KARNATAKA

Druggists up in arms against retail chains

Laiqh A. Khan

‘Drug stores cannot afford to give discounts as offered by such chains’



Small retailers get a profit of about

15 to 16 p.c.

‘They will not survive for long if they give discounts’



MYSORE: The entry of large retail drug chains in Mysore has triggered concern and anxiety among drug store owners in the city.

Concerned over the incentives offered by a private drug chain, which has set up more than 15 outlets across Mysore, the drug store owners here have begun mobilising themselves and charting out a plan of action to “save their businesses”.

The woes of the drug store owners are expected to worsen in the coming days with at least three to four such drug chains planning to open their outlets across Mysore.

Apart from offering discounts to the customers, the drug chain is also poaching employees of drug stores in the city by offering them huge salaries, according to owners of drug stores.

The drug chain, with its outlets in most of the localities in the city, is offering a discount of 10 per cent to senior citizens.

“Drug stores in the city cannot afford to give such a discount. Unable to face the competition, most of about 500 drug stores here will have no option but to close down,” secretary of the Mysore City Wholesale Pharmaceutical Dealers’ Association Narendra Babu told The Hindu.

Profit

“Small retailers in the trader get a profit of about 15 per cent to 16 per cent. If they are forced to give a discount of 10 per cent to remain in the trade, they will not be able to survive for long as the expenses of the business are also high,” Mr. Babu said.

As such chains purchase drugs directly from manufacturer, they save on the stockists’ profit margin, which is passed on to the consumer.

‘Future bleak’

Treasurer of the association and manager of “S and V Agencies” on Dhanwantri Road Chandragupt Jain, who lost one of his employees to the drug chain, said that the future of retail drug dealers in Mysore had become bleak with the threat of at least five such large chains becoming operational in the next few months.

“They are squeezing our profit margins. Even if large drug stores manage to compete with the chain’s outlets through volumes, the small drug stores are staring down the barrel,” he said.

An employee in the drug store who was receiving Rs. 7,500 a month as salary joined the drug chain recently for a salary of Rs. 11,500 a month, he said.

Mr. Jain, however, cautioned owners of small drug stores in Mysore against treading the path of war with large drug chains.

However, Mr. Babu said the drug store owners in Mysore, in coordination with their counterparts in Bangalore and other parts of the State, are trying put pressure on the State Government to withdraw permission given for large chains to open their outlets in Karnataka.

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