The Hindu Business Line : TUCS: A pioneer once, losing out now

TUCS Ltd, the cooperative society that runs a chain of provision stores, public distribution shops and petrol bunks, will be 100 years old this April. But how much longer can it last is the question on the employees' mind as its businesses take a hit either due to Government policies or just poor judgment.

The Triplicane Urban Cooperative Society Ltd, TUCS, as it is more popularly known, is losing out as its products are out priced in the market. It operates 216 ration shops, 10 self-service department stores, 16 cooking gas outlets and a petrol bunk. Till November last it also operated 16 liquor shops, which accounted for a major share of its turnover.

The TUCS needs to look at ways to increase businesses, not just serve as a market intervention tool for the Government.

If tea or dhotis and sarees of the cooperatives do not sell, they look to the TUCS for marketing.

But these are not often profitable, we need to run our own businesses and it can be done based on the available facilities and competency, the employees say.

TUCS is a pioneer in Chennai in setting up self-service department stores, but finds its patrons weaned away by competitors.

But this can be set right with appropriate management, feel the employees. The TUCS shops could be run "profitably by anybody with enough business acumen to run a petty shop," says an old hand.

How many department store chains can boast of showrooms and storage space dispersed in a number of localities around Chennai? TUCS owns about 40 buildings in the city in prime locations, and its assets are over Rs 100 crore, they say.

This includes an 8,000 square feet department store with storage space on the arterial Anna Salai. Time was when this store reported a turnover of more than Rs 30 lakh a month. Shoppers would flock to the stores to pick up monthly provisions because the quality and pricing were unmatched. Now just a fraction of the customers come in as the products are costly or quality is poor.

These provision stores were competitive when they purchased commodities directly from production centres. However, now, with a committee looking into purchasing commodities from the market, they are not competitive.

If the TUCS could approach the National Consumer Cooperative Federation, which coordinates purchases for the cooperatives, the problems would be solved, they say.

Adding to its woes, the recent decision of the Tamil Nadu Government in taking over retail sales of liquor from private and cooperative sector, meant that it lost its most lucrative business. Since 2000 when it got into liquor sales, the assured profit from the business had helped TUCS's fund flows and met the society's working capital requirement.

According to sources, TUCS's turnover in November 2003 from the 234 shops including liquor business was Rs 6.19 crore and the next month it dropped to Rs 4.5 crore after it gave up the liquor shops. Of the 16 liquor stores, 14 were operating out of TUCS's own premises, and the State-agency selling liquor is now running these outlets. Even the details of the rent for these facilities are not available, according to sources in the know.

TUCS will have to go for an overdraft now to meet its administrative and salary expenses which work out to about Rs 50 lakh a month. In 2002 the society sold off over Rs 4 crore worth of property to clear its dues and had managed to maintain its current account without any dues.

The turnover from public distribution system, though not one of its profitable businesses, is set to take a hit as the Government introduced the H-card system, which will mean that those with a monthly income of more than Rs 5,000 will no longer buy commodities from the public distribution system.

Though the impact is yet to be assessed, sources in the know feel that this will mean about one-lakh cardholders, of the 1.75 lakh that the TUCS shops cater to, will no longer purchase any commodity from the outlets.

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