Kirana retailers suffering on thin margins

New Delhi: FMCG makers, earning higher profits on their products, should consider increasing the margins for small retailers selling their goods, said METRO Cash & Carry India MD & CEO Arvind Mediratta.

The margins for the retailers have not changed for the past several years and the FMCG companies still call the shots in this, said Mediratta suggesting a proper equitable distribution of margins.

"FMCG companies are making record profits year-on-year, the volume growth is four per cent and profits have grown 40 per cent. Why is that because they have kept the margins of the traditional retailers fixed and unchanged over the past 30 years," said Mediratta, while speaking at a panel discussion in a programme organised by industry body FICCI and ICPRG. This is one of the problems that the small retailers are facing as margins are the same but their operating cost is increasing, he added.

"Everything has gone up, salaries have gone up but the margins have not gone up. It has actually come down in some cases," he said suggesting them to negotiate collectively better terms of trade with FMCG makers. Some companies have magical price points, which have remained the same despite successive hikes.