Shopkeepers both rejoiced and despaired last Saturday as two separate announcements stayed the execution of convenience stores in India but may have sealed the fate of those in Abu Dhabi.
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In the UAE's capital city, the Abu Dhabi Food Control Authority announced grocery owners must begin upgrading and renovating their stores to the standards achieved by international retailers such as Carrefour, or lose their licences to trade.
Meanwhile, in India, politicians put on hold plans to allow foreign retailers, including Carrefour, into their US$450 billion (Dh1.65 trillion) retail sector after trade unions and critics warned that millions of small, independent shopkeepers would be forced out of business.
The government of Manmohan Singh, the Indian prime minister, had previously announced reforms to allow foreign ownership of up to 51 per cent in multi-branded retailers, as supermarkets are known in India, encouraging international giants to enter one of the last major untapped retail markets in the world.
Abu Dhabi and India offer contrasting approaches, with India looking out for the little guy and Abu Dhabi favouring the international corporation.
Many of Abu Dhabi's independent small-store owners are expected to shut up shop completely due to the high cost of improvements, which it is estimated could be as much as Dh160,000 per premises.
According to a recent study by the Abu Dhabi Government, there are more than 1,300 independent stores in the city. They are open an average of 16 hours a day and generate income of Dh1bn a year.
Owners complain the new rules will damage profits through upgrade costs and closures for renovations.
Once shopkeepers reopen, they say sales could fall 50 per cent because the Government is requiring them to put fewer products on more spacious shelves.
So under Abu Dhabi's new rules, gone will be the days of stacking products on top of each other in mini-Burj Khalifa like towers. Instead, grocery stores will have to approximate a Carrefour Market, LuLu Express or Adnoc petrol station, where products are lined out in orderly fashion on the shelves.
Stores will have to be more consumer-friendly in layout and practise better food preservation, avoid cluttering shelves and provide staff uniforms.
Throughout the UAE, convenience store and community retailing is undergoing a revolution as consumers begin to shun the once-a-week shop and buy groceries on a more ad hoc basis.
Carrefour, LuLu and Geant are all expanding their smaller convenience supermarket networks, while Al Maya and Choithrams have been aggressive in the space already.
A new player called Zawya, part of the Saif Abdulla Al Ghurair Group, is expected to open 90 stores across the UAE over five years and North America's second-biggest convenience store, Circle-K, plans to open 100 shops across the Emirates.
Even without the Abu Dhabi reforms, local independent stores are already under fire from the big retailers, who have an advantage through economies of scale and the cash to provide sleek aisles and decor. The Government's new regulations are likely to squeeze small-store owners further.
The scenario playing out in Abu Dhabi is exactly what politicians in India fear. But overall, experts say the advantage to the economy of a more efficient retail market outweighs the negatives.
Big retailers can cut costs in the supply chain, buy in bulk, more easily source from around the world and command lower rents. All these factors lower the prices of goods for the shopper.
There is also a healthy level of competition among the big names in retail in the UAE, which should ensure they do not abuse their position.
In addition, Abu Dhabi's ultimatum to shopkeepers to raise their game predominantly affects expatriates who make up the vast majority of grocery-store owners.
Meanwhile, the emirate will benefit from the maturity of the retail market and the development of major retailers.
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