The BizBlog

Supply crunch at various Subhiksha outlets in the NCR

September 6, 2008 – 1:54 pm

Many vendors, who didn’t receive their dues, say they have stopped supplies to Subhiksha in NCR. Vendors at Azadpur, capital’s largest wholesale market for fruit and vegetables, allege that the Subhiksha hasn’t paid them their dues for the past several months.

Vendors say their payments were held up for anything between two and six months. Fruit and vegetable sellers say unpaid bill amount is around Rs. 3 crore and some people are continuing due to fear of Subhiksha withholding their previous dues.

Officials at Subhiksha however downplayed the issue. In business if someone’s payment is delayed, it could be for numerous reasons. It could be because of supply issues, quality issues, or billing issues. Since most of vendors at Azadpur are not organized, they have problem in being able to reconcile their accounts.

The net result is he discount retailer Subhiksha is facing a supply crunch in the NCR, with many wholesalers stopping supplies to the firm over non-payment of dues or some other issues.  Many outlets across NCR have either downed shutters, or are doing very little business. The retailer operates in a decentralized system and payments are handled by local team itself. But, now it seems the central management steeped in the resolve the issues to avoid court battles with suppliers.

Subhiksha, according to these wholesalers, usually paid on time, but things started souring in March. The company, which runs India’s largest chain of discount stores, has been the most aggressive organized retail player. In 2007-08 Subhiksha earned a revenue of Rs2,300 crore. It’s amazing to see such large player not paying bills.