According to a study by global researcher Euromonitor International, the local kiranawala in India still rules the roost, with traditional stores accounting for 98 per cent of total grocery sales by value.

Modern grocery retail formats like hypermarkets, supermarkets, convenience stores and discounters were relatively new and nascent formats in the country and hence bagged less than two per cent of sales in 2006.

"With over 11 million traditional stores, these stores outnumber modern grocery formats and in the process garner almost all the grocery sales taking place in the country,'' says Umesh Madhavan, senior research analyst, Euromonitor International.

Madhavan believes that because modern formats are limited in number, they are yet to make a significant impact on neighbourhood stores.

There have been protests in many parts of the country, including Uttar Pradesh and Jharkhand, against organised retailing and the central government has commissioned a study to assess the impact of retail chains on neighbourhood stores.

"Over the next five years, kirana stores are expected to continue to co-exist with modern grocery retailers as the total grocery retail pie expands, though the share of modern grocery formats within grocery retailing is expected to increase to 5 per cent by 2011,'' Madhavan says.

He says that big retail chains could lure consumers away from kiranas if they opened small stores in residential areas, in formats similar to kiranas and matched the home delivery and credit facilities along with the discounted price, wide product range and shopping environment of the big stores.

Where is the kiranawala gaining? "The independent retailer has kept overhead costs in check by ownership of retail space and keeping self or family members as employees. Techniques such as home delivery, credit and tie-up with manufacturers are seen as ways to attract and retail customers,'' he says.

Meanwhile, modern grocery retailing in India grew at 48 per cent in 2006, the fastest among Asia-Pacific nations, according to the Euromonitor study.

Vietnam was second at 43 per cent, Indonesia third with a 24 per cent growth, while China and Malaysia registered 14 per cent and 13 per cent respectively.

The study attributed the phenomenal growth to discounted pricing, in-store promotions, product variety and better shopping environment provided by modern retailers.