Superstores folding operations on losses

Burdened by losses and uneven competition, as many as 20 superstores have folded their operations in recent years and many others may follow suit people familiar with the situation say.
While demand from urbanites and upper and middle-class shoppers has drawn a new generation of entrepreneurs into the supermarket business, they say, a lack of policy support and uneven competition from traditional shops have caused their ventures to bleed.
Nandan Supershop, Sadia Supermarket, Pacific Supermarket, Hut Bazar, PQS, A to Z Shopping Mall, Best Buy supermarket, City supermarket, Destiny Shopping Mall, Leeds Shopping Mall and Central Mart are among the supermarkets that shut their door in the last couple of years.
 "We've introduced an organised shopping system in the country and ensured quality, hygiene and safety issues of goods but many of our fellow businessmen were forced to close down their business for lack of government's policy support," Md Zakir Hossain, owner of 3S Shopping Mall, told the FE.
"Traditional grocery shop owners are paying a lump sum amount of government duty. On the other hand, supershop owners have to pay up to 4 per cent of duties and corporate tax and others, throwing us into an uneven competition," he said.
 "Besides, we cannot keep our shops open after 8 pm - the peak hour of such a business. On the other hand, traditional shops can continue their business as long as they want which is clearly discriminatory," said Mr Hossain, who is also General Secretary of Bangladesh Supermarket Owners Association.
Mr Hossain said that his association had submitted a proposal in 2011 to the commerce ministry to formulate a policy for the sector so that it can follow it while doing business.
But the government is yet to respond to the issue, he added.
Chief Executive Officer (CEO) of Meena Bazar Sahin Khan said if the government does not take a positive step to remove the barriers to the business many other supershops will be forced to close their businesses soon.
 "As the supershops are ensuring a decent shopping practice in the country, the government should provide all sorts of support to the sector," he said.
He noted that at present, supershop owners are facing problems in sourcing of goods directly.
Abdul Huq, a manager of Prince Bazar said if the government withdraws VAT or allows supershops to run after 8 pm then the supershop owners could stay in the business.
 "People usually come for shopping at their off-time, usually after office hours. If the government extends the time limit of closing the outlets at least by two hours, it will save many such supershops from closure," he added.
Khandakar Serajuddin, proprietor of Almas Supershop, said they would be able to sustain the business if government provides all sorts of support to the sector.
 "A supershop needs to use costly machinery, employ highly-paid staffs, ensure safety and preserve all kinds of foods and relevant products in a hygienic way that naturally pushes up prices of the items. So considering the necessity of protecting consumers' rights, the government should ease burden on the sector," he added.
He also urged the government to reduce electricity tariff for supershops and withdraw time limit of operation of such business for the greater interest of the consumers as well as the sector.
However, according to the sector insiders, presently around 100 superstores are in operation across the country employingmore than 5,000 educated people.