Supply & margins tight for retailers, Chennai Corp. to ease supplies

With supply of essential items remaining tight amid the nationwide lockdown due to coronavirus, it is the retailers who are feeling the squeeze on their profit margins in Tamil Nadu.

In order to ease the supply to the residents, the Greater Chennai Corporation (GCC) along with the traders body has decided to introduce mobile vegetable and grocery shops.

"The supplies are tight. Given the situation, some wholesalers are demanding the Maximum Retail Price (MRP) from us," the owner of a retail outlet in Chennai's Mylapore locality told IANS.

Concurring with him was R.K. Angamuthu of Sree Angalaparameswari Store in the same locality.

"We buy from the wholesalers. They are selling only at MRP. In this locality groceries in loose packages are not preferred," Angamuthu told IANS.

"We can't let down our regular customers at this time and hence selling packaged items is like a service," he added.

Another retailer, however, said company distributors are billing at normal rates.

"Buying at MRP and selling at the same price does not make business sense. On the other hand, buying at MRP and selling at a higher price results in loss of customer goodwill and also invites legal trouble," said N.R.R. Suresh Alwar, a grocery store owner in Trichy.

However, he said, there are wholesalers who have increased their prices, which in turn has resulted in reduced margins for the retailers.

"For instance, before the lockdown, branded wheat flour pack was sold to retailers for Rs 47 per kg and the MRP would be, say, Rs 57. We will sell it for Rs 55. But now the wholesale price has increase which in turn has reduced our margins," Alwar added.

According to him, branded biscuits are still available at normal rates though prices of pulses have increased by Rs 10 per kg.

The retailers are also not given any supplier credit and it is only cash purchases.

Meanwhile, the grocery stores are operating between 6 a.m. and 1 p.m. across the state, with retailers enforcing social distancing at their outlets. Departmental stores are allowing one or two persons inside their outlets at a time as others queue outside.

In case of vegetables, supplies are normal and items like cabbage, okra, potato, tomato, onion and others are being supplied to the Koyambedu wholesale market here.

"During normal days, about 450 trucks would bring in vegetables. Now we are getting about 300-330 trucks per day," S. Chandran, President, Koyambedu Periyar Market Licensed Merchants' Association told IANS.

Chandran said prices fluctuate on a daily basis based on the supplies.

According to him, with demand from the hotels drastically reduced with a ban on dine-in service, the prices may have gone down.

The retail prices of cabbage, potato, tomato and other items range between Rs 30-40 per kg.

Angamuthu said while vegetables are available, the wholesalers are not allowing us to be selective. On the other hand customers are pick and choose the items resulting in sizeable wastage.

Meanwhile, the Greater Chennai Corporation will induct about 5,000 tricycles and 2,000 small motor vehicles to sell vegetables and groceries across the city.

This is expected to reduce the crowding of retail outlets and the risk of spreading coronavirus. IANS