Experts: Policy support, level-playing field crucial for supermarkets to do well
In order 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 VAT/tax solution.
They were speaking during a roundtable on Tuesday 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.
President of the Bangladesh Supermarket Owners’ Association Kazi Inam Ahmed said that consumers must pay VAT of 5%, which rose from 1.5% in multiple phases.
“The consumer does not pay VAT while purchasing goods from the free market, which is a factor in the supermarkets’ competitiveness.
Our supermarket business’s main objective is to offer consumers a shopping experience in a beautiful and safe environment, where they can find food, fresh fruits, and vegetables all under one roof.
“But people don’t want to go to supermarkets because of the extra VAT,” he said.
The supermarkets in Bangladesh were the first to introduce POS, barcodes, ensured quality and quantity and played a role in return policy and price stabilization.
He also mentioned that importers have to pay 70%-175% tax on refrigerators, along with facing issues such as high space rent in prominent areas, electricity bills, etc.
Nusrat Jabeen Banu, additional secretary of the Ministry of Commerce, said that the Ministry of Agriculture has the Agricultural Marketing Act which mentioned how to manage the supermarket and contract firm. According to this law, supermarkets must operate accordingly.
AHM Shafikuzzaman, director general of the National Consumer Rights Protection Directorate, said that there is a lack of trust among the consumers regarding the products of the market.
In this regard, he mentioned the recent situation in the egg market.
He also said that to gain trust, supermarkets should work on sourcing traceability.
“They should inform the consumers about their sources of products,” he added.
Reazul Haque, deputy director of Bangladesh Standards and Testing Institutes (BSTI), emphasized that consumers should verify the presence of mandatory licenses, price tags, and the BSTI logo.
Md Selim Reza, CEO of Dhaka North City Corporation (DNCC), said that there is a lack of trust, limitations of laws, and also an unethical mentality. “These should be resolved,” he added.
Sahadev Chandra Saha, director of Bangladesh Food Safety Authority, said that supermarkets should take preventive measures in SCM and also should ensure the traceability of sources of products, consumers and suppliers, and also introduce recall systems.
Amin Helaly, vice-president of the FBCCI said that supermarkets are a new addition to the business. Everyone should work to unleash their potential.
Ahmed Shoyeb Iqbal, head of expansion, brand and online, Meena Bazar, said that they want a level-playing field for all.
“We respect all rules and regulations. We want unified rules to ease the business,” he added.
The speakers also said that the annual business of supermarkets is worth Tk3,000 crore.
The government should work to solve the infrastructure problem.
The government may raise the workforce in monitoring and source a workforce based on PPP if needed.
They also urged on modernizing the supermarkets and if done, it would connect 2.7 million new employees, 1.4 million farmers, and a 20%-30% rise in income.
According to the Bangladesh Super Market Association, currently, the share of supermarkets is 2%-2.5% in total shopping and the number of outlets is around 300.
It is one of the most potential sectors of business in Bangladesh.
Zakir Hussain, general secretary of Bangladesh Super Market Association, Malik Talha Ismail, director of Unimart, Mahadi Faisal, head of marketing of Shwapno, Khandaker Nur-E-Burhan, COO of Agora, Galib Farrokh Bakht, COO of Daily Shopping, Engr M Liakat Ali, director of United Certification Services Ltd, Rejaul Karim, member of BFSA, Mostak Hasan Md Iftekher, founding chairman and general secretary of BSFA, Dr Abdul Hannan Chowdhury, professor of North South University also spoke at the event.