Supermarkets seek Government Support for Sustainable Growth:
For the supermarket industry in Bangladesh to prosper, analysts say there needs to be sufficient policy assistance and a level-playing field.
They also emphasized the need for a value-added tax (VAT)/tax solution.
They were speaking during a roundtable on December 6 in the capital titled “Ensuring Sustainable Growth in Supermarket Industry” organized by Dhaka Tribune, in association with Meena Bazar.
The event was chaired by Reaz Ahmad, executive editor of the Dhaka Tribune.
Kazi Inam Ahmed, president of the Bangladesh Supermarket Owners’ Association, said that the consumers must pay VAT of 5%, which rose from 1.5% in multiple phases.
Kazi Inam Ahmed:
‘The share of supermarkets still 2% of total retail sales for the past 20 years but have huge potential to unleash’ – Kazi Inam Ahmed, president of Bangladesh Supermarket Owners’ Association
The consumer does not pay VAT while purchasing goods from the open market, which is a factor in the supermarkets’ competitiveness.
“The main objective of our supermarket business is to provide consumers with a shopping experience in a beautiful and safe environment where food, fresh fruits and vegetables can be found under one roof, but people don’t want to go to supermarkets because of the extra VAT,” he said.
Reaz Ahmad:
‘It will not be unusual to have at least 10,000 supermarkets in Bangladesh compared to the country’s population if they get proper support’ – Reaz Ahmad, executive editor at Dhaka Tribune
Reaz Ahmad, the executive editor at Dhaka Tribune, said that over the past two decades, the supermarket has reached the stage it is today due to the sincerity of the entrepreneurs and also become highly appreciated at the consumer level.
“The share of supermarkets is still 2% of total retail sales for the past 20 years but has huge potential to unleash,” he said.
Nusrat Jabeen Banu, additional commerce secretary, said that the Ministry of Agriculture has the Agricultural Marketing Act which mentioned how to manage the supermarket and contract firm.
Nusrat Jabeen Banu:
‘Supermarkets should conduct business by maintaining ethics and goodwill as the consumers always prefer safe and secured products with fair price’ – Nusrat Jabeen Banu, additional commerce secretary
“We are ready to give adequate support to grow the sector. If the supermarket authority provides us with their demands, problems, and specific support in writing, surely, we will consider them with high priority,” she added.
AHM Shafiquzzaman, director general at the Directorate of National Consumers Right Protection, said that Bangladesh is a country of 170 million people and its per capita income range was also growing and considering that, the contribution of supermarkets is still insignificant, he added.
AHM Shafiquzzaman:
‘Supermarkets should inform consumers about details of the importers, retail price, and Customs information regarding imported products’ – AHM Shafiquzzaman, DG of Directorate of National Consumers Right Protection
The primary reason for this is the lack of trust and there are also differences in the prices between supermarkets and open markets.
Md Reazul Haque, deputy director of Bangladesh Standards and Testing Institution (BSTI), said: “Our suggestion to the supermarket owners is to keep following these things; mandatory licenses of 229 products, BSTI certificate and the information of importers if the products are imported, price tags and to check if BSTI logo is there or not.”
Md Reazul Haque:
‘Our suggestion to supermarket owners is to maintain mandatory licenses of 229 products, BSTI certificate, info of importers if products are imported, price tags and check if BSTI logo is there or not’ Md Reazul Haque Deputy Director at Bangladesh Standards and Testing Institution (BSTI)
Md Selim Reza, CEO, Dhaka North City Corporation, said: “There is an issue of trust.
Md Selim Reza:
‘There is an issue of trust. However, price variation is very normal in the economic system of our country because maintaining ethics is the main challenge here’ – Md Selim Reza CEO of Dhaka North City CorporationMostak Hasan Md Iftekhar, founding chairman and general secretary of Bangladesh Food Safety Authority, said that 5% extra VAT for consumers is discriminatory.
Mostak Hasan Md Iftekhar:
‘There are many regulations to ensure food safety in Bangladesh, but their proper coordination has not yet been possible’ Mostak Hasan Md Iftekhar, Founder chairman and GS, Bangladesh Food Safety Authority
Md Amin Helaly, vice-president of FBCCI, said that the supermarket is a new addition to the business sector and policymakers should take initiative to create more opportunities in this sector.
Md Amin Helaly:
‘The sector should move forward with its vision by adapting the challenges and building trusts. FBCCI is always ready to support this sector’ – Md Amin Helaly, vice president at FBCCIMalik Talha Islam Bari, director of Unimart, said that the industry can rise to the top if gets policy support and supermarkets will sure to grow if they get that.
Malik Talha Islam Bari:
‘An industry can rise to the top if gets policy support and supermarkets will sure to grow if they get that’ – Malik Talha Islam Bari, director of Unimart
Khandaker Nur-E-Burhan, chief operating officer (COO) of Agora Limited said: “One of the challenges is that we are not able to balance between revenue, profit margin, and operational cost as 5% VAT is applicable on nearly 60%-65% of our products for which we can’t offer consumers a level playing field,” he added.
Khandaker Nur-E-Burhan:
‘One of the challenges is that we are not able to balance between revenue, profit margin, and operational cost as 5% VAT is applicable on nearly 60%-65% of our products’ Khandaker Nur-E-Burhan COO of Agora Ltd
Mahadi Faisal, head of marketing, Shwapno (ACI Logistics Ltd), said that the size of the retail business is Tk325,000 crore with around 1.8 million shops.
Mahadi Faisal:
The media can promote this sector more prominently’ Mahadi Faisal, head of marketing, Shwapno (ACI Logistics Ltd)
Galib Farrokh Bakht, COO, Pran-Daily Shopping, said that there is no policy regarding the area-based rent of commercial and other space though the rent accounts for 4% to 5% of the total cost.
Galib Farrokh Bakht:
‘There is no policy regarding the area-based rent of commercial and other space though the rent accounts 4%-5% of total cost’ Galib Farrokh Bakht, COO of PRAN-Daily Shopping
“Moreover, we have to pay Tk12-Tk16 per unit for electricity bills while normal shops pay it as per residential rate,” he added, saying that electricity bills account for 2%-3% of the total cost.
Ahmed Shoyeb Iqbal, head of expansion, brand and online, Meena Bazar, said that they want a level-playing field for all.
Ahmed Shoyeb Iqbal:
We want unified rules and regulations to follow which will ease the business’ – Ahmed Shoyeb Iqbal Head of Expansion, Brand and Online at Meena Bazar
“Respect all rules and regulations. We want unified rules and regulations to follow which will ease the business,” he added.
Dr Sahadev Chandra Saha, director (enforcement) of Bangladesh Food Safety Authority, said that supermarkets should start contract farming across the country which will ensure the consumers fresh and organic food products.
Dr Sahadev Chandra Saha:
‘Supermarkets should start contract farming across the country which will ensure the consumers fresh and organic food products’ – Dr Sahadev Chandra Saha Director (Enforcement) at Bangladesh Food Safety Authority
‘Policymakers should act by understanding their needs. The supermarket also has a role to play here, and the association should be proactive like the British Retail Consortium’ Engr M Liaquat Ali Asia Regional Director, United Certificates Services Limited
Dr Abdul Hannan Chowdhury:
‘We have to focus on home grown products, reducing transshipment cost, warehouse cost, equipment cost to reduce overall cost’ Dr Abdul Hannan Chowdhury, Professor at North South University
Zakir Hossain:
‘The supermarkets played a vital role during the Covid-19 and we started home delivery for the first time’ Zakir Hossain, GS at Bangladesh Supermarket Owners’ Association
Kazi Inam Ahmed further said that they have to come up with a coordinated strategy and the Commerce Ministry should take the guardianship. “We all have the same goal; we want safe food at a good price in a safe environment. If this sector gets proper policy support, it can move forward to fulfill the goal,” he added.
