A rural retailer’s green shoots: While organized retail chains in urban India are shutting stores and scaling down ambitions, Hariyali Kisaan Bazaar is looking to add 200 rural stores to its existing chain of 300 in two years

Rasul Bailay

Karan Vir comes calling the agronomist—or agricultural specialist—at the Hariyali Kisaan Bazaar store with a yellowing paddy plant (plucked out from his field), its roots covered in sand, in a small plastic bag.

It doesn’t take the specialist long to discover the problem. He advises Vir to add sulphur to the soil to counter excess salt being generated by the use of groundwater for irrigation. The 34-year-old farmer buys a 15kg bag of the chemical, but his attention is now captured by a shiny black Hero bicycle kept on display along with hundreds of other grocery and lifestyle products.

On average, 300 villagers such as Vir, daily visit the Hariyali store in this village, about 35km east of Karnal, an agricultural town in Haryana. Most visit to seek advice on agricultural problems and buy farm products. And about 30% of them end up buying other products. Some buy sugar. Some buy shirts. The store manager says sales are up 40% compared with last year.

While sales have shrunk over the last one year or so for almost all the so-called modern retail chains in urban areas on the back of an economic slowdown that affected consumer spending, rural India has witnessed swelling sales of everything from mobile phones to motorcycles.

Hariyali currently operates a network of 300 stores in eight states and plans to increase the number of outlets to 500 over the next two years.

That number is significant because of the corresponding numbers for modern retail chains in urban India. The country’s largest discount-store operator, Subhiksha Trading Services Ltd, shuttered its nationwide network of 1,600 stores amid severe cash crunch. The country’s largest listed retailer Pantaloon Retail (India) Ltd has seen its same-store sales at home segment retailing decline over the last six months and chains run by Aditya Birla Retail Ltd, Reliance Retail Ltd, Spencer’s Retail Ltd have shrunk as the companies closed stores and trimmed their expansion plans.

A booming market:

A thriving agricultural economy and high food prices—resulting in farmers earning more for their produce—helped the rural economy thrive even as that in large cities and towns slowed.

Rural families spent around 63% of their expenditure on food 15 years ago; this proportion declined to 53% in 2005-06, according to the National Sample Survey Organisation. Companies cite anecdotal evidence to claim that this proportion has declined further in the three years since.