IOSR Journal Of Humanities And Social Science (IOSR-JHSS) Volume 19, Issue 5, Ver. VI (May. 2014), PP 99-103 e-ISSN: 2279-0837, p-ISSN: 2279-0845. www.iosrjournals.org www.iosrjournals.org 99 | Page Small Retail Enterprises (SREs) and Their Role in Building Neighborhood Community in India Dr. Sanjeev Bansal * and Pankaj Kumar ** * Associate Professor, ** Ph.D. Scholar (Management), Abstract: In India, small retailers dominated the retail industry. In the past few decades, small retailers have been straggling for market share as there is seen a huge development in customer needs and change in life style of consumer drastically. At present when foreign investors are increasing day by day in modern retailing, local small retailers need to be more attentive in responding to present day competition and market changes if they want to maintain their existence in this change. Many researchers say that small retailers are declining in India as powerful retail giants (supermarkets, hypermarkets, etc) taking over the marketplace. But the report published by A T Kearney demonstrates that 92% of the retail industry is still controlled by small family-run business while only 8% of the market is captured by big retailers (Kearney 2012). This paper therefore, aims to discuss the small retailers and their role in building neighborhood community in India. I. Introduction Retailing is one of the largest industries and it is a huge source of employment. It is also one of the pillars of Indian economy and accounts for 14 to 15% of its GDP (McKinsey and Company 2007). Indian retail market has more the 14 million outlets, with that it became the largest outlet destiny in the world (Sinha and Uniyal 2007). According to A. T. Kearny India has been identified as the fifth most attractive retail destination globally from the thirty emerging markets (US-based global management consulting firm A T Kearny 2012). The report demonstrates that the share of retail sector in Indian market is Rs. 2850055 crore ($ 516 billion) in 2012. It also states that India will remain a high potential market with accelerated retail growth of 15-20 percent over the next five years expectedly. Retailing The word “retailing” has its origins in the French verb “retailer” which means “to cut up”, and refers to one of the fundamental retailing activities which is to buy in larger quantities and sell in smaller quantities. According to William J. Stantons, “A retailer or retail store is a business enterprise which sells primarily to the ultimate consumers for non-business use”. 1 Cundiff and Still defines it as “Retailing consists of those activities involved in the selling directly to ultimate consumers”. 2 In 2004, The High Court of Delhi defined the term „retail‟ as a sale for final consumption in contrast to a sale for further sale or processing, a sale to the ultimate consumer. Retailing involves a direct interface with the customer and the coordination of business activities from end to end- right from the concept or design stage of a product or offering, to its delivery and post-delivery service to the customer. The industry has contributed to the economic growth of many countries and is undoubtedly one of the fastest changing and dynamic industries in the world today. Indian retail industry is generally divided into two categories: Small Retail and Organized Retail. Organized Retailing: Organized Retailing refers to marketing activities undertaken by licensed retailers who are registered for sales tax, income tax and, whose business is corporate, who implement management techniques managed by professionals as a firm or limited company or cooperative. These include corporate-backed hypermarkets and retail chains, and also privately-owned large retail businesses. Hence, organized retail which now constitutes 8% of the total retail sector is growing at much faster pace of 45-50% per annum than small retail as per the findings of Indian Council for Research on International Economic Relations (ICRIER 2008). Unorganized Retailing: Unorganized Retail refers to the traditional forms of low cost retailing like local Kirana Shops Owner Operated General Stores, Convenience Stores and Street Vendors, etc. According to the report of A. T. Kearny the Unorganized Retail sector is growing at about 10% per annum has risen from US$ 309 billion in 2006-07 to US$ 475 billion in 2011-12 which is approximately 92% of total retail market share (2012). This is continuously decreasing (in percentage) from previous years as shown in table: