considered to create incentives and legal exemptions for the development and continuation of activities in this sector. Fundamental changes in pricing structures and policies are expected from the support organization for the quantitative and qualitative development of this industry, and determining the approved profit coefficients is not the answer to the many costs in this industry. He also emphasized the necessity of collecting counterfeit and smuggled goods from the capillary market.

Retail industry requires huge investment

Pointing out that the retail industry was unprofitable during the first three to four years of its operation, the vice president of commerce of Saman Andishan Amritat stated: On the other hand, the investors of large chain stores bear a lot of overhead costs, including property rent, electricity and energy, and equipment supply. and quality human resources in order to respond appropriately to respected customers in proportion to the size of each store. On the other hand, large stores seek to provide quality and additional services to respected customers, and in this regard, the provision of facilities such as proper parking, easy access from the cash register to the parking lot, as well as the mechanized warehouse of the goods depot, requires large costs.

Domestic stores equal to foreign ones

Comparing large domestic chain stores with international markets in terms of equipment quality, product variety, etc., this industry expert stated: In general, Iranians are perfectionists and often look for high quality goods and services. At the same time, according to the needs assessment of the customers of large chain stores, in terms of modern equipment such as cold storage, refrigerator, freezer, shelves, IT equipment, lighting, etc., there is no shortage compared to foreign stores, and currently there are modern stores with modern standards in Iran that are providing services. He emphasized: In terms of product variety, although our distance from international markets was greater in the past, domestic products have grown significantly in quantity and quality in recent years due to the policy of not importing goods.

Lack of support for working capital

Foulad assessed the efficient and targeted management in this industry as very important to prevent losses and said: If preferential support and facilities are provided in the field of financing, surely the private sector activists in this industry will step up strategically due to the reduction of investment risk and will cause the development of this industry; Unfortunately, in the current situation, the private sector’s large investment in this industry is not cost-effective.

The future of local supermarkets

Foulad also said about the future of local supermarkets with regard to sustainable job creation compared to the creation of large chain stores: Today, the major share, 85% of the market belongs to capillary market, and the increase in the share of chain stores to more than 15% depends on the government’s policies in creating a coherent structure for Achieving sustainable employment, transparency and the possibility of continuous control in the payment of government rights and entitlements and the creation of a new product distribution system to help market regulation policies. Therefore, considering the above and the 15% market share of chain stores, as well as the extent of the market in the country, there is no need to worry about the future of local supermarkets.

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