To provide hoi polloi with daily household items at affordable rates, flagged with ubiquitous store presence across Pakistan, had been the concept behind the creation of the Utility Stores Corporation in 1971. An infrastructure comprising of more than 4500 stores and over 14000 employees, makes Utility Stores an asset of the state that could be instrumental in benefiting the common person with direct financial benefits, any government wishes to pass on. Ironically since its inception, Utility Stores besides being a retail stores organization, had always been a stage set for, political interferences, inapt management practices and remained averse to the changes proposed over a period of time that were aimed at inculcating modern business practices for it to remain competitive. It is pertinent to mention that it was the Utility stores that brought in the concept of having all items under one ceiling, supported by aisle structures in Pakistan. But like many other public sector organization, Utility Stores is also languishing under the burden of decreasing sales, ever increasing losses, incapacitated by mismanagement, and always vying for bailout packages.

Utility Stores had been in state of disarray since the early days of its creation and factors that remained  quintessential in bringing this giant to its knees includes non-professional management, deplorable warehouses operational system ,primitive price assessment and implementation model, absence of a viable ERP ( enterprise resource planning - a system that integrates an organization`s financials, supply chain, operations, reporting, manufacturing, and human resource activities) and consequently an entrenched corruption. All the aforementioned factors have been creating negative inertia and had a pernicious impact on overall utility stores rendition. Fiscal 2013-14 was the last year where Utility Stores shown a whopping 1.4 billion profit, preceded by a continuous decline on yearly basis and finally ending up at 14 billion loss. Let us have an objective review on the conundrums Utility Stores have been facing since long,  but during the current decade, they  became more evident owing to the advent of modern retail concept in Pakistan that are appearing more enticing for the consumers.

To have a general cognizance or to be an expert of a certain field are two entirely different manifestations. For most of the time Utility stores have seen bureaucrats as it managing directors with few stints of armed forces personnel as well. Bureaucracy being an administrative tool of the government has never been able to run this organization on established business principles. Bureaucracy has never triumphed in championing its basic idea of providing the household items at an affordable rates and consistent good quality. The major concern of a bureaucrat MD, instead of leveraging the new business ideas to enhance revenue and profitability, has always been to act as an administrative tool of the government primarily focusing on transfers –postings, and maintaining an active liaison between USC and concerned ministry. That approach somehow pushed a profit making organization into a quagmire, where it has been lurching from one crisis to another.

The distribution model of Utility Stores is still treading an old school of thought where the stocks are first shipped to a warehouse (USC has around 62 warehouses) before getting supplied to the retail stores. This model gives supplies a longer curve to reach the market, by consuming extra time and exhausting more resources. Utility Stores are bearing, a substantial financial loss every month when already purchased stocks either get expired or damaged owing to absence of an expeditious stocks keeping warehouse practices and control mechanism. A regime of weak control at warehouse level, fraught with innumerable lacunas in handling process, makes a classic recipe for corruption to go on unabated. By directing suppliers to ship stocks directly to the stores will save Utility stores an enormous sum of money in lieu of re-distribution cost, in addition to curtailing upon fixed and variable costs involved to run warehouses.

In the wake of hyper markets phenomenon in Pakistan after 2007-8, effective and attractive retail price assessments have become a vital technique for the business viability and growth. With a growing consumer awareness, local and global modern stores attracts the consumer by offering them with discounted prices. There have been instances where these stores were found selling stocks at the prices even less than the supplier’s sale price. That was done by leveraging the rental impact suppliers give to those stores on acquiring extra shelves and display options. Utility Stores retail universe have an enormous shelve space opportunity that can be offered to suppliers against attractive rentals but haplessly Utility Stores have no system in place to monitor and calculate the shelve space options lying with them, resultantly companies are enjoying provision of large shelve spaces for free. Utility stores must strive to devise a system that can keep record of available spaces at the stores that would earn them propitious monetary incentives that may run into millions.

Another limiting factor that has actually stalled the revenue growth of Utility Stores is an outdated price change mechanism. For instance, in case of price increase by suppliers, it takes Utility Stores at least 15-20 days to establish that price across the stores, leaving a big gap for many corrupt practices to occur in connivance between local warehouse and store administrations. Therefore, provision of a state of the art IT system is indispensable to cauterize ineptness in devising the pricing strategy.

For last 5-6 years, a budget had been allocated annually for the installation of ERP system at Utility Stores every year, however any outcome is yet to be seen as the practice has become a soporific routine of repetitious details. Unless, Utility stores installed an efficient ERP system, objective of having synchronized operations at organizational level would remain a dream. Since fiscal 2015-16, another practice that has throttled Utility stores revenue growth, was non-provision of subsidy amount that has been announced every year by the government before Ramazan. Utility Stores practice of passing on to consumers a sum of 1.3 billion worth subsidy every year on government`s behest, only added to its  bludgeoning receivables accounts by doling out cash from its capital reserves.

To conclude, Utility Stores are an asset of commercial and strategic importance that could play a pivotal role in extending fruits of government assistance programs to the common people. Post novel corona pandemic, situation prevalent made axiomatic the Utility Stores potential to act as a conduit for the government`s policy of helping the deprived. For the first time, under current regime, reins of Utility Stores have been handed over to business professionals who are sanguine in thriving to rejuvenate this organization by bringing in best business practices. A comprehensive automation is required at Utility Stores, failing to do so, under current circumstances (when government has been allocating billions to support the low income faction of the society), would tantamount to incur financial losses. And to curb that menace through current manual tracking in place, would be like piling Pelion on Ossa.