Project On Growth of Retail Sector in India

TABLE OF CONTENTS
1. Industry Overview 05 2. Organized Retail Sector 10 3. Origin of retail 13 4.

Indian Retail Industry 18 5. Retailing Formats in India 23 6. Specialty stores 2
5 7. Major Industry Players 33 8. The growth Drivers 44 9. Swot of the Market 51
10. Challenges 55 11. Location Planning 58 12. Competitor Analysis 65 13. Futur
e Outlook 68 14. Merger and Acquisition 70
Growth of Retail Sector in India 15. Technology in retail 75 16. Government init
iatives and regulation 79 17. Research methodology 83 18. Research analysis 86 1
9. Conclusion 89 20. Consumer survey questionnaire 90 21. References 94
2
Growth of Retail Sector in India
Industry Overview
Industry analysis of the Indian retail sector:
Modern retailing has entered India in form of malls and huge complexes offering
shopping, entertainment, leisure to the consumer as the retailers experiment wit
h a variety of formats, from discount stores to supermarkets to hypermarkets to
specialty chains. However, kiranas still continue to score over modern formats m
ostly due to the convenience factor i.e. near to their house. This organized seg
ment typically comprises of a large number of retailers, greater enforcement of
taxation mechanisms and better labour law monitoring system. It's no longer abou
t just stocking and selling but about efficient supply chain management, develop
ing vendor relationship quality customer service, efficient merchandising and ev
en the labour class is also in the working process timely promotional campaigns.
The modern retail formats are encouraging development of well-established and e
fficient supply chains in each segment ensuring efficient movement of goods from
farms to kitchens, which will result in huge savings for the farmers as well as
for the nation. The government also stands to gain through more efficient colle
ction of tax revenues. Network marketing has been
3
growing quite fast and has a few large players today. Gas stations are seeing ac
tion in the form of convenience stores, ATMs, food courts and pharmacies appeari
ng in many outlets. In the coming years it can be said that the hypermarket rout
e will emerge as the most preferred format for international retailers stepping
into the country. Estimates indicate that this sector will have the potential to
absorb many more hypermarkets in the next four to five years
List of retailers that have come with new formats:
Retailer Formats Shoppers’ Stop mall Crossword shop Piramyd mall, Food retail Pant
aloon Hypermarket Current Format New
Department Store
Quasi-
Large Bookstore
Corner
Departmental Store
Quasi-
Own brand store
Subhiksha Supermarket considering moving to self service Globus fashion stores D
epartment Store Small
Traditionally, the kirana retailing has been one of the easiest ways to generate
self-employment, as it required minimum investment in terms of land, labour and
capital. These store are not affected by the modern format of retailing. In ord
er to keep pace with the modern formats, kiranas have now started providing more
value-added services like stocking ready to cook vegetables and other fresh pro
duce. They also provide services like credit, phone service, home delivery etc.
The organized retailing has helped in promoting several niche categories such as
packaged fruit juices, hair creams, fabric bleaches, shower gels, depilatory pr
oducts and convenience and health foods, which are generally not found in the lo
cal kirana stores. Looking at the vast opportunity in this sector, big players l
ike Reliance has announced its plans to become the country s largest modern reta
iners by establishing a chain of stores across all major cities. Apart from metr
o cities, several small towns like Nagpur, Nasik, Ahmedabad, Aurangabad, Sholapu
r, Kolhapur and Amravati has seen the expansion of modern retails. Small towns i
n Maharashtra
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are emerging as retail hubs for large chain stores like Pantaloon Retail because
many small cities like Nagpur have a student population, lower real estate cost
s, fewer power cuts and lower levels of attrition. However, retailers need to ad
just their product mix for smaller cities, as they tend to be more conservative
than the metros. In order for the market to grow in modern retail, it is necessa
ry that steps are taken for rewriting laws, restructuring the tax regime, access
ing and developing new skills and investing significantly in India.
India is rated as the most attractive retail markets
Country Risk Country 25%
Market Attractiveness 25%
Market Saturation 30%
Time Pressure 20%
Rank
India
Russia China Turkey Thailand Malaysia Egypt Brazil India’s Rank
62
52 68 51 64 70 51 52 24th
34
58 40 56 41 49 35 56 14th
91
71 53 66 59 58 85 57 1st
80
92 90 65 71 40 30 20 7th
1st
2nd 4th 9 12 18 25 29 1st
5
Growth of Retail Sector in India Socio demographic factors will lead to faster g
rowth of Organized retail in India: 100% 80% 60% 40% 20% 0% 1991 0-19 Yrs 1996 2
0-34 Yrs 2001 35-54 Yrs 2006 55+ Yrs 2010E 47% 47% 45% 42% 39% 9% 19% 24% 10% 20
% 24%
9% 19% 25%
11% 22% 26%
12% 23% 27%
6
Entertainment Durable 10% 1% Home 3%
Pharma 2%
Food & Grocery 14%
Clothing and Textile 36%
Health & Beauty 1% Books, Music & Gifts 3%
Watch & Jewellery 17%
Footwear 13%
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ORGANIZED RETAIL
8
Growth of Retail Sector in India Emerging Retail Markets:
India, Russia, China and Vietnam top the list of the most attractive emerging ma
rkets for retailers investment in 2007, While India and Russia have held the to
p two spots since 2004, China s booming consumer spending, together with retaile
rs moving into second-tier cities, helped it rise to No. 3 from its No. 5 spot l
ast year, according to the 2007 Global Retail Development Index from management
consultant firm A.T. Kearney. The study based its results on four variables: co
untry risk , measuring political risk, debt and credit ratings; market attracti
veness , encompassing retail sales per capita, population, infrastructure and re
gulations; market saturation ; and time pressure . The higher the ranking, the
more urgency for retailers to enter the market, according to the study, which r
anks the top 30 emerging countries for retail development and focuses on mass-me
rchant and food retailers. "If you want to be an international player in retail,
these are the markets that demonstrate the characteristics (where) you can be s
uccessful," said Laura Gurski, a co-author of the study and partner in A.T. Kear
ney s consumer and retail practice. India has already attracted the attention of
global retailers like WalMart Stores Inc., which is working with India s Bharti
Enterprises to set up a joint venture for a cash-and-carry business. In India,
foreign multiple-brand retailers, which sell diverse brands under one roof, are
limited to cash-and-carry and franchise or license operations. "India s window o
f opportunity continues to be wide for retail investment and development," the r
eport said. "Once India s window closes for grocery retailers, there will be lit
tle opportunity for market domination in the main cities." The country s growing
population of young urban professionals with disposable incomes and the nouveau
riche has also made India attractive for luxury retailers. India has attracted
"the low end and the high end because of the breadth of the consumer segments th
at are available," said Gurski. When variables stay constant, Gurski said, do-it
-yourself, apparel and electronics retailers usually enter emerging markets some
two years after international grocers establish themselves. Middle Eastern coun
tries are also represented on the list, with Saudi Arabia ranking No. 10 India h
as emerged as the world s most attractive destination for mass merchant and food
retailing, maintaining its 2005 position in an annual study of retail investmen
t attractiveness among 30 emerging markets. India was given the top ranking in m
anagement consulting company AT Kearney s 2006 Global Retail Development Index (
GRDI). "The Indian retail market is gradually but surely opening up, while China
s
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market becomes increasingly saturated," said Fadi Farra, a principal in AT Kearn
ey s Consumer Industries and Retail Practice and leader of the GRDI study. Much
to the surprise of market observers, China was ranked fifth in this year s tally
, declining one more place since 2005. While China remains very attractive, the
market is becoming increasingly saturate as and United Arab Emirates No. 18. Gap
Inc announced last week it had struck a deal with two franchisees to open Gap s
tores in Saudi Arabia starting at the end of this year. Dubai has capitalized on
consumer desire for a more Western lifestyle and has established itself as a re
tail mecca, Gurski said. Despite its focus on luxury, Dubai is "just beginning t
o be populated by the bread-and-butter retailers of the United States and the We
stern world," she said. Retailers that have already established a presence in ma
jor Chinese cities like Shanghai and Beijing, or those that have been slow to ga
in a foothold there, are now looking at less developed markets in second-tier ci
ties, the study found. "If the markets are saturated, they re looking to make pr
ofits in the secondtier cities," Gurski said. But she cautioned that a separate
strategy is needed for the smaller markets since consumer tastes, ability to spe
nd and willingness to embrace new formats may be different than in larger urban
areas. International retailers rush to establish a presence and build market sha
re, the study reveals. According to the study, Asia with a large 40 per cent of
the top 20 markets has surpassed Eastern Europe as the dominant region for glob
al retail expansion. "The learning is that timing is the most important source
of competitive advantage for global and regional retailers in the globalization
race. Knowing when to enter emerging retail markets is the key to success," said
Farra. Powering Asia s charge are Vietnam, which has risen five places to third
place, and countries like Thailand, South Korea and Malaysia, all of which are
in the top 15, After topping the ranking for two consecutive years in 2003 and 2
004, Russia slipped to second place behind India last year and remained there in
2006 too.
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Origin of Retail Sector
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Early Trade:
When man started to cultivate and harvest the land, he would occasionally find h
imself with a surplus of goods. Once the needs of his family and local community
were met, he would attempt to trade his goods for different goods produced else
where. Thus markets were formed. These early efforts to swap goods developed int
o more formal gatherings. When a producer who had a surplus could not find anoth
er producer with suitable products to swap, he may have allowed others to owe hi
m goods. Thus early credit terms would have been developed. This would have led
to symbolic representations of such debts in the form of valuable items (such as
gemstones or beads), and eventually money.
HOW RETAIL DEVELOPED:
Peddlers and Producers:
The Retail Trade is rooted in two groups, the peddlers and producers. Peddlers t
ended to be opportunistic in their choice of stock and customer. They would purc
hase any goods that they thought they could sell for a profit. Producers were in
terested in selling goods that they had produced.
General Store:
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This division continues to this day with some shops specializing in specific are
as, reflecting their origins as outlets for producers (such as Pacific Concord o
f Hong Kong), and others providing a broad mix, known as General Store (such as
Casey s in the Midwest of the U.S.A.). Although specialist shops are still with
us, over time, the general store has increasingly taken on specialist products.
Customers have found this to be more convenient than having to visit many shops
thus the term "Convenience Store" has also been applied to these shops. As the p
opularity of general stores has grown, so has their size. This combined with the
advent of Self-Service has lead to the Supermarket, or Superstore.
Early Markets:
Over time, producers would have seen value in deliberately overproducing in orde
r to profit from selling these goods. Merchants would also have begun to appear.
They would travel from village to village, purchasing these goods and selling t
hem for a profit. Over time, both producers and merchants, would regularly take
their goods to one selling place in the centre of the community. Thus, regular m
arkets appeared.The First Shop : Eventually, markets would become permanent fixt
ures i.e. shops. These shops along with the logistics required to get the goods
to them were, the start of the Retail Trade.
The Birth of Distance Retailing:
Defined as sales of goods between two distant parties where the deliverer has no
direct interest in the transaction, the earliest instances of distance retailin
g probably coincided with the first regular delivery or postal services. Such se
rvices would have started in earnest once man had learned how to ride a camel, h
orse etc. When individuals or groups left their community and settled elsewhere,
some missed foodstuffs and other goods that were only available in their birthp
lace. They arranged for some of these goods to be sent to them. Others in their
newly adopted community enjoyed these goods and demand grew. Similarly, new sett
lers discovered goods in their new surroundings that they dispatched back to the
ir birthplace, and once again, demand grew. This soon turned into a regular trad
e. Although such trading routes expanded mainly through the growth of traveling
salesmen and then wholesalers, there were still instances where individuals purc
hased goods at long distance for their own use. A second reason that distance se
lling increased was through war. As armies marched through territories, they lai
d down communication lines stretching from their home base to the front. As well
as garnering goods from whichever locality they found themselves in, they would
have also taken advantage of the lines of communication to order goods from hom
e.
Origins of Retail
It is likely that, as markets became more permanent fixtures they evolved into s
hops. Although advantageous in many respects, this removed the mobility that a p
eddler or traveling merchant may still have enjoyed. For some shopkeepers, it ma
de sense to obtain extra stock and open up another shop, most probably operated
by another
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family member. This would recover business from peddlers and create new business
and the greater volume would allow the shopkeeper to strike a better deal with
suppliers. Thus the retail chain would have started. Its thought that this proce
ss would have started in china over 2200 years ago with a chain of shops owned b
y a trader called Lo Kass.
The First Self-Service Store:
This all changed in 1915 when Albert Gerrard opened the Groceteria in Los Angele
s, the first documented self-service store. This was soon followed a year later
by the Piggly Wiggly® self-service store, founded by Clarence Saunders in Tennesse
e in the U.S.
Growth:
This new type of shopping was more efficient and many customers preferred it. Al
though personal service stores remain to this day, this new concept started a ra
pid growth of self-service stores in the United States. Other countries were slo
w to take up the idea, but there has been a steady rise in the global amount of
self-service stores ever since.
Efficiency
These entrepreneurs noticed that their staff had to spend a great deal of time t
aking grocery orders from customers. The groceries were stacked on shelves allow
ing customers to walk around and browse, collecting their shopping in a basket t
hat was supplied. The shopkeeper would only need to tot up the final bill at the
end of the process and transfer the goods from the basket to the customer and r
eceive payment.
From Family Business to Formal Structure:
Although retail chains would have been mostly run by families, as some chains gr
ew, they would have needed to employ people from outside of their family. This w
as a limiting factor as there would have been a limit to the amount of trusted n
on family members available to help run the chain. Another, even more definite l
imiting factor was the distance the furthest shop would have been from the origi
nal shop. The greater the distance, the more time and effort would have been nee
ded to effectively manage outpost shops and to service them with goods. There wa
s, therefore, a natural barrier to expansion. That was the case until transport
and communications became faster and more reliable. When this happened towards t
he end of the 19th century, chains became much bigger and more widespread. Many
of these businesses became more structured and formalized, leading to the retail
chain that we see today.
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15
16
Indian Retail Industry
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UNORGANISED RETAIL SECTOR:
Today, retailing doesn’t involve just dealing or marketing from shops, it includes
analyzing the market in an effort to provide reasonable prices together with an
array of options and experience to customers. The sole purpose of all this is r
etaining the brand loyalty of customers. Indian retail is currently a US$ 245 bi
llion market and is anticipated to extend to almost US$ 385 billion mark by the
next five years. The Indian retail sector is currently sporting a brand new look
and together with a 46.64 per cent three-year Compounded Annual Growth Rate (CA
GR), Conventional marketplaces are paving way for new shopping malls, the likes
of superstores, shopping plazas, supermarkets and brand label stores. Internatio
nal style shopping centers have started dotting the skyline of cities and smalle
r towns, acquainting the Indian customer to a unique shopping experience. The re
tail industry in India is split up into the unorganized and organized retail seg
ments. The unorganized retail sector includes the big, average and modest grocer
y stores and the chemist shops. A changeover is taking place from the convention
al retail sector to organized retailing. But the unorganized segment still domin
ates and leads the industry. By 2010, the Indian retailing sector is anticipated
to become an Rs12.5 trillion market. The share of organized retailing is suppos
ed to jump to about 10 per cent from the existing three per cent. The anticipate
d staggering growth in organized retailing provides an opportunity to expand the
market for both established and new players. According to the latest report Ind
ia Retail Sector Analysis (2006ñ07)I by RNCOS, the total retail market is primaril
y focused in rural regions, which makes up 55 per cent or US$ 165 billion of the
overall retail market as opposed to urban segment, which represents 45 per cent
or US$ 135 billion of the gross retail market. The rural market is spread over
627,000 villages, even though its centre of attention is focused around a core g
roup of 100,000 villages that makes up 50 per cent of the rural population.
India represents the most compelling international investment opportunity for ma
ss merchant and food retailers looking to expand overseas, according to manageme
nt consulting firm AT Kearney s 2005 Global Retail Development Index (GRDI), an
annual study of retail investment attractiveness among 30 emerging markets. Indi
a is rated as the fifth largest emerging retail market and is seen as a potentia
l goldmine. Driving global brands into India is the greatly improved investment
climate due to the recent relaxation of direct ownership restrictions on foreign
retailers. The country s retail market totals $330 billion, is vastly underserv
ed and has grown by 10 per cent on an average over the past five years. The mess
age for retailers on India is clear – move now or forego prime locations and marke
t positions that will soon become saturated. Global retailers that missed opport
unities to capture first-mover advantage in China will make up for it in India.
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Though India has more than five million retail outlets, they are greatly unorgan
ized. There is no supply chain management perspective. In fact, out of the entir
e retail sector in India, the organized sector is only 25 per cent and the rest
is unorganized. 96 per cent of the retail outlets are smaller in area than the s
tandard norms. The retail industry is divided into organized and unorganized sec
tors. Organized retailing refers to trading activities undertaken by licensed re
tailers who are registered for sales tax and income tax. These include corporate
backed hypermarket and retail chains and so on. Unorganized retailing is the tr
aditional low-cost shops, handcarts and pavements and is by far the prevalent fo
rm of trade in India. The efficiency of organized sector in retailing is manifes
ted in some of the newer supermarkets in urban/metropolitan India – the produce is
cleaner, fresher, well packed and often cheaper than the local shopkeeper. This
is possible because of the far more efficient distribution system, which organi
zed retail chains are employing, by cutting the layers of middlemen involved. Th
ere are other benefits too, of transforming the unorganized retail sector into a
n organized sector. Firstly, a number of new jobs will be created, far better pa
id than the underage labor working in the local shops. Secondly, the benefits to
the producer and consumer through better prices and lesser wastage; throwing up
exportable surpluses, which will also benefit the economy as a whole. Thus one
can see that allowing FDI in retailing is beneficial to all the stakeholders inv
olved
The Big Bazaars and Spencer’s, the huge unorganized retail sector is finally begin
ning to see the merit of logging on, even if at a model scale. Taxation policies
also push you to automate and the push is even harder for those looking to expa
nd beyond their single store existence. Though it’s early days yet to measure it p
enetration in the unorganized retail industry, interest levels are surely raisin
g fast. “It’s good to at least answer their questions. Though the interest is more w
ith retailers who register good sales and volumes. Software available to the ret
ailers is ShawMan’s RetailMagiK, which takes care of the front-end store needs, as
well as the back-end warehouse requirements. “It would surely help the unorganize
d sector to get into technologies like bar-coding, which will make their operati
ons more efficient. Some other features are a user-defined billing screen and di
scount with control mechanism from the headoffice, delivery order management, ba
tch control and quick information search, among others. The product is a simple
to use. The screen design and the functionality are designed in such a way that
the user need not press too many keys to get things done,” says Khushroo Bagwadia,
business development manager, Shawman Software. To begin with, most retailers l
ook at decent entry-level solutions starting at Rs 25,000. However, there are ch
eaper quick-fix solutions available too. One can even deploy a computer and star
t with
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financial accounting programmers like Microsoft Excel, FoxPro and Tally. Small r
etailers seem next in line and vendors are also warming up to the opportunity. A
t the low-end however, smart inexpensive solutions are the need of the hour. And
solutions providers like Microsoft, Polaris and Shawman are now working on deve
loping smart tools for the retail enthusiasts. For small players with just one s
tore, the investment on retail solutions go really low, anywhere between Rs 10,0
00 to Rs 25,000. Most of the time these solutions are developed by local firms,
who at times compete with the big names in the industry. According to Oberoi of
Polaris, generally the mom-and-pop stores like to go for technology, which will
get their work done at a reasonable cost. They avoid the high-end technology, an
d consider these as frills. “They are not even bothered about upgrading, so the ch
eap systems are more than welcome. These solutions might not work for the mid-si
zed retailers with five stores, as then one need to scale it up and take care of
inventory and supply chain management,” he says. Comparing the case with China, V
edamani suggests India is on the right track. “In China, we find the organized sec
tor to be 20-23% of the total industry. Here, the technology has advanced in pha
ses, and so is the case in India.
Format
Description
The Value Proposition
Branded Stores
Complete range available for a Exclusive showrooms either owned or franchised ou
t given brand, certified product by a manufacturer. quality Greater choice to th
e consumer, Focus on a specific consumer need, carry most of comparison between
brands is the brands available possible Large stores having a wide variety of pr
oducts, organized into different departments such as One stop shop catering to v
aried/ clothing, house wares, furniture, appliances, toys, consumer needs. etc.
Specialty Stores
Department Stores
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Supermarkets Extremely large self-service retail outlets One stop shop catering
to varied consumer needs
Stores offering discounts on the retail price through Discount Stores selling hi
gh volumes and reaping economies of Low Prices scale Hyper- mart Larger than a s
upermarket, sometimes with a Low prices, vast choice available warehouse appeara
nce, generally located in quieter including services such as parts of the city c
afeterias. Small self-service formats located in crowded urban Convenient locati
on and extended areas. operating hours. Enclosure having different formats of in
-store Variety of shops available to each retailers, all under one roof. other.
Convenience stores
Shopping Malls
Formats adopted by the Retail Players in INDIA.
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Retailer
Original formats
Supermarket (Foodworld) Department Megastore) Store (Piramyd
Later Formats
Hypermarket (Spencer s)Specialty Store (Health and Glow) Discount Store (TruMart
)
RPG Retail Piramal s
Pantaloon Retail Department Store (Pantaloon) K Raheja Group stop) Tata/ Trent L
andmark Group Others
Small format outlets (Shoppe) Supermarket(FoodBAZAR) Hypermarket (Big Bazaar) Ma
ll (Central) Department Store (shopper s Specialty Store (Crossword) Department
Store (Westside) Department Store (Lifestyle) Supermarket Hypermarket (TBA) Hype
rmarket (Star India Bazaar) Hypermarket (TBA)
Discount Store (Subhiksha, Margin Free, Apna Bazaar), Supermarket (Nilgiri s), S
pecialty Electronics
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Retailing formats in India
1. Malls: The largest form of organized retailing today. Located mainly in metro
cities, in proximity to urban outskirts. Ranges from
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60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping experience
with an amalgamation of product, service and entertainment, all under a common
roof. Examples include Shoppers Stop, Pyramid, Pantaloon. 2. Specialty Stores:
Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crosswor
d, RPG s Music World and the Times Group s music chain Planet M, are focusing on
specific market segments and have established themselves strongly in their sect
ors. 3. Discount Stores: As the name suggests, discount stores or factory outlet
s, offer discounts on the MRP through selling in bulk reaching economies of scal
e or excess stock left over at the season. The product category can range from a
variety of perishable/ non perishable goods. 4. Department Stores: Large stores
ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Furth
er classified into localized departments such as clothing, toys, home, groceries
, etc 5. Department Stores:
Departmental Stores are expected to take over the apparel business from exclusiv
e brand showrooms. Among these, the biggest success is K Raheja s Shoppers Stop,
which started in Mumbai and now has more than seven large stores (over 30,000 s
q. ft) across India and even has its own in store brand for clothes called Stop!
. 6. Hypermarts/Supermarkets:
Large self service outlets, catering to varied shopper needs are termed as Super
markets. These are located in or near residential high streets. These stores tod
ay contribute to 30% of all food & grocery organized retail sales. Super Markets
can further be classified in to mini supermarkets typically 1,000 sq ft to 2,00
0 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. havin
g a strong focus on food & grocery and personal sales. 7. Convenience Stores:
These are relatively small stores 400-2,000 sq. feet located near residential ar
eas. They stock a limited range of high-turnover convenience products and are us
ually open for extended periods during the day, seven days a week. Prices are sl
ightly higher due to the convenience premium.
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Growth of Retail Sector in India 8.
MBO’s :
Multi Brand outlets, also known as Category Killers, offer several brands across
a single product category. These usually do well in busy market places and Metr
os.
SPECIALITY STORES
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Food retail :
Food dominates the shopping basket in India. The US$ 6.1 billion Indian foods in
dustry, which forms 44 per cent of the entire FMCG sales, is growing at 9 per ce
nt and has set the growth agenda for modern trade formats. Since nearly 60 per c
ent of the average Indian grocery basket comprises non-branded items, the brande
d food industry is homing in on converting Indian consumers to branded food.
The mobile revolution:
The retail market for mobile phones -- handset, airtime and accessories -- is al
ready a US$ 16.7 billion business, growing at over 20 per cent per year. In comp
arison, the consumer electronics and appliance market is worth US$ 5.6 billion,
with a growth rate that is half of the mobile market.
Kids retail:
When it comes to Indian children, retailers are busy bonding--and branding: Mona
lisa, the Versace of kids is coming to India. Global lifestyle brand Nautica is
bringing Nautica Kids. International brand Zapp tied up with Raymond to foray in
to kids apparel. Disney launched exclusive chains which stock characterbased st
ationery. Pantaloon s joint venture with Gini & Jony will set up a retail chain
to market kids apparel. Swiss kidswear brand Milou is collaborating with Tirupu
rbased Sreeja Hosieries. Turner International India Pvt Ltd. will launch Cartoon
Network Townsville and Planet POGO--two theme parks designed around its channel
s--in the National Capital Region. Sahara One Television has also signed a Memor
andum of Understanding to source content from Spacetoon Media Group, Middle East
s largest kids entertainment brand for animation and live action content. Lead
ing the kids retail revolution is the apparel business, which accounts for almo
st 80 per cent of the revenue, with kids clothing in India following internatio
nal fashion trends. According to research
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firm KSA Technopak, the branded segment comprises US$ 701.7 million of the total
kids apparel market-size of over US$ 3 billion. Industry experts say kids ret
ailing will touch annual growth of 30-35 per cent. Toys, stationary, sportswear,
outerwear, tailored clothing, eyewear, watches, fragrance, footwear, theme park
s, TV channels… the segment is growing rapidly at 10 per cent per annum. Margins a
re in the range of 20-25 per cent (for dealers and distributors), while companie
s enjoy an average gross margin of about 10 per cent.
Agricultural retail:
Agriculture across India is heralding the country s second Green Revolution. 14
states, including Maharashtra, Punjab, Andhra Pradesh and Rajasthan amended the
Agricultural Produce Marketing Committee (APMC) act this year, along the lines o
f the Model APMC Act, 02, which allows farmers to sell their produce directly t
o buyers offering them the best price. Agricultural sectors such as horticulture
, floriculture, development of seeds, animal husbandry, pisciculture, aqua cultu
re, cultivation of vegetables, mushroom under cultivated conditions and services
related to agro and allied sectors are open to 100 per cent FDI through the aut
omatic route. For its e-Choupal scheme, ITC built internet kiosks in rural villa
ges so farmers can access latest information on weather, current market prices,
foods-in-demand, etc. With a US$ 5.6 billion, multi-year investment in agricultu
re and retail, Reliance Retail will establish links with farms on several thousa
nd acres in Punjab, West Bengal and Maharashtra. FieldFresh, planning to become
India s first large-scale exporter of produce, will annually pay farmers over US
$ 30,000 to lease land for vegetables, to hire tractors and to pay their workers
. Besides a five-year program with the Punjab government to provide several hund
red farmers with four million sweet-orange trees for its Tropicana juices by 200
8, PepsiCo--with agriculture exports worth US$ 40 million--also introduced farme
rs to high-yielding basmati rice, mangoes, potatoes, chilies, peanuts, and barle
y for its Frito-Lay snacks. Export potential and a rapidly growing domestic dema
nd for reliable produce from new supermarket chains is driving change. With 77 p
er cent of India s population relying on agriculture for a living, improved effi
ciency and new markets can benefit a large number of people.
International retailers :
The Australian government s National Food Industry Strategy and Austrade initiat
ed a test marketing food retail in India wherein 12 major Australian food produc
ers have tied up with India-based distributor AB Mauri to sell their products di
rectly at retail outlets. The largest-ever 150-member British business delegatio
n in India committed investments in the areas of food processing, agri retail
27
and manufacturing. It is also likely to press for the liberalisation of sectors
like financial & legal services and retail. US-based home delivery and logistics
company, Specialised Transportation Inc, will enter the Indian market through a
strategic alliance with Patel Retail, a subsidiary of Patel Integrated Logistic
s. Among other big international players, Wal-Mart has announced its plans for I
ndia in partnership with Bharti, Tesco is sure to try again, and Carrefour too m
ight finally find the right partner.
Supermarkets:
Large self service outlets, catering to varied shopper needs are termed as Super
markets. These are located in or near residential high streets. These stores tod
ay contribute to 30% of all food & grocery organized retail sales. Super Markets
can further be classified in to mini supermarkets typically 1,000 sq ft to 2,00
0 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. havin
g a strong focus on food & grocery and personal sales. Supermarkets are relative
ly new entrants in the market. They are so called pioneers in organized food ret
ailing and go by the western model in look and feel and format. This is what eve
rybody means when they say organized food retailing.
Franchise outlets:
28
Like Tommy Hilfiger and Wal Mart, other US retailers are firming up their India
entry strategies and if they are already in, they are undergoing rapid expansion
. Fashion brands DKNY is also al set to foray into the Indian fashion Industry t
hrough a franchisee agreement with Indian company, S. Kumar Starbucks recently e
xpressed their interest in entering Indian company
Like Tommy Hilfiger and Wal-Mart, other US retailers are firming up their India
entry strategies and if they are already in, they are undergoing rapid expansion
. Fashion brand DKNY is also all set to foray into the Indian fashion Industry t
hrough a franchisee agreement with Indian company, S Kumar’s.Starbucks recently ex
pressed their interest in entering India through the franchise route, like their
AmericanF&B counterparts Pizza Hut, Subway, and the very successful McDonald’s. M
cDonald’s has major expansion plans lined up; in the next 3 years, it plans to ope
n another 100 outlets in cities across India.
Hypermarket:
A very large commercial establishment that is a combination of departmental stor
e and a supermarket. The specific features of a hypermarket are the wide range o
f goods offered, quality service, quality display of goods on the shelves and co
mplex systems providing for customers loyalty. Hypermarket is known for a wide r
ange of goods offered. It consist of dozens of thousands of items, while similar
goods can be offered in several forms. In order to work with such an assortment
it is necessary to group it into categories and sub categories that would unite
goods according to this or that criteria.
Shopping Malls:
The new shopping malls that have been expanding their footprint across Indian ci
ties are well designed, built on international formats of retailing and integrat
ed with entertainment and restaurants to provide a complete family experience. O
ver 300 malls are expected to be built over the next two years and most Indian c
ities with over a million populations will be exposed to this modern method of r
etailing.
Shopping malls have existed in India since several decades but were designed and
built to house several shops in a single facility. These malls also known as Sh
opping Arcades offered only rows of shops, most of which were small stores that
promised bargains for their various wares. These Shopping Arcades tried to maxim
ize on their store space and did not offer any areas for recreation and entertai
nment.
29
The present day malls are a creation of the past few years post 2000. They are d
esigned professionally using a lot of international experience and combine shopp
ing with a lot of brand building, recreation, food and entertainment. Malls also
have a large format store that serves as their anchor for shopping and a promin
ent restaurant that anchors the food needs of visitors. Most malls also feature
a multiplex cinema that offers entertainment to the visitors of the mall. Finall
y the mall has large atria and open spaces to allow visitors and families to han
g-out.
30
Organized Sector
Retail
31
Product Segments:
The organized retail business in India is very small. This is despite the fact t
hat India is one of the biggest markets. Retail business contributes around 10-1
1 per cent of GDP. India also has the largest number of retailers, about 12 mill
ion, though they are mostly small. Most of the organized retailing in the countr
y has just started recently, and has been concentrated mainly in the metro citie
s. Organized retailing in India has a huge scope because of the vast market and
the growing consciousness of the consumer about product quality and services. Or
ganized retail only accounts for 3% of the total retail industry as yet and is e
stimated to grow to $64 billion by the year 2015. As a result, the retailing spa
ce in the country will also rise by 15-20% by 2010. 50 million sq ft of quality
space under development 7 major cities to account for 41 million sq ft developme
nt 300 malls, shopping centre and multiplexes under construction To open 35 hype
rmarkets, 325 large department stores, 1500 supermarkets and over 10,000 new out
lets To add US $ 10 billion of business to organized retail. ASSOCHAM president,
Anil K Agarwal says:” The organized sector retailing is all set to grow at much f
aster speed than unorganized sector and the higher growth speed will alone be re
sponsible for its higher market share which has been projected for $17 billion b
y 2010-11. Cities and metropolis in which retailing will show booming prospects
include Mumbai, Delhi, Chennai, Kolkata, Bangalore and Kanpur, said Agarwal addi
ng that the popular mode adopted for building shopping malls in these cities wil
l be based on build, operate, lease and sell basis". The 4 major organized retai
l sectors are Food & Grocery, Clothing, Consumer Durables and Books & Music. In
2003-04, private consumption expenditure in India amounted to Rs 1,690,000 crore
s (USD 375 billion) of which, retail sales constitute about 61% (USD 230 billion
).In terms of penetration by the organized retail sector, footwear is the highes
t category, followed by clothing. Footwear is driven by the dominance of home –gro
wn players like Liberty as well as the 15% market share that MNC retailer Bata C
ommands. Foreign Presence, especially through the franchisee route, e.g. Adidas,
Reebok, Nike etc. adds to this slice of the pie. Franchisee activity in this ca
tegory, especially in Tier II Cities, is pegged to rise.
32
Estimated Growth in Organized Retail
2004 Large Segments Other Segments 1,924 1,315
2009 5,024 2,645 422 8,091
CAGR (%) 21% 15% 12% 18%
Non-store 239 Retailing Total Organized 3,478 retail The Four Large Segments: Fo
od -Chain Stores -Single Large Stores Clothing -Manufacturer retailers -Chain st
ores -Single Large Stores Consumer durables Manufacturer retailers -Chain stores
-Single Large Stores Book and Music -Chain Stores -Single Large Stores 391 326
65 1,075 293 315 467
1,624 1,462 162 2,266 590 852 824
33% 35% 20% 16% 15% 22% 12%
359 141 98 120
822 284 298 240
18% 15% 25% 15%
97 54 43
310 202 108
26% 30% 20%
33
Retail is amongst the fastest growing sectors in the country. Indiaranks First,
ahead of Russia, in terms of emerging markets potential in retail and is deemed
a ‘Priority’ market for International retail.
34
Major Industry Players
Nanz in North India, Nilgiris in the South, Pantaloon in the East and Crossroad
in the West were the pioneers of the retail revolution in India. Nanz faced seve
ral obstacles in their business and had to finally down their shutters. Nilgiris
, due to some strange reason, did not see any logic to expand beyond the souther
n frontiers. Pantaloon went to scale up and become bigger and bigger to form the
Future Group, that is now omnipresent in almost all formats right from small gr
oceries to e-tailing. Crossroads in Mumbai imparted some valuable lessons to the
ir parent, the Piramyd Group, who has since then gone on an expansion drive with
other formats of retailing in different cities.
35
The big players in Indian retail landscape now are the Future Group, Shoppers St
op, Westside, Subiksha and RPG Spencer. The newcomers who are knocking at the ga
tes are Reliance Retail, Bharti Walmart and Aditya Birla Trinethra. Here, we int
end to do a brief profiling of the major players in order to understand the reta
il business in a better manner. 1 The Future Group
The Future Group, which was earlier known as PRIL (Pantaloon Retail India Limite
d) began as a trouser manufacturer in the mid 1980s. The Future Group is divided
into six verticals – Future Retail, Future Capital, Future Brands, Future Space,
Future Media and Future Logistics. The Future Group started operations in the mi
d 1987s by incorporating the company as Manz Wear Private Limited. The company w
ent on to manufacture ready made trousers under the “Pantaloons” brand name. It came
out with a public issue in 1991 and later changed their name to Pantaloon Fashi
ons (India) Limited (PFIL). The first exclusive men’s store called Pantaloon Shopp
e was inaugurated in 1992. Pantaloons went for a franchisee route to expand the
number of retail outlets and by 1995, it had reached to a crucial number of 70.
The first departmental store called Pantaloons was opened in Kolkata in 1997 wit
h an investment of Rs 0.7 million. The store was a success and recorded revenues
of Rs 100 million within the first year of operations. In 1999, the company’s nam
e was changed to Pantaloon Retail (India) Limited (PRIL). The success of Pantalo
ons departmental stores encouraged PRIL to come up with other retailing formats
such as “Big Bazaar” to retail low cost general merchandising, and “Food Bazaar” to reta
il food products. As of 2005, the Future Group has 3.5 million sq ft of retail s
pace and over 100 stores across 25 cities in India. It employs more than 12,000
people and has a customer base of more than 120 million. Kishore Biyani, the pro
moter of the group who likes to address himself as “Chief Knowledge Officer” has pla
ns to launch 18 formats and over 3,340 stores, thereby turning the Future Group
into a US$7 billion company with over US$1 billion in profits by the year 2010.
36
2
Shoppers Stop
Shoppers’ Stop, promoted by the real estate group K Raheja, was one of the first m
overs to have set up a large retail outlet in New Delhi with international ambie
nce. Shopper’s Stop Ltd now has a considerable presence all over the country with
overr 7 lakh square feet of retail space and stocks over 200 brands of garments
and accessories. The stores are spread all over India with presence in Mumbai, D
elhi, Bangalore, Hyderabad, Jaipur, Pune , Kolkata, Gurgaon, Chennai & Ghaziabad
. Shoppers’ Stop is also very well known for having pioneered several quality reta
iling concepts in India like CROSSWORD, HyperCITY and Mothercare. They are the o
nly retailer from India to become a member of the prestigious Intercontinental G
roup of Departmental Stores (IGDS). Shoppers’ Stop is positioned as a family store
delivering a complete shopping experience. With its wide range of merchandise,
exclusive shop-in-shop counters of international brands and world-class customer
service, Shoppers’ Stop brought international standards of shopping to the Indian
consumer providing them with a world class shopping experience. Shoppers’ Stop’s co
re customers represent a strong SEC A skew. They fall between the age group of 1
6 years to 35 years, the majority of them being families and young couples with
a monthly household income above Rs. 20,000/- and an annual spend of Rs.1,50,000
/-. A large number of Non - Resident Indians visit the shop for ethnic clothes i
n the international environment they are accustomed to.
The stores offer a complete range of apparel and lifestyle accessories for the e
ntire family. From apparel brands like Provogue, Color Plus, Arrow, Levi’s, Sculle
rs, Zodiac to cosmetic brands like Lakme, Chambor, Le Teint Ricci etc., Shoppers’
Stop caters to almost every lifestyle need. Shoppers Stop also retails its own
line of clothing namely Stop, Life , Kashish, Vettorio Fratini and DIY. The merc
handise at Shoppers’ Stop is sold at a quality and price assurance backed by its g
uarantee stamp on every bill.
37
Shoppers’ Stop’s customer loyalty program is called “The First Citizen”. The program off
ers its members an opportunity to collect points and avail of innumerable specia
l benefits. Currently, Shoppers’ Stop has a database of over 2.5 lakh members who
contribute to nearly 50% of the total sales of Shoppers’ Stop. The Organisation, i
n 2000, along with ICICI ventures also acquired the reputed bookstore, “Crossword”,
which offers the widest range of books along with CD-ROM, music, stationery and
toys. Services like Dial-a-book, Fax-a-book and Email-a-book enable customers to
shop from their homes. Crossword currently has 18 Stores. Realising the role of
IT way back in 1991, Shoppers’ Stop was among the first few retailers to use scan
ners and barcodes and completely computerise its operations. Today it is one of
the few stores in India to have retail ERP in place, which is now being integrat
ed with Oracle Financials and the Arthur Planning System, the best retail planni
ng system in the world. With the help of the ERP, they are able to replicate sto
res, open new stores faster and get information about merchandise and customers
online, which reduces the turnaround time in taking quick decision. Shoppers Sto
p has been very keen to understand the importance of distribution and logistics
in ensuring that merchandise is available on the shop floors. This has led the r
etail chain o streamline its supply chain. The company has developed process man
uals for each part of the logistics chain. These modules include vendor manageme
nt, purchase order management, stock receiving systems, purchase verification an
d inventory build up, generation and fixing of price and store tags, dispatch of
stocks to the retail floor and forwarding of bills for payment. Shoppers’ Stop ha
s a grand ambition to position itself as a global retailer. The company intends
to bring the world’s best retail technology, retail practices and sales to India.
Currently, they are adding 4 to 5 new stores every year.
3
Trent – Westside
Established in 1998, Trent operates some of the nation s largest and fastest gro
wing retail store chains. A beginning was made in 1998 with Westside, a lifestyl
e retail chain, which was followed up in 2004 with Star India Bazaar, a hypermar
ket with a large assortment of products at the lowest prices. In 2005, it acquir
ed Landmark, India s largest book and music retailer. In a recently signed deal,
Trent has agreed to anchor 12 malls set up by DLF Universal Ltd across the coun
try, at its Westside, Landmark and Star India Bazaar outlets. This amounts to ab
out 27 locations, totaling to about a million square feet of space. Trent retail
s garments and household accessories for men, women and children, cosmetics and
perfumes at Westside, food, beverages, health and beauty products, vegetables, f
ruits, dairy products, consumer electronics and household items at Star India Ba
zaar and books, music and stationery at Landmark.
38
Westside has 25 outlets across 17 cities in India offering a variety of designs
and styles in garments, footwear and accessories, as table linens, artifacts, ho
me accessories and furnishings. Well-designed interiors, sprawling space, prime
locations and coffee shops enhance the customers shopping experience. Trent als
o runs another chain of retail stores called Star India Bazaar. Launched in 2004
, Star India Bazaar provides a large assortment of high quality products made av
ailable at the lowest prices coupled with a unique shopping experience. Star Ind
ia Bazaar is located in Ahmedabad and offers a wide choice of staple food, bever
ages, health and beauty products, vegetables, fruits, dairy products, consumer e
lectronics and household items at the most affordable prices. Trent has also rec
ently acquired a 76 per cent stake in Landmark, one of the largest books and mus
ic retail chains in India. Landmark commenced its operations in 1987 with its fi
rst store in Chennai, and now has nine stores in the major metros of the country
. Earlier Landmark was focused on books, stationery and greeting cards. In 1996
it added music to its product portfolio and also started the trend of stocking c
urios, toys, music, CDs and other gift items.
4. Piramyd Piramyd Retail is part of the Piramal Group, which has presence in di
verse sectors spanning Pharmaceuticals, Textiles, Real Estate, Engineering, Fami
ly Entertainment and Retail with manufacturing operations in 19 locations across
five states and employing over 18,000 people. The promoters launched the appare
l business in 1999 under Piramyd Retail and Merchandising Pvt. Ltd. (PRMPL) whil
e its food; home & personal care businesses (FHPC) were housed under Crossroads
Shoppertainment Pvt. Ltd. (CSPL). As the apparel and food businesses individuall
y reached a critical mass the management merged the two companies into Piramyd R
etail Ltd. due to distant synergies in two businesses in March 2005. Pyramid als
o has a smaller format of stores called TruMart that caters to Food and Personal
Care products. Piramyd Retail currently has 5 Mega stores and 8 TruMart stores
mainly in Maharashtra . The company plans to increase these
39
numbers to 17 Mega stores and 69 TruMarts by 2008. The floor space is expected t
o be 5 times on successful expansion. The FHPC (Food & Personal Care) business i
s volume driven while the Lifestyle store is a margin driven business. Piramyd R
etail plans to increase the contribution of private labels from existing 7% to 1
820% of the revenues by 2010. Gross margins from private labels are over 40% and
hence the company is planning to increase this business. Most of the stores are
on the lease format and the company is prone to higher lease rentals due to the
overall increase in real estate prices. This may bring the profit levels down s
ubstantially. Piramyd Retail did have a first mover advantage in many locations
but it has actually failed to capitalise over this advantage. Its competitors li
ke Pantaloon, Shoppers Stop and Trent gained larger benefits of their far more a
ggressive business & marketing strategy in the retail space.
5.
Subiksha
The Chennai based Subiksha grocery chain runs around 200 outlets all over the co
untry and it’s current turnover stands at Rs 224 crores. Their target customer is
the middle income value conscious buyers. The main aim of Subiksha is to offer a
functional and transactional shopping experience. This retail chain has no qual
ms and spends almost no money on creating a pleasant shopping experience, and
40
all stores are non-air conditioned. There is no false roofing or sparkling vitri
fied tiles on the floor. A few years ago, Subiksha did not even offer shoppers s
elf service. The customer had to place an order at a computerized teller and the
goods were billed and delivered after cash is collected. Customers had to bring
their own carrybags or pay to buy them from the store. Subiksha even attempted
to charge the customers for home delivery. However, now Subiksha has slightly tw
eaked their business model in order to create a better appeal to customers who w
ere defecting to the competitors. The store formats are still small and nonairco
nditioned. But customers have the option to pick from shelf spaces. They also ge
t shopping bags and free home delivery. But the selling USP(unique selling propo
sition) remains the same --Subiksha tries to be as close to the customer as poss
ible and offers the lowest price and huge savings in comparison to competitors.
It’s slogan happens to be --- bachat mera adhikar hain (saving is my fundamental r
ight).
6.
RPG Spencer
RPG’s Spencer presently has 125 stores across 25 cities covering a retail trading
area of half a million square feet and with a clientele of 3 million customers a
month. Spencer s has a national footprint with seven hypermarkets, three superm
arkets and 70 daily use outlets, called Dailies. All the newly opened Spencer s
stores stock every conceivable product that is required by a household on a dail
y basis. At Spencer s Daily shoppers can get fresh fruits, vegetables, fast-movi
ng consumer goods, household items, groceries, with regular offers and discounts
. Spencer s outlets are divided in to three retail formats. These are, Spencer s
Hyper, the over 25,000-sq ft hypermarkets stocking over 25,000 items. The 8,000
sq ft to 15,000-sq ft mini hyper stores, branded as Spencer s Super and the dail
y purchase 4,000-sq ft to 7,000-sq ft Spencer s Daily for groceries, fresh food,
chilled and frozen products, bakery and weekly top up shopping.
41
7.
Reliance Retail
On June 26, 2006, Mukesh Ambani, Chairman and Managing Director, Reliance Indust
ries Limited, announced a Rs 25,000-crore investment in the retail sector. Relia
nce Retail started it’s retail operation with “Reliance Fresh”, a grocery store that s
ells vegetables, fruits, personal care items and other food products. Soon, thes
e retail outlets will also be selling apparel and footwear, lifestyle and home i
mprovement products, electronic goods and farm implements and inputs. They will
also offer products and services in energy, travel, health and entertainment. In
addition to this, partnerships would be developed to bring the best of global l
uxury brands to India as well. Reliance Retail plans to extend it’s footprint to c
over 1,500 Indian cities and towns with outlets of a varied format, a mix of nei
ghborhood convenience stores, supermarkets, specialty stores and hypermarkets. R
eliance also plans to open restaurant outlets, financial services marts and tour
ism counters within it’s stores. Mukesh Ambani’s ultimate ambition seems to be to cr
eate the Indian equivalent of Wal-Mart by scaling up the business to unprecedent
ed heights to reach every nook and corner of the country. With it’s retailing vent
ure, Reliance expected a revenue target of US $20 billion through it’s retail oper
ations by 2010. Over a span of five years, RRL expects a 20% return-on-investmen
t. The first store christened “Reliance Fresh” opened in November 2006 at Hyderabad.
Within a few months they have now opened stores in Mumbai, Pune and Ahmedabad a
nd plans foray into other cities on a rapid scale.
42
8.
Bharti Wal-Mart
Bharti Retail (Pvt.) Ltd. unveiled the roadmap for its retail venture on 19th Fe
bruary, 2007 envisaging an investment of $2.5 billion with expectation of revenu
e of $4.5 billion (about Rs. 20,000 crore) from this business by 2015. The first
retail outlet is expected to open somewhere in the month of August . Bharti’s pla
n is to invest $2.5 billion by 2015 and open stores across all major cities. Thi
s investment would be only for setting up front-end stores. The modalities for i
ts back-end linkage, including its joint venture with the world s largest retail
er Wal-Mart, are in the process of being worked out. A high-level team from Wal-
Mart was visited India in the later part of February to work out the details of
the back-end chain. While Bharti would manage front-end of the retail venture, W
al-Mart would be
43
involved in the back-end, including logistics, supply chain and cashand-carry, h
e added. The JV was presently scouting for 10 million sq. ft. of retail space, w
hich would include hypermarkets, supermarkets and convenience stores and would p
rovide employment to about 60,000 people. The company would open multi-format re
tail outlets in all cities with a population of about one million. Bharti is now
conducting a massive consumer survey to take a final decision on branding and p
romotional campaign. However, Bharti and Wal-Mart have been facing stiff opposit
ion from the left parties and other political outfits who fear that the entry of
the Bentonville giant will make life difficult for the small grocers and create
massive unemployment. They also expect Wal-Mart to take a tough stance on lower
ing prices and force farmers to sell their produce at lower rates. A lurking fea
r of monopolistic regime in the retail sector is also enhancing their fears. Bot
h Bharti and Walmart are presently having a tough time in convincing the ministe
rs, politicians, agriculturists, the NGOs and other pressure groups that their b
usiness model would serve to work in the best interests of all the stakeholders.
9.
Aditya Birla – MORE
The Aditya Birla Group is India s first truly multinational corporation. Global
in vision, rooted in values, the Group is driven by a performance ethic pegged o
n value creation for its multiple stakeholders. A US$ 24 billion conglomerate, w
ith a market capitalization of US$ 23 billion and in the League of Fortune 500,
it is anchored by an extraordinary force of 100,000 employees belonging to over
25 different nationalities. Over 50 per cent of its revenues flow from its opera
tions across the world.” Our mission is to change the way people shop. We will giv
e them more.” says Mr. Kumar Mangalam Birla, Chairman, Aditya Birla Group. The mor
e. for you
44
advantage: more. promises a world-class pleasurable shopping experience to India
n consumers in their very own neighborhood. more. Quality, more. variety, more.
convenience and more. value are the four delivery cornerstones of the more. chai
n of supermarket stores. more. MORE. Value MORE. promises best in market pricing
. Linking up directly with farmers to source fresh fruits, vegetables and staple
s ensure great quality as well as great price. Add to this, the membership progr
am Club more. which provides convenience, customized shopping solutions and savi
ngs, and the more. value promise becomes all the more evident. More. Is an inspi
rational brand for an inspirational country. We have a bright and committed, ent
husiastic team that represents the best experience from India and globally. MORE
. also has a range of products from its own stable available across value, premi
um and select ranges. The products have been quality-checked and are available i
n attractive packaging at competitive prices. To avail additional benefits, at n
o extra charge, customers can also enroll for the membership program Club more.
10. VISHAL RETAIL :
Vishal is one of fastest growing retailing groups in India. Its outlets cater to
almost all price ranges. The showrooms have over 70,00 products range which ful
fills all your household needs, and can be catered to under one roof. It is cove
ring about 1282000 sq. ft. in 18 state across India. Each store gives you intern
ational quality goods and prices hard to match. The cost benefits that is derive
d from the large central purchase of goods and services is passed on to the cons
umer. What started as a humble one store enterprise in 1986 in Kolkata(erstwhile
, Calcutta) is today a conglomerate encompassing 51 showrooms in 39 cities. Indi
a’s first hyper-market has also been opened for the Indian consumer by Vishal. Sit
uated in the national capital Delhi this store boasts of the singe largest colle
ction of goods and commodities sold under one roof in India. The group’s prime foc
us is on retailing.
45
The Vishal stores offer affordable family fashion at prices to suit every pocket
. The group’s philosophy is integration and towards this end has initiated backwar
d integration in the field of high fashion by setting up a state of the art manu
facturing facility to support its retail endeavors. Company has already tied up
for 5-lakh sq ft space and is looking for more. Company will come up with 32 new
stores this year. Company is doing research on more formats. Company is looking
for opportunities of expansion in the South. Contribution of apparels business
at 53% may slightly come down to 50%. India is a big country and there is huge s
pace for four-five big retail players. Vishal can always sustain growth in this
big market. Company can sustain margins as it is going for backward integration.
Currently manufacturing contributes 10% of the business, which in the next two
to three years, will go up to 25%. Company is increasing its focus on the non-ap
parel and FMCG segment. The current share of FMCG at 15% could go up to 20-25%.
Apparel sales currently at 63% in the next 2-3 years should come down to 50% as
the company is now also focusing on different segments. With growth in volumes,
the cost of sourcing will come down in the near future. Company will venture whe
rever it gets real estate space. Currently, it has very little space in the sout
h India. Eventually, it will have a pan-India set up.
11. METRO – CASH & CARRY INDIA
METRO Group today, is the third largest trading and retailing group in the world
. The company employs over 2,50,000 staff in 30 countries. In the year 2005 METR
O Group had generated sales of over €55.7 billion; 53% of total sales came from ou
tside Germany. METRO Cash & Carry started operations in India in 2003 with two D
istribution Centres in Bangalore. With this METRO introduced the concept of Cash
& Carry to India. These Centres offer the benefit of quality products at the be
st wholesale price to over 150,000
46
businesses in Bangalore. METRO offers assortment of over 18000 articles across f
ood and non food at the best wholesale prices to business customers such as Hote
ls, Restaurants, Caterers, Food and Non-food Traders, Institutional buyers and p
rofessionals. METRO s Cash & Carry business model is based on a Business to Busi
ness (B2B) concept and focuses on meeting all the needs and requirements of busi
ness customers. It is a modern format of wholesale trading, catering only to bus
iness customers.
12. Viveks- The Unlimited Shop
Vivek Limited is a professionally managed public limited company carrying three
retail brands - Viveks, Jainsons, Premier and continuously adding to the formida
ble strength of 1000 employees. Vivek Ltd is the largest consumer electronics &
home appliances retail chain in India. Viveks popularized several brands by crea
ting visibility and have the distinction of being market leaders and trendsetter
s with continuous support from the principal companies. Viveks evolved its strat
egies to suit the larger scene where there was a stigma attached to borrowing. V
ery few hire purchase options were available and hence Viveks started Vivek Hire
Purchase and Leasing Ltd to finance consumer durables, which enhanced the core
retailing business also.Viveks grew from 3 stores to more than 52 stores and tur
nover increased to over Rs. 350 crores (USD 80 million) and also become a public
limited company from a family run enterprise. In this process, 14 store Jainson
s was bought over in 1999, 2 store Premier in 2001 and Spencers in 2002 and have
recently absorbed Spencers into the Premier brand. With the liberalization of e
conomy and other changes in the global scene, Viveks streamlined the marketing a
nd advertising activities and shopping ambience was improved.
47
THE GROWTH DRIVERS
48
Drivers of Retail Industry
• • •
The Demography Dynamics: Approximately 60 per cent of
Indian population below 30 years of age. Double Incomes: Increasing instances of
Double Incomes in most families coupled with the rise in spending power. Plasti
c Revolution: Increasing use of credit cards for categories relating to Apparel,
Consumer Durable Goods, Food and Grocery etc. Urbanization: increased urbanizat
ion has led to higher customer density areas thus enabling retailers to use less
er number of stores to target the same number of customers. Aggregation of deman
d that occurs due to urbanization helps a retailer in reaping the economies of s
cale. Covering distances has become easier: with increased automobile penetratio
n and an overall improvement in the transportation infrastructure, covering dist
ances has become easier than before. Now a customer can travel miles to reach a
particular shop, if he or she sees value in shopping from a particular location.
•
•
DRIVERS FOR GROWTH:
Indian consumers are rapidly evolving and accepting modern formats overwhelmingl
y. Retail Space is no more a constraint for growth. India is on the radar of Glo
bal Retailers and suppliers / brands worldwide are willing to partner with retai
lers here. Further, large Indian corporate groups like Tata, Reliance, Raheja, I
TC, Bombay Dyeing, Murugappa & Piramal Groups etc and also foreign investors and
private equity players are firming up plans to identify investment opportunitie
s in the Indian retail sector. The quantum of investments is likely to sky-rocke
t as the inherent attractiveness of the segment lures more and more investors to
earn large profits. Investments into the sector are estimated at INR 20 – 25 bill
ion in the next 2-3 years, and over INR 200 billion by end of 2010. Stocks in th
e retail sector are also becoming increasingly attractive from an investor s poi
nt of view. Successful development of value based concepts as well as developmen
t of retail space in smaller cities and towns shall drive the organized retail i
nto the next levels of cities. Retailers have responded to this phenomenon by in
troducing contemporary retail formats such as hypermarkets and supermarkets in t
he new pockets of growth. Prominent ‘tier-II cities and towns which are witnessin
g a pick-up in activity include Surat, Lucknow,
49
Dehra Dun, Vijaywada, Bhopal, Indore, Vadodara, Coimbatore, Nasik, Bhubaneswar,
Varanasi and Ludhiana among others. With consumption in metros already being exp
loited, manufacturers and retailers of products such as personal computers, mobi
le phones, automobiles, consumer durables, financial services etc are increasing
ly targeting consumers in tier II cities and towns. In addition, petro-retailing
efforts of petroleum giants scattered through out the country s landscape have
also ensured that smaller towns are also exposed to modern retailing formats. On
the supply side, mall development activity in the small towns is also picking u
p at a rapid pace, thereby, creating quality space for retailers to fulfill thei
r aggressive expansion plans. Thus, the ‘retail boom , 85% of which has so far bee
n concentrated in the metros is beginning to percolate down to smaller cities an
d towns. The contribution of these tier-II cities to total organized retailing s
ales is expected to grow to 20-25%.
GROWING CONSUMER CLASS: Favorable demographic and psychographic changes relating
to India s consumer class, international exposure, availability of increasing q
uality retail space, wider availability of products and brand communication are
some of the factors that are driving the retail in India. Over the last few year
s, many international retailers have entered the Indian market on the strength o
f rising affluence levels of the young Indian population along with the heighten
ed awareness of global brands and international shopping experiences and the inc
reased availability of retail real estate pace. Development of India as a sourci
ng hub shall further make India as an attractive retail opportunity for the glob
al retailers. Retailers like Wal-Mart, GAP, Tesco, JC Penney, H&M, Karstadt-Quel
le etc stepping up their sourcing requirements from India and moving from third-
party buying offices to establishing their own wholly owned / wholly managed sou
rcing & buying offices shall further make India as an attractive retail opportun
ity for the global players. Manufacturers in industries such as FMCG, consumer d
urables, paints etc are waking up to the growing clout of the retailers as a shi
ft in bargaining power from the former to the latter becomes more discernible. A
lready, a number of manufacturers in India, in line with trends in developed mar
kets, have set up dedicated units to service the retail channel. Also, instead o
f viewing retailers with suspicion, or as a ‘necessary evil as was the case earli
er, manufacturers are beginning to acknowledge them as channel members to be par
tnered with for providing solutions to the end-consumer more effectively. The ne
xt level of opportunities in terms product retail expansion lies in categories s
uch as apparel, jewellery and accessories, consumer durables, catering services
and home improvement. These sectors have already witnessed the emergence of orga
nized formats though more players are expected to join the bandwagon. Some of th
e niche
50
categories like Books, Music and Gifts offer interesting opportunities for the r
etail players. Indian consumer goods market is expected to reach $400 billion by
2010. India has the youngest population amongst the major countries. There are
a lot of young people in India in different income categories. In India they do
not have to face this dilemma largely because rapid urbanization, increase in de
mand, presence of large number of young population, any number of opportunities
are available . The bottom line is that Indian market is changing rapidly and is
showing unprecedented consumer business opportunity. Indian consumer class can
be classified according to the following criteria:
1. Income 2. Socio-Economic status 3. Age demographics 4. Geographical dispersio
n
1. Income Classification
Consumer Classes The Rich The Climbers The Aspirants The Destitute Total
Annual Income in Rs. Rs. 215,000 and more Rs. 22-45,000 Rs. 16-22,000 Below Rs.
16,000
1999 1.2 32.5 54.1 44 33 164.8
2004 2.0 54.6 71.6 28.1 23.4 180.7
2009 6.2 90.9 74.1 15.3 12.8 199.2
Change 416% 179% 37% -65% -61% 21%
The Consuming Class Rs 45- 215,000
Source: NCAER 2. Socio-Economic Classification: In addition to income classifica
tion and consumer classification, Indian households can also be segmented accord
ing to the occupation and education levels of the chief earner of the household
(the person who contributes most to the household expenses). This is called as S
ocio-Economic Classification (SEC), which is mainly
51
used by market planners to target market before launching their new products. SE
C is made to understand the purchase behavior and the consumption pattern of the
households 3. Age Demographics: India is a very young nation, if compared with
some advanced and developed countries. Nearly two- thirds of its population is b
elow the age of 35, and nearly 50 % is below 25. Age distribution if Indian popu
lation (In Millions) Year/ 2006 Age Below 4 yrs 5-14 yrs 15-19 yrs 20-34 yrs 35-
54 yrs 55 & above Total 113.5 221.2 122.4 279.1 239.2 118.7 1094.1 108.5 239.1 1
09.0 246.8 207.3 101.7 1012.4 119.5 233.2 90.7 224 178.1 88.7 934.2 2001 1996
Marketers explain that the boom in the consumption level and leisure related exp
enditure is because of this young population. It will have a significant impact
over the consumer goods market. In addition to that, it is expected that this wi
ll generate trade opportunities and continuous investment in the economy. There
is huge potential for further consumption of goods and services due to the incre
ased level of disposable income. The expenditure on essential goods and services
has a higher share in developing countries as compared with that of developed c
ountries. Consumption Trends Food Essentials 45.68%
Essential Services (water, power, rent, and 10.1% fuels) Clothing Footwear Medic
are Transport & Communication Recreation, Education, and Culture Home Goods 4.9%
0.63% 4.25% 14.51% Less than 4% 3.25%
4. Geographical Dispersion of market potential
52
There is large difference in economic prosperity levels among several states in
India, linked to the wealth creation from trade, industrial, and agricultural de
velopment. There are poor districts in many states, classified according to thei
r market potential. India has 500 districts, out of which 150 districts (categor
y A) and next 150 districts (category B) account for 78% and 15% of the national
market potential respectively. Remaining 200 districts (category C) are backwar
d and account for only 7% of national market potential. Category C districts hav
e 40% of the geographical share. GROWING ECONOMY Potential for all Formats to Th
rive : Most of the global powerhouses in the retailing sector such as WalMart, C
arrefour, Tesco etc have adopted multi-format and multiproduct strategies in ord
er to customize their product offering for distinct target segments. Similar tre
nds Identifying the future The important thing is to identify the future that h
as already happened - Peter Drucker
The important and distinctive are always the result of changes in values, percep
tions and goals of people. Identify the changes that have already happened, expl
oit the changes that have already occurred and use them as opportunities. Dr Wil
liam T Wilson, Chief Economist for Keystone India ñ a Chicago-based firm providing
cross-border trade facilitation and asset management services in US are likely
to be exhibited in India as all formats present prospects for growth, the Report
says. Further, with the emergence of larger store formats like superstores and
hypermarkets in countries like UK, France, Germany, Spain since the 1980s and Ea
stern Europe more recently, traditional food retailers have been able to stock m
ore extensive non-food ranges. In fact, Tesco, UK s leading grocer, has become t
he number one apparel retailer in the Czech Republic and also a major player in
Hungary apart from being one of the fastest growing clothing retailers in the UK
. Together with its rival, Wal-Mart-owned ASDA, Tesco is one of the food sector
s most successful exponents of clothing in Europe DISPOSABLE INCOME There is no
point complaining, accusing or justifying that retailing business is only for la
rger players and multinational retailing companies. That s total rubbish and rat
her an assumed limitation. Recent research finding is that by the year 2010, Ind
ia will have at least three million people with an annual income of over Rs 4,00
0,000. Mind you, this is the official, declared and straight income meaning ther
e will be a considerable number of consumers with other sources of income! (I su
ppose). One could comfortably presume that one fourth of the three millions woul
d reside in Bangalore. Considering the third successive year with great economic
growth in India, it is obvious that we shall have more
53
people with higher disposable income. With higher disposable income, the discern
ing Indian consumers are not going to be conscious about price alone. This emerg
ing consumers would want something special, unique, different, better, customize
d and more. Find the synonyms and transliterate these into value offerings in yo
ur field of business and you have a gold mine, especially when you manage to con
nect with the customers value and perception and India, said that after signifi
cant accelerations in economic growth recently, India s economy is expected to e
qual or surpass Japan as the world s third largest sometime in the year 2006. Dr
Wilson also added that India s economy measured in PPP (purchasing power parity
) terms will eclipse the US$ four trillion mark in 2006, making it equal to or g
reater than Japan s. Indian consumers are getting richer noticeably leading to h
igher disposable money. RISING INCOMES Over the past deacde , India’s middle and H
igh Income group has grown at a rapid pace of over 10% per annum . Though this g
rowth is most evident in urban areas, it has also taken place in rural markets.
Further, the number of house holds earning above Rs.150,000 per annum is about 3
0 million today and is expected to grow to 80 million by 2007. This growing high
-income population is triggering the demand for consumer goods, leading to the p
roliferation of Higher quality/higher priced products.
EXPLOSION OF MEDIA There has been an explosion in media as well during the past
decade . Kick-started by the cable-explosion during the gulf war, television has
accelerated to a pint where there are more cable connections than telephones in
Indian homes and more than 100 channels are being aired at all times .This medi
a bombardment has exposed the Indian consumer to the lifestyles of more affluent
countries and raised their aspirations from the shopping experience – they want m
ore choice , value , experience and convenience.
Private Labels
Brands, store labels, private label brands, store brands. These terms may seem t
o be synonyms of each other. However, when it comes to retailing, each of these
terms has a different meaning. While we all know what a brand is, a private labe
l and a store label are different from any other brand because they are product
lines that are owned, controlled, merchandised and sold by a specific retailer i
n its own stores. Among Indian retailers, Stop, Life and Kashish by Shoppers St
op, and ETC by Ebony are private label brands. According to Synovate, is the mar
ket research arm of global communications specialist Aegis Group, the growth of
private labels is about 2-3 times more than that of advertised brands .Among the
product lines launched by retailers, the ones whose nomenclature is the name of
the store itself are called store labels. Foodworld and Nilgiris have launched
their own brand of supermarket products under the "Foodworld" and "Nilgiris" bra
nd names. There is a distinct advantage in naming the brand launched by the reta
iler after the same name as that of the store. But at the same time,
54
the store label also carries the burden of not only the success of the brand, bu
t also the failure, which may have a negative rub-off effect on the retailer s i
mage. A store brand on the other hand is a brand name the retailer carries. Each
retailer, because of its unique offering, is a brand in itself, which is what t
he store brand signifies. Nallis, Modern Bazaar and The Home Store are store bra
nds since each of them stands for a certain retail offering. Retailers are now a
ggressively moving into developing their own private labels as it not only makes
economic sense in the form of retailers achieving higher margins, it also helps
them to plug gaps in their product portfolio. For instance, in menswear, retail
ers say that gross margins on branded products vary from 25-38 per cent. Compare
d to that, the retailers can earn whopping margins of around 55-60 per cent on p
rivate labels. Private label products contribute to a retail brands differentiat
ion. A retailer can achieve differentiation through a large (but not necessarily
exclusive) portfolio of private label products. Service adds to the differentia
tion, and together with a unique product range, results in a strong retail brand
. They are not perceived as being interchangeable with similar private label pro
ducts launched by other retailers (unlike manufacturers of branded products, whi
ch are the same regardless of the retailer). Introduction of an in house brand o
f products helps the retailer to have means with which they can compete head on
with the other branded products. An established private label brand provides the
retailers a platform to negotiate with suppliers, and the retailers are thus se
lf-sufficient in a certain category. They have more control over the merchandise
and are able to make the required changes and modifications to suit the changin
g customer profile much quicker. This brings about a more consistent and accepta
ble product portfolio, which also helps reduce mark-downs. A retailer can create
a stronger emotional connect with the consumer as the experience is not just th
e store experience but also the product experience. An outside brand could be pu
rchased from any outlet. This is not so in the case of private labels, so the pr
oduct experience keeps bringing the consumer back The question is: why would ret
ailers want to get into the trouble of launching an own brand when there are "n"
number of local, regional and national brands for practically all kinds of prod
ucts? The reasons are multifold.
55
SWOT MARKET
OF
THE
56
57
STRENGTH 1) 2) 3) 4) 5) 6) 7) Organized retailing at US$ 3.31 billion, growing a
t 8%. 2nd largest contributor to GDP after agriculture at 20%. Pattern of consum
ption changing along with shopping trends. A Growing population will translate t
o move consumers. Consumer spending increasing at 11% annually. Almost 25 millio
n sq. ft. retail space available. Paradigm shift in shopping experience for cons
umers pulling in more people. 8) Most of the entrants to organized retail come f
rom 3 main categories, and have ventured into retail as their business extension
. • Real Estate Developers • Corporate Houses • Manufacturers/Exporters
WEAKNESSES 1) 2) Shortage of quality retail spaces at affordable rates. Governme
nt regulations on development of real estate(Urban Land Ceiling Act)
3) Need to provide Value for Money-squeezing margins
4) 5) Lack of industry status. Retail revolution restricted to 250 million peopl
e due to monolithic urban-rural divide. 6) Footfalls not a clear indicator of sa
les as actual consumers lower in number. 7) Lack of huge investments for expansi
on
58
OPPORTUNITIES:
1)
Increasing revolution.
urban
population-more
participants
in
retail
2) 3)
Increase in consuming middle class population. Social factors like dual househol
d income has enhanced spending power.
4)
Spends
moving
towards
lifestyle
products
and
esteem
enhancing products. 5) Availability of old industrial lands-prime real estate lo
cked in sick industrial units. 6) Average grocery spends at 42% of monthly spend
s-presents a huge opportunity. 7) Increase in use of credit cards.
THREATS:
1) 2) 3)
Rising lease/rental costs affecting project viability. FDI restrictions in the r
etail sector. Poor monsoons and low GDP Growth could affect consumer spending dr
astically.
4)
Archaic labor laws are a hindrance to providing 24/7 shopping experience.
5)
Personalized service offered by Mom-&-Pop stores.
59
6) Unavailability of qualified personnel to support exponential growth in retail
. 7) Differentiate taxation laws hindering expansion.
CHALLENGES
60
Retailing in its traditional form has been existing in India for decades. But re
tail management in the true sense (as retailing is known in the west) is a relat
ively new discipline in India. It is unlike other forms of marketing and the tra
ditional marketing rules do not apply. In retailing, as in service, there is a f
ifth P added to the existing 4 of marketing, the People. Therefore the contact p
erson (whom the consumers interact with) becomes a doubly important entity. The
most important difference is that where marketing has the classic 4 Ps (Product,
Promotion, Price and place), in retailing a fifth P, people is added which is c
ritical. They are critical to a service business like retailing both as employee
s who execute the business and the customers with whom retailers must interact.
The following are the key challenges of retailing: • Large transactions: Retailers
need to handle smaller transactions in large numbers and still be able to make
money. • Low price strategy: The Indian consumer being value-conscious, a key to s
uccess for many retailers is the ability to attract customers by offering low pr
ice guarantee. • Aggressive sales, discount and collection schemes (say, credit fa
cilities.) and thus keep the enthusiasm going. • Indian consumer behaviors - Retai
lers need to conduct MRs and behavioral studies into the Indian psyche simply be
cause he is so different from those in the west and in fact, different from othe
r Indian consumers. His shopping patterns need to be analyzed in detail.
61
• Location: A prime location in the city/town so a big plus. Things such as waitin
g and parking areas need to be taken care of. • Use of information technology (IT)
in developing a supply chain and integrating all the retailing processes from p
rocurement to after sales. As somebody rightly pointed out, India remains one of
the last frontiers of modern retailing. Conquering the retailing in India will
be a major challenge, given the complications that the unorganized sector poses
those of the supply chain and consumer behavior as well as the glaring complexit
ies of such a vast a market with all kinds of consumer segments thrown in. A wis
e retailing hawk would set up special cells; committees to track retailing indus
try throughout the country. Benchmarking the best in the country and seeing ones
elf as to where exactly he wants to be in the complicated perceptual map would b
e a fine starter. Any retail chain needs to experiment and reorient to cater to
the local needs and preferences. Given that these chains come with huge asset ba
ses and financing from their international operations, this is not a difficult t
ask. While Indian markets still beckon a large retail chain, the success of anyo
ne foraying into the land of snake-charmers and maharajas ultimately depends on
how well and in-depth understanding they have of the conditions, the people, the
supply Retailing in India chain dynamics, the poorer (but strong) unorganized c
ousins and of course, the local Gods!
HR… a critical business process:
The Industry is facing a severe shortage of talented professional, especially at
middle-management level. Areas gradually becoming critical are technology, supp
ly chain, business development, marketing, product development and research. Suc
cessful Indian retailers are creating a robust second and third level of managem
ent by hiring aggressively for these key roles. There is also an increase in num
ber of retail management programmes and institutes. This will bridge the gap in
availability of talented professionals at the middle and lower levels. There is
also an increasing trend towards hiring hotel management graduates in the retail
sector. The retail industry is expected to create 2 million jobs between now an
d 2010.However, talented professionals will put increased pressure on wage costs
. Therefore, operating margins, especially for mid-sized retailers will shrink.
There is also a huge risk for Indian retailers becoming a poaching ground for in
ternational retailers once they enter India.
An agile and adaptive supply chain is key
Logistical challenges, constant changes in consumer preferences and patterns, cr
owded marketplaces, efficient customer responsiveness and swiftly evolving retai
l environment in India. These factors pose a huge challenge for that all importa
nt key to
62
pushing growth in this kind of an environment- an efficient and adaptable supply
chain. In the last 2-3 years ,several retailers ranging from F&B operators to d
iscount clothing, have implemented Supply chain management (SCM) solutions to im
prove core business processes such as global sourcing,distribution,logistics,inn
ovation,transparency and visibility in financials and inventory, compliance and
management of point of sale(POS) data. Going ahead, India’s FMCG and retail sector
s are likely to see an increase in adoption of SCM. However, most Indian retail
players are under serious pressure to make their supply chains more efficient in
order to deliver the levels of quality and service that consumers are demanding
. As Indian and International retailers continue to grow their presence regional
ly, there will be a pressing need for a single, enterprise-wide IT platforms to
manage operations, which will become increasingly complex.
Fraud in retail is expensive
We feel that fraud in going to be one of the retail sector’s primary challenges in
the future. Fraud and theft, including employee pilferage, shoplifting, vendor
frauds and inaccuracy in supervision and administration costs the Indian retail
industry about Rs 550-600 crores every year. This is despite the fact that most
large modern format retailers use standard security features such as CCTV’s, POS s
ystems and anti shoplifting systems for greater control over fraud and theft. In
financial terms, cost of this fraud constitutes about 2% of the organized retai
l sector’s revenues. We believe that the implications and size of this loss will b
e more significant as retailers continue to scale up and increase product lines.
Improvement in infrastructure and logistics needed
India is a large and highly fragmented country, with 29 states and 18 officials’ l
anguages. A bulk of its population, 66.1%, lives in rural retail potential We fe
el that private logistics companies offering specialized
63
services, refrigerated transport and ware house facilities across the country, a
long with timely distribution of supplies to retail outlets will.
LOCATION PLANNING
64
TYPES OF LOCATIONS
A) High – Street Location: a. Very busy with high customer traffic. b. Has an arra
y of retail stores in small sizes. areas. The lack of adequate infrastructure ma
kes it virtually impossible to reach this virtually untapped market. Distributio
n, or lack of it, is a major hindrance for retailers in India. The lack of quali
ty infrastructure across the country and a non- existent distribution sector res
ults in inefficient logistics systems. Infrastructure is the weakest link in Ind
ia’s path to progress and there is urgent need to address issues plaguing this are
a. Urbanization is driving an increasing need to upgrade or create infrastructur
e facilities. An indicator of the urgent need for highway development, for insta
nce, is the fact that average daily traffic volume on highways of 39,000 Passeng
er car units (PCU’s) far exceeds the highway capacity of 15,000 PCU’s. Transport is
a major concern, with a deteriorating railway system and a limited highway netwo
rk .In contrast to the global standards, the average load carried by trucks in I
ndia around 7 tons_ is very low. However, the Indian Government is presently inv
esting heavily in the state highway system. This will help in an overall decline
in logistics a cost which is currently 10-12% of total GDP. 10,000 MW of power
needs to be added every year for next decade. Growth in air passenger traffic, e
stimated at 20% p.a. for next two years, necessitates quadrupling of airport cap
acities. Ports will witness 38% increase in tonnage in next -3 years and hence,
port infrastructure cannot be ignored. b. Has stores that are generally found in
clusters based on product categories. c. High real-estate rentals. Eg: Linking
road in Bandra, Brigade Road in Bangalore (B) Destination / Freestanding Locatio
n a. Does not have a high footfall rate (customer traffic needs to be pulled I t
hrough the store’s marketing efforts or products/services/process differentiations
)
b. May not be a commercial retail area at all. c. Low real-estate rentals. d. Ma
y have a large parking area. Eg :Phoenix Mills Compounds and Shopper’s Stop in Mum
bai.
65
(C) Shopping Centre/Mall Location a .Has an Existing mall traffic. b .Has a clea
n Environment. c. Has a designated parking area. d .Medium to High rental cost.
Eg: DLF Mall in Delhi, Crossroads in Mumbai
Location, store design and layout:
Once a geographical market has been chosen, the next step in formulating the ret
ail business plan is to select a site for the store. The importance of this deci
sion is summarized by a favorite saying of retailers: "There are three vitally i
mportant things in retailing location, location, and location." In assessing the
desirability of various available locations, note the positive and negative asp
ects of each. Once again, analysis of trends is important. No location is static
; it is either improving or declining in such things as traffic flow and potenti
al market area. Store design and layout of the store s interior and exterior hel
p determine the store s image and character. In planning a new store or remodeli
ng of an old one, there is plenty of room for creativity. This part of the plan
takes a lot of thought and consideration. Some bad decisions made in the plannin
g stage can be corrected, but mistakes made in the area of store design and layo
uts are usually quite costly to correct. Retailers can get specialized assistanc
e from merchandise suppliers, local architects, and store planning consultants.
Display windows, fixtures, lighting, and storage are examples of areas covered i
n this part of the retail business plan. Store layout involves such consideratio
ns as allocation of space, customer traffic flow throughout the store, and maxim
izing profit per square foot. Planning a retail business has several advantages.
A well thought out plan not only makes the best of the present, but also antici
pates future contingencies Retailing is a challenging and dynamic field. The ret
ailer draws on knowledge from such areas as marketing, psychology, finance, acco
unting and management. From the field of management, we learn that planning is o
ne of the most important functions of the retailer. It is a function often negle
cted under the pressure of day-today business activity, but it is so important t
hat the successful retailer must give it top priority. Retailers must decide how
to make the best use of limited resources, such as people, funds, and inventori
es. In order to use these resources in the most productive way, the retailer pla
ns for the future.
66
The most important planning occurs before a retail store even opens for business
. Careful planning at this time can greatly enhance a store s chances of success
. By gathering and synthesizing the relevant information into a retail business
plan, the retailer can make better decisions. A workable retail business plan sh
ould be detailed, specific, and in writing. Indeed, a major advantage of plannin
g is that it forces the retailer to put ideas in writing. Without planning, ther
e is no predetermined course of action, and with out some predetermined course o
f action, retailers do not know what to do, where to do, or why it should be don
e. They waste their own energies and the resources of the store. Planning involv
es selecting objectives and developing specific program’s, policies, and procedure
s for achieving them.
Steps in formulating the retail business plan:
Setting objectivesPlanning begins with objectives. Stores can have many differen
t objectives: survival, growth, market share increase, high return on investment
, and development of a good store image. Some objectives are more important than
others. Profit, of course, is a primary objective for any retail organization.
Social concerns, however, must often be given consideration, too, if the store i
s to be a "good citizen" of its business community Objectives are difficult to a
pply to real situations and decisions if they are stated in vague terms. An obje
ctive should establish a measurable goal - a yardstick to compare results with e
fforts. Goals or objectives such as "to increase sales by 18 per cent this year"
or "to break even in the first year of operation" are examples of clearly defin
ed and measurable objectives. They must be supported with concrete plans that ar
e specific for reaching these goals. In forming the retail business plan, be as
specific as possible. Remember to be customer-oriented while setting objectives;
it is one of the keys to successful retailing. Do not lose sight of these objec
tives once they are formulated. Schedule quarterly, or if appropriate, monthly r
eviews of progress. Revise and update your objectives periodically as well.
Financial planning:
Financial planning is an important part of the retail business plan. In fact, in
adequate financial planning is a frequent cause of store failure. Financial stat
istics on the type of business under consideration are often available from trad
e associations. This information can be invaluable to the manager in the initial
planning stages. The retailer must make a sales forecast, calculate a breakeven
point, and estimate the capital requirements of the business. Asset planning, a
nother essential part of financial planning, involves inventory, accounts receiv
able, equipment and fixtures, and cash. Often, these assets must be financed in
part with funds obtained from outside sources - banks, relatives, and so on.
67
Assessing available resources:
What are the strengths and weakness of the business? By assessing these factors,
a retailer can maximize the use of all available assets and can limit or elimin
ate the handicaps imposed by the inherent weakness of these resources. Experienc
ed, creative management is a strong resource. Sufficient working capital to meet
the costs of doing business the first year is another. At least as important as
knowing the strengths of the business is analyzing its weaknesses. Awareness of
weak areas is the first step in overcoming them. Some weaknesses can be overcom
e by hiring an outside expert in areas in which the retailer s knowledge and exp
erience are limited. Additional training and outside reading are other answers t
o many weak areas. A retailer with general retailing experience but little knowl
edge of, say, the shoe business, could benefit greatly by hiring experienced sho
e salespeople if she is planning to open a shoe store. A retailer who is weak in
the areas of financial planning and control needs to work closely with a good a
ccountant. Even during the planning stage, an accountant can be helpful in setti
ng up an appropriate bookkeeping system.
Assessing market potential
What type of customer, or what segment of the market, does the store cater to? I
s there enough demand for the products to provide sufficient sales volume? These
are some of the main questions the retailer tries to answer by assessing market
potential. The key factors in market assessment are: first, the number of peopl
e living in the trade area, and second, the buying power of these people. An ext
reme example of poor market assessment would be trying to sell expensive fur coa
ts in a poor mining town. Even the age distribution of the population can affect
a store s market potential. Assessing the competitive situation Competition is
a good thing. It leads to better products and services at lower prices. It can i
nspire a retailer to do a better job. However, numerous and / or aggressive comp
etitors are costly to the retailer in many ways. Price wars eat away profits. To
o many similar stores serving too few consumers cause the sales volume of each s
tore to suffer. For some types of stores, however, the best strategy can be to l
ocate as close as possible to the competition. Competing stores located in the s
ame area may increase customer traffic. Some cities, for example, have an area w
ith many antique shops. Customers are drawn to the area because of this convenie
nce, and each store s traffic helps the other stores. Retailers should not be af
raid of competition, but they should try to find a market where there is an unfi
lled demand for the type of store they are planning.
68
Other assessments: Local laws, tax rates, and the labour force are other areas t
hat can affect the retail store. The planner should investigate these uncontroll
able environmental factors. In this preliminary work, be aware of trends as well
. For example, demand for the products may look very promising in a certain area
, but the population of this area might be declining. On the other hand, an area
with slightly lower market potential at present could be growing very fast and
provide a better long-run market for a particular store. These assessments are o
ften difficult to make, but the effort put into planning at this stage will pay
off handsomely when store operations get under way. Location, store design and l
ayout: Once a geographical market has been chosen, the next step in formulating
the retail business plan is to select a site for the store. The importance of th
is decision is summarized by a favorite saying of retailers: "There are three vi
tally important things in retailing location, location, and location." In assess
ing the desirability of various available locations, note the positive and negat
ive aspects of each. Once again, analysis of trends is important. No location is
static; it is either improving or declining in such things as traffic flow and
potential market area. Store design and layout of the store s interior and exter
ior help determine the store s image and character. In planning a new store or r
emodeling of an old one, there is plenty of room for creativity. This part of th
e plan takes a lot of thought and consideration. Some bad decisions made in the
planning stage can be corrected, but mistakes made in the area of store design a
nd layout are usually quite costly to correct. Retailers can get specialized ass
istance from merchandise suppliers, local architects, and store planning consult
ants. Display windows, fixtures, lighting, and storage are examples of areas cov
ered in this part of the retail business plan. Store layout involves such consid
erations as allocation of space, customer traffic flow throughout the store, and
maximizing profit per square foot. Organization and supervision Planning is an
example of a management function. Other management functions performed by the re
tailer are organizing, staffing, leading, and controlling. By organizing, the re
tailer establishes relationships among people, materials, and other resources to
get a job done. Labour is organized and divided, and responsibility is delegate
d. Staffing entails the recruitment and selection of employees. It is a vitally
important function because the employees of a store represent that store to the
public. People can really be the most important asset of a retail firm. Every re
tailer is in a leadership position. Leadership means motivating employees to ach
ieve their maximum potential, while at
69
the same time accomplishing the goals of the organization. Because leadership me
ans understanding people, it is one of the most creative and challenging aspects
of a retailer s job. The retailer s professionalism and attitudes set the tone
for employees attitudes and performance. Controlling is the follow-up function
of retail management. Actual performance is compared with planned performance to
spot and evaluate deviations. Knowledge on buying For established retail operat
ions, past sales data are very helpful in knowing how much to buy. For a new ret
ail business, these past data are not available. However, if a sales forecast an
d desired inventory turnover rate have been determined, the beginning inventory
figure can be calculated. A balance between meeting customers needs and high in
ventory carrying costs must be found. Knowing how much to buy goes hand in hand
with knowing what to buy. Successful retailing involves having the right merchan
dise in the right place, at the right time, and at the right price for the custo
mer. Information from store records is a valuable aid in knowing what to buy. In
the absence of this information, an understanding of the target customer s shop
ping habits and motivations, is helpful. Information from suppliers can provide
valuable input for the store buyer. Once the inventory has been obtained, a unit
control system must be set up to keep track of the stock. Pricing The goals of
retail pricing are fourfold. First, the goods must sell at a satisfactory rate.
Second, inventory costs and expenses must be covered. Third, a desired profit mu
st be made, and fourth, prices should be fair to customers. There are different
pricing strategies for different types of stores, from the discount store to the
exclusive shop with quality merchandise and expanded customer services. Pricing
in retailing is both a science and an art. Retailers have special terms to desc
ribe various pricing operations, such as markup, markdown, and psychological pri
cing. Pricing is, naturally, closely related to financial planning. Advertising
and promotion A store s location, layout, design, and product lines affect its o
verall image. Advertising is another key element of the store s image in the min
ds of customers. Advertising can be thought of as communicating with customers.
The objective of an advertisement is to stimulate the customer to want what the
retailer has to offer, and to persuade the customer to take action to satisfy th
e stimulated want or need. Besides advertising, retailers send messages to custo
mers through personal selling, sales promotion, and packaging. Information chann
els beyond the direct control of the retailer are publicity and word-of-mouth co
mmunication.
70
By giving careful consideration to defining who the advertisement is directed at
(the "target customer"), retailers can get more mileage out of advertising spen
d. The content of an advertisement should focus on benefits desired by the targe
t customers. Sales promotion and display techniques are a major promotional tool
. Sales promotions can have various objectives, such as generation of immediate
sales, attracting customers to the store, and building goodwill. Window displays
can serve to attract customers, to show customers the kind of merchandise the s
tore carries, and to project the image of the store. Because window displays are
so visible, they should be given the attention, care, and creative input they d
eserve. Interior displays can be informative, can stimulate impulse buying, or c
an suggest uses of a product. In addition, they can enhance the store s image. O
ther sales promotion strategies include special events, sales, coupons, and trad
ing stamps.
Employee selection and training The salesperson is a communicator: This person t
ranslates product features into benefits and satisfactions for the customer. But
most important, the salesperson is the representative of the store to its custo
mers. The unique quality that distinguishes personal selling from other promotio
n activities is the opportunity for feedback between customer and salesperson. G
ood advertising and promotion can get people into a store. Good salespeople and
good value keep them coming back. The importance of employee selection and train
ing cannot be overstated. Many retailers are surprised to learn that monetary co
mpensation, although important to employees, is usually not their most important
concern. Fairness, security, honesty, and opportunity are often more important
than pay. Services An enlightened retailer realizes that the customer is the piv
ot around which all retailing activities revolve. This attitude is expressed to
the customer through shopping conveniences, services, employee attitudes, and fa
ir values. As part of the retail business plan, decisions must be made about the
types of services to be offered. Services, and handling of credit policies and
customer complaints, deserve the ongoing attention of the manager. Accounting an
d financial management Information and control play an important role in the int
ernal operation of a retail business. Good records are the basis for guiding and
controlling a retail business. They are the tools a manager uses to control inv
entory, expenses, and ultimately, profits.
71
Financial statements, such as balance sheets and income statements, are summarie
s of the financial strength and profitability of the retail business. They tell
how well a business is doing, and give evidence about the quality of management
decisions. Financial planning in the form of budgets helps retailers to spot pro
blems before they occur. Information One information tool in particular has been
a real boon to retailers, and that is the computer. More and better information
is available to the retailer now than ever before, because of computers. This m
eans that better and faster decisions can be made. Computers offer speed and acc
uracy of information processing that is especially helpful in inventory manageme
nt. Information is important for intelligent decision-making. Much of this infor
mation evolves from basic store records or is provided by a computer system. Ano
ther source of information for the retailer is marketing research, such as the m
arket assessment. Most of the research involved in formulating the retail busine
ss plan is in fact, marketing research. Research can also help answer questions
in such areas as pricing, promotion and distribution.
72
COMPETITOR ANALYSIS
The table below outlines some of the strategic moves being planned to change the
competitive structure of Retail business in India.
Early Birds
Retailer K Raheja Group Brands Shopper’s Stop, Crossword, Inorbit Mall Hyper City,
Café Brio/Desi Café Plans 310 Shoppers’ Stop Outlets by 2010, 60-70 new Crossword out
lets within two years, 100 Café Brio/ Desi Café and 14 new Hypercity Strengths Pulse
on customer tastes with vast local retailing experience Challenges Keeping up b
rand loyalty Threats
Could get bogged down positioning itse right
73
Future Group Pantaloon, Big Bazaar, Food Bazaar, Fashion Station, Blue Sky A sto
re a day for the next three to four years – 3,300 planned by 2010 Can evolve on va
st customer experience and existing models Expanding customer base, sourcing pro
ducts at cheaper rates
Straddling with too many retai formats
Tata Trent
Westside
Looking to register it’s presence in hypermarkets; currently operates 21 stores
Already has an established brand like Westside
Sprucing up product offerings, opening more outlets, and introducing new retail
formats
It’s smaller ret operations
RPG
Spencer’s, Music World
Expansion into other major cities at prime locations; BCities next on list
Still considered a southern brand
Establishing itself into newe regions, sourcing products at competitive prices
Source : Indian Management, Volume 46, Issue 1, January 2007, Page 16
Debutantes
Retailer
Reliance
Brands
Reliance Fresh
Plans
Plans to set up a range of different store formats, convenience stores and hyper
markets as well as create a back-end retailservices business
Strengths
Strong back end, nationwide fuel retailing platform
Challenges
Getting the retail portfolio right for Indian tastes
Threats
Product pricing, infrastructure, manpower, brands
74
Bharti Walmart Field Fresh Pan-Indian operations expected Bharti’s local expertise
and Wal-Mart’s back-end make it a lethal combo Wooing the price sensitive Indian
consumer Product pricing, shelf and overall offerings
In the Pipeline Retailer
Aditya Birla
Brands
Madura Garments, Birla Sun Life Insurance and Idea Cellular, Planet Fashion and
Trouser Town Easy Bill
Plans
To roll out it’s retail business within the next 7-8 months with a combination of
large and small stores
Strengths
Extensive experience in supply-chain management, vendor development with premium
brands like Louis Phillippe, Van Heusen and Allen Solly Strong background in se
veral manufacturing sectors; sound financial base
Challenges
Gaining a national footprint
Threats
Building retail formats from scratch
Hero Group
Floated Aero Infrastructure Ltd announcing foray into retail. Currently developi
ng two industrial parks at Haridwar and Uttaranchal
Creating retail operations from scratch
Little experience in everyday consumer retailing.
75
Future Outlook
Retailing in India is gradually inching its way toward becoming the next boom in
dustry. The whole concept of shopping has altered in terms of format and consume
r buying behavior, ushering in a revolution in shopping in India. Modern retail
has entered India as seen in sprawling shopping centers, multi-storied malls and
huge complexes offer shopping, entertainment and food all under one roof. The I
ndian retailing sector is at an inflexion point where the growth of organized re
tailing and growth in the consumption by the Indian population is going to take
a higher growth trajectory. The Indian population is witnessing a significant ch
ange in its demographics. A large young working population with median age of 24
years, nuclear
76
families in urban areas, along with increasing workingwomen population and emerg
ing opportunities in the services sector are going to be the key growth drivers
of the organized retail sector in India. Retail and real estate are the two boom
ing sectors of India in the present times. And if industry experts are to be bel
ieved, the prospects of both the sectors are mutually dependent on each other. R
etail, one of India’s largest industries, has presently emerged as one of the most
dynamic and fast paced industries of our times with several players entering th
e market. Accounting for over 10 per cent of the country’s GDP and around eight pe
r cent of the employment retailing in India is gradually inching its way toward
becoming the next boom industry. As the contemporary retail sector in India is r
eflected in sprawling shopping centers, multiplex- malls and huge complexes offe
r shopping, entertainment and food all under one roof, the concept of shopping h
as altered in terms of format and consumer buying behavior, ushering in a revolu
tion in shopping in India. This has also contributed to large-scale investments
in the real estate sector with major national and global players investing in de
veloping the infrastructure and construction of the retailing business. The tren
ds that are driving the growth of the retail sector in India are
• • • •
Low share of organized retailing Falling real estate prices Increase in disposab
le income and customer aspiration Increase in expenditure for luxury items (CHAR
T)
Road Ahead; Plans of Large Retailers
•
Reliance Retail: investing Rs. 30,000 crore ($6.67 billion) in setting up multip
le retail formats with expected sales of Rs. 90,000 crore plus ($20 billion) by
2009-10. Pantaloon Retail: Will occupy 10 mn sq.ft retail space and achieve Rs.9
,000 crore-plus ($2 bn) sales by 2008. RPG: Planning IPO will have 450-plus Musi
c World, 50-plus Spencer s Hyper covering 4 million sq.ft by 2010. LIFESTYLE: In
vesting Rs.400 crore-plus ($90 million) in next five years on Max Hypermarkets &
value retail stores, home and lifestyle centres. Raheja s: Operates Shoppers S
top, Crossword, Inorbit Mall, and Home Stop formats. Will operate 55 "Hypercit
y" hypermarkets with US$100 million sales across India by 2015. Piramyd Retail:
Aiming to occupy 1.75 million sq.ft retail spaces through 150 stores in next fiv
e years.
• • •
•
•
77
Merger and acquisition activity
78
India witnessed a record number of M&A deals in the first half of 2006, which we
re collectively worth USD 25.6 billion. A significant number of deals have being
carried out in the Indian retail sector in the past few months in order to acqu
ire a larger share in the growing domestic market and to compete against the pro
spective global and domestic players.13 The table below shows some recent deals
that have taken place in the Indian retail sector:
Year 2005 2005 2005 2005
Acquired/ JV Company/ Acquirer Target Liberty Shoes Future group
Consideration Nature of Business Stake (US$ million) Retail (Footwear) Retail cl
othing 51% 68% 3 5 14 24
Indus - League Clothing Future group Odyssey India Landmark Deccan Chronicle Hol
dings Tata Trent
Leisure retail chain (books, music, 100% toys) Books, music, accessories 74%
2006
Bistro Hospitality Indus League clothing
TGI Friday s (a subsidiary of Carlson Restaurant (Food Restaurant Worldretail) w
ide) Etam group, France Lingerie and women s wear retailing
25% 50%
N/A
2006 (Future group company)
8 (JV)
Source: Price water house Coppers, Asia-Pacific M&A bulletin, mid year 2006.
79
Technology – A Critical Tool
Out-of-stocks are the most noticeable problem for consumers — during normal shoppi
ng experiences eight per cent of intended purchases are not on the shelf and whe
n it comes to promotional offers, these out-of-stocks rise to 15 per cent. Faced
with an empty shelf, consumers often do not substitute the same brand. They sim
ply keep their money and leave the store in search of another product. Let s tak
e the example of a $25-billion retailer: lost sales due to out-of-stocks added u
p to nearly 1 per cent of total sales — a mind-boggling figure of $1 billion! Reta
ilers across the nation are unable to predict and master the demand-supply gap a
s a result of orthodox tools to measure changing consumer behavior. Considering
the Indian retail industry grew by 300 per cent in the last 12 months and supply
chain accounts for 50 per cent of costs, retailers are now looking at ways to e
nhance the supply chain and predict consumer-buying habits. High consumption pat
terns driven by disposable incomes, lifestyle shifts and availability of a wide
range of brands are dictating the high-growth of different retail formats in Ind
ia. No wonder, Indian retail players are under tremendous pressure to make the s
upply chain more efficient in order to deliver quality, selection and service to
consumers. Retailers are now looking at creating an efficient supply-chain via
a concept popularly referred to as consumer driven replenishment. What this impl
ies is placing the consumer in the centre of the replenishment process, to allow
retailers to be able to use real-time data to sense and respond to changing con
sumer demands. To implement consumer driven replenishment, one needs to first co
llect and analyze preshopping signals, which often go unnoticed today. For examp
le, consumers may speak to store associates or call centre agents to enquire on
a particular product. As this often leads consumers to purchase products, retail
ers and supply chain partners can use existing consumer touch points to map cons
umers buying preferences. For example, Spanish retailer Zara furnishes its stor
e employees with PDAs to help them order out-of-stock items the minute the custo
mer brings it to the assistant s attention. This information captured via the PD
As dictates next-day replenishments at the stores. In another instance, Wal-Mart
leverages weather data for replenishment. When the world s largest retailer kno
ws about an approaching hurricane or snowstorm, the stores in that area are doub
ly stocked up with essential items such as bottled water and batteries. This dat
a helps Wal-Mart align inventory with increased demand to cover unnatural events
and prevent out-of-stock situations. Consumer driven replenishment will change
the way the industry handles forecasting and replenishment. The major business c
hange will start at the business process level; to respond quickly to consumer d
emand, retailers and their supply chain partners must redesign the current busin
ess process. All supply chain partners will become part of a cohesive architectu
re, enabling information to flow freely from retail functions to suppliers. Inev
itably, consumer driven replenishment within the Indian retail sector will be re
flected in rapid growth in sales of supermarkets, department stores and hypermar
kets. And with this increased competition, retailers will look at various opport
unities to maximize customer satisfaction. These will include initiatives to str
eamline internal back end costs so as to translate savings onto customers, maxim
izing mind share in a cluttered market and delivering the best in store experien
ce. Keeping these deliverables in mind, some of the other key modules that the s
tore of the future will look to implement will include:
Store connectivity:
Stores will invest in building wide-area networks (WANs) and virtual private net
works (VPNs) to access information across various sites. With visibility into ev
ery resource, stores will take advantage of up-to-the-minute data at the right t
ime for increased strategic flexibility and informed decisionmaking for managing
inventory. RFID: Widely regarded as the key defining technology to hit the reta
il sector, RFID tags on each piece of merchandise will enable companies to monit
or their inventory at a more detailed level than
ever before. Executives will identify when problems occur by monitoring signal r
eaders installed at key junctures, such as loading docks, receiving points, dist
ribution centers, backrooms and store shelves. These readers in turn will be net
worked to a centralized monitoring system that would give companies information
they could never imagine with current operations, allowing them to identify prob
lems as shop lifting, inventory management, and even gray market’ sales that can
erode profits and damage distribution relationships. Let’s see the actual benefits
of using RFID in the supply chain. The biggest benefit is the total visibility
across the entire supply chain: What managers worry about the most? It is direct
ly or indirectly related to uncertainty. Uncertainty is the mother of inventory
and the father of stock-outs. Inventory Management • Maintain a real-time view of
tagged inventory as it flows through the supply chain. • Track discrete movement o
f tagged inventory. • Trigger alerts around inventory movement based on business r
ules you construct. • Allowing just-in-time practices. Maximizing warehouse space
With the high costs associated with storage real estate, the goal is to maximize
warehouse space. This will improve utilization without undermining the ease wit
h which goods can be moved in and out. Minimizing goods shrinkage Theft combined
with imprecise inventory management can create a significant shortfall in actua
l versus expected goods available. Within the retail environment goods shrinkage
is widely perceived to account for up to one per cent of stock, representing a
significant dent in profit margin. Benefits to Consumers, RFID can go beyond jus
t intangible cost savings, as RFID can play a role in food safety, counterfeit c
ontrol, and warranty programs. Businesses must avoid focusing too intently on th
e ways RFID tags can be used and instead stay focused on how RFID can improve co
nsumer value and address complex business issues. Minimizing errors in delivery
Misdirected deliveries or incorrect orders can immediately result in on-shelf ou
t-of-stock situations leading to reduced sales and damaged customer relationship
s. Indeed, for organizations relying on the delivery of specific components to f
ulfill their own order schedule, such errors can have a serious impact on custom
er satisfaction. Store Mobility: Stores will use wireless technologies at the po
int of sale for faster checkout and real-time product information in the store t
o improve operations, and throughout the supply chain to reduce costs.
IP Communications: Stores will converge their data and voice systems, providing
instant communication throughout stores at significantly reduced costs.
In conclusion, suffice to say that faced with poor supply chain management and a
rapidly changing environment, today s retailers will most definitively look for
consumer driven replenishment to simplify supply chain operations, control cost
s, and measure results. With networks that will enable real time updates to pred
ict and replenish stocks, the Indian consumer will hopefully never find his shop
ping preferences out of stock. The Indian retail market is booming, and there ar
e numerous applications—both business and consumer—that can be built around radio fr
equency identification (RFID) to deliver operational efficiencies. For instance,
if a retailer is able to track shipments and high-value assets in real-time, it
can minimise losses. Apart from improved and enhanced accuracy, RFID can also l
ead up to 80 percent savings in time spent on scanning items.
Explains Chamaria, “RFID is a transformational technology that has the potential t
o change the way business is conducted. Although at a nascent stage, we expect R
FID will start gaining traction around 2010. The cost of tags and readers is fai
rly high today; once it comes down and ROI is established, it will surely be a b
oon for both retailers and CPG companies.” Aggarwal of BEA elaborates. “While RFID i
s at a nascent stage, there are several killer applications that can utilise RFI
D technology across verticals. Supply Chain Visibility and Reusable Asset Tracki
ng will emerge as key solutions that have high applicability in the Indian marke
t, especially in manufacturing, retail, government and healthcare." But as of no
w, RFID has hardly any presence in India. Laments Chopra, “Indian retailers are st
ill to adopt bar-coding completely. The level of bar-code usage is also largely
due to the retailers’ initiatives of printing these codes at their warehouses, unl
ike in developed countries, where suppliers print barcodes. Most retailers do no
t have integrated IT systems today. Many retailers have few IT systems in the ar
eas of supply chain management, vendor development, merchandising and inventory
management. The annual expenditure on IT is quite negligible.”
Technology in Retail
Over the years as the consumer demand increased and the retailers geared up to m
eet this increase, technology evolved rapidly to support this growth. The hardwa
re and software tools that have now become almost essential for retailing can be
into 3 broad categories.
Customer Interfacing Systems
•
Bar Coding and Scanners Point of sale systems use scanners and bar coding to ide
ntify an item, use pre-stored data to calculate the cost and generate the total
bill for a client. Tunnel Scanning is a new concept where the consumer pushes th
e full shopping cart through an electronic gate to the point of sale. In a matte
r of seconds, the items in the cart are hit with laser beams and scanned. All th
at the consumer has to do is to pay for the goods.
•
Payment Payment through credit cards has become quite widespread and this enable
s a fast and easy payment process. Electronic cheque conversion, a recent develo
pment in this area, processes a cheque electronically by transmitting transactio
n information to the retailer and consumer s bank. Rather than manually process
a cheque, the retailer voids it and hands it back to the consumer along with a r
eceipt, having digitally captured and stored the image of the cheque, which make
s the process very fast.
•
Internet Internet is also rapidly evolving as a customer interface, removing the
need of a consumer physically visiting the store.
•
ERP System Various ERP vendors have developed retail-specific systems which help
in integrating all the functions from warehousing to distribution, front and ba
ck office store systems and merchandising. An integrated supply chain helps the
retailer in maintaining his stocks, getting his supplies on time, preventing sto
ck-outs and thus reducing his costs, while servicing the customer better.
•
CRM Systems The rise of loyalty programs, mail order and the Internet has provid
ed retailers with real access to consumer data. Data warehousing & mining techno
logies offers retailers the tools they need to make sense of their consumer data
and apply it to business. This, along with the various available CRM (Customer
Relationship Management) Systems, allows the retailers to study the purchase beh
avior of consumers in detail and grow the value of individual consumers to their
businesses.
•
Advanced Planning and Scheduling Systems APS systems can provide improved contro
l across the supply chain, all the way from raw material suppliers right through
to the retail shelf. These APS packages complement existing (but often limited)
ERP packages. They enable consolidation of activities such as long term budgeti
ng, monthly forecasting, weekly factory scheduling and daily distribution schedu
ling into one overall planning process using a single set of data. Leading manuf
actures, distributors and retailers and considering APS packages such as those f
rom i2, Manugistics, Bann, MerciaLincs and Stirling-Douglas.
Strategic Decision Support Systems
•
Store Site Location Demographics and buying patterns of residents of an area can
be used to compare various possible sites for opening new stores. Today, softwa
re packages are helping retailers not only in their locational decisions but in
decisions regarding store sizing and floor-spaces as well.
•
Visual Merchandising The decision on how to place & stack items in a store is no
more taken on the gut feel of the store manager. A larger number of visual merc
handising tools are available to him to evaluate the impact of his stacking opti
ons. The SPACEMAN Store Suit from AC Neilsen and ModaCAD are example of products
helping in modeling a retail store design.
Investment Opportunities
• •
Potential For Investment: The total estimated Investment Opportunity in the reta
il sector is around US$ 5-6 Billion in the Next five years. Location: with moder
n retail formats having made their foray into the top cities namely Hyderabad, C
oimbatore, Ahmedabad, Mumbai, Pune, Chennai, Bangalore, Delhi, Nagpur there exis
ts tremendous potential in two tier towns over the next 5 years. Sectors with Hi
gh Growth Potential: Certain segments that promise a high growth are
•
Food and Grocery Clothing Furniture and Fixtures Pharmacy Durables, Footwear & L
eather, Watch & Jewellery
•
Fastest Growing Formats: Some of the formats that offer good growth potential ar
e: o Speciality and Super Market Hyper Market Discount stores Department Stores
Convenience Stores and E-Retailing
• •
Supply Chain Infrastructure: Supply chain infrastructure in terms of cold chain
and Logistics. Rural Retail: Retail sector offers opportunities for exploration
and investment in rural areas, with Corporates and Entrepreneurs having made a f
oray in the past. India s largely rural population has caught the eye of retaile
rs looking for new areas of growth. ITC launched the country s first rural mall
Chaupal Sagar , offering a diverse product range from FMCG to electronics appl
iance to automobiles, attempting to provide farmers a one-stop destination for a
ll of their needs. There has been yet another initiative by the DCM Sriram Group
called the Hariyali Bazaar , that has initially started off by providing farm
related inputs and services but plans to introduce the complete shopping basket
in due course. Other corporate bodies include Escorts and Tata Chemicals (with
Tata Kisan Sansar) setting up agri-stores to provide products/services targeted
at the farmer in order to tap the vast rural market. Wholesale Trading: wholesal
e trading also holds huge potential for growth. German giant Metro AG and South
African Shoprite Holdings have already made headway in this segment by setting u
p stores selling merchandise on a wholesale basis in Bangalore and Mumbai respec
tively. These new-format cash-and-carry stores attract large volumes from a size
able number of retailers who do not have to maintain relationships with multiple
suppliers for all their needs.
•
•
Cheap Consumer Credit
Government Initiatives & Regulations
There has always been a strong opposition to FDI in India’s retail sector (though
100 percent FDI is allowed in distribution companies that sell to the trade and
not to the consumer). The BJP was not too keen on it early on, though towards th
e end of Vajpayee’s government‘s term there were noises that it would consider such
a move. These days, the left parties are orchestrating a passionate opposition t
o allowing FDI in retail. The arguments are familiar – that global retailers will
swamp the Indian markets, wipe out small kirana stores and put millions of jobs
in jeopardy. They also argue that giant global retailers will squeeze suppliers
and finish them off. “ The negative effects in terms of job losses and the displac
ement of traditional supply chains by the monopoly/ monophony power of multinati
onal retailers far outweigh the supposed benefits…” the left observed in a recent se
ven-page note that summarized its arguments against FDI. Given the political clo
ut of the small trading community, because of their enormous numbers, the govern
ment has barred FDI in retailing since 1997. Most of India’s home grown retailers
also oppose FDI, though for a different reason. “What is the hurry (to allow FDI)?
For 10 years, China allowed only one foreign store per province. I allowed dome
stic chains to build up good valuation before opening FDI, “argues Kishore Biyani,
managing director, Pantaloon Retail. “ The debate is not ‘whether or not to allow F
DI, but ‘when and how’,” he clarifies. Biyani is also chairman of Confederation of Ind
ian Industry’s retail committee, which estimates that Rs.20, 000 crore will be nee
ded in retail to scale up to its potential. Indian companies need time to mobili
ze at least part of the capital before the foreign players are allowed in, argue
s CII. In private some domestic retailers fear getting lower valuations from the
ir global counterparts if they sell out today. But five or 10 years later, when
they have built up larger business, they may get far higher valuations. Of cours
e, the argument of asking for more time to get even better valuation may not los
e its appeal even a decade later, if the approach is instinctively protectionist
. INDIA’s retail industry – the fourth largest in the world – accounts for 11 per cent
of the country’s GDP and employs over 40 million people (about 7 per cent of Sect
or retailers (Yes, they have retailing PSU’s!) had a 32 percent share and private
sector retailers had 45 per cent. total employment in the country). Now, a huge
majority of the retail workforce is in kiranas.This sector, in fact acts as an i
nformal social security net – almost anyone without a job can set up a kirana. The
big worry is that global retailers will quickly put these kiranas out of busine
ss, leading to millions of job losses. Is that fear justified? The answer can be
found in the experience of othercountries that allow FDI in retail. In Thailand
and Malaysia, global retailers have spelt doom for the traditional mom and pop
stores. In fact the Thai government had to step step in to save local retailers
from annihilation. It set up Allied Retail Trade, a network of franchised stores
, which brought small stores together to fight the big chains. But if the Thaila
nd story is forbidding, then the China one is inspirational. Global chains have
had a 13 year run in china. In 1992, China had one supermarket. Today it has 60,
000. (Supermarkets are perceived to be kirana killers!). Four of the world’s 10 l
argest retailers, 35 of the top 50 and 78 of the top 250 have already opened sto
res in China. Hypermarkets, supermarkets, discount stores, cash & carry convenie
nce stores every conceivable format operates in China. The globalization of chin
a is complete.
So what impact has this had?
The top 100 retailers (both domestic and foreign) in China had combined sales of
$60 billion in 2004, according to the China Chain Store & Franchise Association
. These 100 companies have so far opened 30,416 stores with a total area of 25.8
million square metres. But – and here’s the revelation they have only 9.6 per cent
share of China‘s $628- billion retail trade! That figure has grown from 2.9 per ce
nt in 2000. It must be mentioned that the global giants got unfettered access in
to China only in 2004. Therefore their performance cannot be compared with rest
of the country’s retail sector, but must be benchmarked only against the top 100 f
irms. When seen thus, the foreign firms account for only 23 percent sales of the
top 100 retailers. China’s public Now, the question is which theory is relevant t
o
India – China’s or Thailand’s? “India cannot be compared with Thailand and Malaysia as t
he scale is much smaller and economic levels are dissimilar. The right compariso
n would be Germany 20-30 years ago or Brazil today. China makes sense because of
its similarities with India: large area, large chunk of underdeveloped populati
on, disparity in income levels,” says Arvin Singhal, chairman of consultancy KSA T
echnopak. Or better still, one could also look at the US story. Its retailing in
dustry is one of the most matures ones in the world. It is also home to some of
the world’s largest retailers. But there is a less understood aspect of the US ret
ail scene – 95 percent of all retailers in the US are single – store operations. The
y may not be as the Indian Kirana, but they are still small ‘mom and pop’ operations
on the US scale. Despite over six decades of dominance by large chains, these s
mall players have not find a lot of them in the vicinity of a Wal- Mart or a tar
get. They are also under pressure and their market share in on the decline. But
the fact is that the single- store operations still control a little less than 5
0 percent of US retail trade. Again, back home, in Chennai, where large and orga
nised supermarket chains like FoodWorld and Nilgiri’s have grabbed a 20 percent ma
rket share, the kiranas haven’t been slaughtered. They are smarter, more efficient
more customer- friendly than they were five years ago; they are matching the ch
ains’ prices and continue to do brisk business. Even stores in close vicinity of t
hese large supermarkets have survived. “Small businesses have their own competitiv
e advantages. They are local; they are usually in the same block that the custom
ers are in; and they are very convenient. They know their customers by name, so
they offer great customer service. They have tailored their inventory for their
customers, so they have great inventory management, and many times they give cre
dit. Small businesses have their own model, offer a different product mix, and k
eep their customers happy. I think small business can grow and prosper with Wal
Mart, “Menzer had argued in an inclusive interview with BW during his May visit.
Benefits of opening the Retail sector
Improve competition Develop the market : Greater level of exports due to increas
ed sourcing by major players Sourcing by Wal-Mart from China improved multifold
after FDI permitted in China Similar increase in sourcing observed for Metro in
India Provides access to global markets for Indian producers. Investment in tech
nology Cold storage chains solve the perennial problem of wastage. Greater inves
tment in the food processing sector technology Better operations in production c
ycle and distribution. Better lifestyle Greater level of wages paid by internati
onal players usually More product variety Newer product categories Economies of
scale to help lower consumer price. Increased purchasing capacity of consumers M
anpower and skill development through retail training and Greater managerial tal
ent inflow from other countries Tourism Development : A strong retailing sector
boosts tourism as seen from the experience of Singapore and Dubai. Investment in
whole supply chain Improved product basket from India for exports. Long term be
nefits,up-gradation of agriculture, development of efficient small and medium si
ze industries.
FDI would result in market growth and expansion. Employment generated at various
levels, Increased consumer demand implies employment generation across the valu
e chain does not need very high skill sets, needs high school graduates and othe
r similar skill level. Currently this is a majorly unemployed demographic group
Boom in employment similar to job generation in ITES industry. On a much larger
scale But new jobs comparatively lower down the value chain Greater clarity and
objectivity can be achieved if one looks beyond kiranas at the larger issue of e
mployment, Despite the entry of organized retail – domestic and foreign – in China,
its retail still employs 6 percent of the total workforce ( only marginally smal
ler than India). The top 100 retailers in China employ 810,000 people, a figure
growing at over 25 percent every year. But compared with the US, the percentage
looks paltry. In the US, almost 15 million people or 11.7 of the workforce are e
mployed in retail. This is almost double the retail workforce in China – and much
higher than in India! Many believe that organised retail actually leads to job g
ains rather than job losses. This is not to say that the changeover will be pain
less. Shifting of jobs is bound to happen. “Supermarket chains will divert busines
s from small vendors, but they also create many jobs,” argues retail expert Gale.
One reason for that is growth of organised retail stimulates consumption. And in
creased consumption means more production and therefore more jobs.In India, owne
rs of large and small stores will tell you that they face stockouts – products not
available when a consumer asks for it. This is lost demand. And it is due to In
dia’s rather inefficient supply chain. One could, therefore argue that India’s consu
mption is actually way below actual potential – and that there is inherent job los
s of jobs that exists in the economy. Here poor distribution and below-par proce
sses is another bottleneck. “If the economy grows at 6.5 percent or so every year,
we will have 5-7 years. If you do not have an efficient distribution chain, the
economy cannot grow…Such inefficiency will lead to job losses. If you do not have
organized distribution, you won’t have employment growth,” argues Harsh Bahadur, ma
naging director, Metro Cash & Carry, India. Finally, if the fear of kiranas bein
g snuffed out is true, then the government ought to be equally concerned about I
ndian retailers as well. Several large and influential business groups like the
Tatas and Ambanis have ambitious plans that include setting up of hundreds of su
permarkets and hypermarkets. Won’t these kill kiranas and lead to job losses. In r
eality; foreign retailers will be in a position to influence employment only sev
eral years after they enter India. But they will have an impact on the consumer
almost immediately. Of course, in India the consumer is invariably forgotten whe
n protectionist lobbies voice their concern.
RESEARCH METHODOLOGY
Objectives of study • The overall purpose of this endeavor is to investigate empir
ically customers’ preference towards exclusive and multi brand retail outlets and
to determine the factors that influence the satisfaction level of customers’ in re
tail sector especially in Lucknow city. • This study is also aimed at finding out
the relation between major demographic variables and satisfaction level of custo
mers’ and preference of retail formats. • To study the preference given by consumers
in term of quality, ambience, service, scheme and location for retail purchase.
• What are the factors affects for the purchase?
Research Design: Descriptive research design will be used.
• • •
Type: Descriptive Study Scope: combination of theoretical study as well as Stati
stical Study Environment: Field Research
Data Sources:
Primary Data - Survey of Customers in Lucknow. It will be collected with the hel
p of Questionnaire Method and Survey Research. As well as unstructured observati
on will also come in use at some part (topic) of study.
Secondary Data - It will be collected with the help of Internet, books, journals
, articles of newspapers & magazines and research papers related to booming orga
nized retail sector.
Data Analysis: Data will be analyzed with the help of certain statistical tools.
1. Questionnaire method
2. Method of observation Sampling Design:
• • • •
Population: Consumers of Lucknow city Survey area: Consumer located in different
area of Lucknow city Sampling method: Non-Probability Convenient sampling plan.
Sample size: 100 consumers from Lucknow city
Significance of the Study: • • To know the awareness of people about different brand
s of retail sector. Result will be the knowledge about customer’s preference towar
ds exclusive and multi-brand retail outlet that will be helpful to find out the
factors that influence the satisfaction level of customer. • It will be helpful to
know the connection between demographic factors of consumer like age, income, e
ducation and choice of people for different types of product.
Limitations of the Study:
• • •
The present study is limited to the growth of retail sector in india only. The b
ias of respondents while responding cannot be eliminated. The study was limited
to only in Lucknow city.
Delivery Method: Two hard copies in form of booklets and two softcopies in form
of CDs. • • First copy of project report will be submitted to project guide. Second
copy is participant’s own copy.
RESEARCH ANALYSIS
This research analysis is based on the answers given by the sample customers of
Lucknow city in the above given consumer survey questionnaire.
•
Average Monthly Shopping Budget of Consumers:
The below given was the interpretation of the average monthly shopping budget fo
r the sample size in the project survey. In the sample size most of the people (
i.e. 38%)were able to do shopping between Rs. 2000-5000.
12%
7%
1%
0-2000 23% 2000-5000 5000-10000 10000-20000 38% 20000-50000 50000 & More
19%
•
Awareness about different brands of Retail Sector:
The store location, its customer services, discount schemes and offers, its qual
ity are the important factors for the awareness of the any retailing company or
brand but apart from all these the most important thing which influence the awar
eness of any particular brand is it’s advertising and other promotional activities
. Big Bazaar of future group in Lucknow is very well know brand among the people
of sample because of it’s pricing, attractive offers and discounts and its very g
ood promotional and marketing activities. The Vishal Mega Mart is also famous be
cause of its reach in the various areas of the city.
120 100 80 60 40 20 0 Shoppers Stop Landmark Big Bazar Vishal Mega Mart West Sid
e
•
Which Retail chain Customers like to visit often:
Because of it’s attractive pricing and good schemes and offers people like to visi
t Big Bazaar most often. Vishal Mega Mart is also giving attractive discount on
formal wear so it is also known for good footfall. Shoppers stop do not have dis
count offers and schemes but it is still liking of some of people in sample size
because of its ambience, shopping comfort and good customer services.
Landmark 11% Shoppers Stop 17%
West Side 9%
Big Bazar 36%
Vishal Mega Mart 27%
•
Customer Preferences for shopping from Retail chains:
The consumers of sample size were visiting the big retail outlets most because o
f their good pricing and for their attractive schemes and discounts offers. Afte
r that they also going there for the quality experience. The location of the sto
re is also a big concern for the consumers. Thereafter they are also looking for
good customer services. They want to get well treated by the sales persons of t
he stores. Ambience came in last for all of them.
Discount Schemes Quality Location Customer Service Ambience
Conclusion
The consumer’s preferences are changing rapidity and becoming highly diversified.
It is difficult for the retail stores to satisfy all the needs of the customers.
The most of the consumer’s want to get some attractive prices, good schemes and o
ffers on every purchases and a shopping comfort as well. Those who are able to p
urchase their needs and want for a month in a bulk prefers to go to the retail c
hains. Because of competitions in the market the branded formals are also became
cheaper so the younger generation prefers to purchase from the retail outlets o
f the brand the city. Only the big retail chains are able to satisfy all these n
eeds of the new age consumers whereas there is still some consumers mostly of th
e old age are willing to purchase from the local kirana store. Some of them have
perception that these big stores are too costly to afford and some of them are
not able to make purchases in a bulk so they do not want to waste their time to
go especially to the big store for 2-3 items purchase. In the case of other item
s like wristwatches, branded jewelry, mobiles, gift items and other, they prefer
to take it from where they are getting cheap prices, good after sales services
and the goodwill of the store. After studying the customer survey questionnaire
statistically and theoretically as well and after observing the consumer’s mood an
d their preferences I can say that Big Retail is here to stay. Assuming that imp
rovements in infrastructure and lower real estate costs become a reality, Big Re
tail still has a long way to go before satisfying the highly diverse needs of th
e Indian population. As a result, there will be a steady state where Big Retail
will co-exist with Small Retail.
APPENDIX
CONSUMER SURVEY QUESTIONNAIRE RETAIL CHAINS
The objective of this survey is to collect tangible information about shopping i
n Retail Chains. This questionnaire is being administered to people like you who
have visited and bought products in Retail Chains. Please let us know your spon
taneous response to the questions that pertain to your shopping experience in Re
tail Chains. All information provided by you shall be kept confidential and we s
hall only be publishing the outcomes. Please provide us your unbiased and frank
opinions.
1. What is your monthly shopping budget? 0-2K 2-5K 5-10K 10-20K 20-50K >50K
2. Which retail chains did you visit ? Big Bazaar Shoppers Stop Westside Landmar
k Vishal Megamart Any other (Please specify) ________________________________ 3.
Which retail chains do you visit often? Big Bazaar Shoppers Stop Westside Landm
ark Vishal Megamart Any other (Please specify) ________________________________
4. Which retail chain did you like most? Big Bazaar Shoppers Stop Westside Landm
ark Vishal Megamart Any other (Please specify) ________________________________
5. Why did you like that particular retail chain? Ambience Attractive Prices Wid
e range of choices Discount Schemes Free Offers Customer Service Any Other (Plea
se Specify) ___________________________________ 6. Mark on a scale of -3 to +3 y
our perceptions about your shopping experience in the following retail chains (w
here -3 indicates inferior and + 3 indicates superior) : Feature Ambience Attrac
tive Prices Range of Choices Price Discounts Freebies Salespeople Behavior Parki
ng Facilities Convenience Home Delivery Big Vishal Westside Shoppers Landmark Ba
zaar Megamart Stop 15 70 65 80 60 50
7. Which products do you normally buy from retail chains? ______________________
_________________ _______________________________________ ______________________
_________________ _______________________________________
_______________________________________ 8. Which products do you normally buy fr
om your local grocery store? _______________________________________ ___________
____________________________ _______________________________________ ___________
____________________________ _______________________________________
9. Which products do you normally buy from your chemist shop? __________________
_____________________ _______________________________________ __________________
_____________________ _______________________________________ __________________
_____________________ 10. Why do you like to buy from local grocery store? _____
__________________________________ _______________________________________ _____
__________________________________ _______________________________________ _____
__________________________________ 11. Why do you like to buy from chemist shops
? _______________________________________ ______________________________________
_ _______________________________________ ______________________________________
_ _______________________________________ 12. How much time do you spend in the
retail chain on every visit? 0-30 Minutes 30-60 Minutes 3-4 Hours 4-5 Hours 1-2
Hour 2-3 Hours <5 Hours
13. The emergence of retail chains will create unemployment problems:
Strongly Agree Agree Neither Agree Nor Disagree Disagree Strongly Disagree
14. The emergence of retail chains will destroy social harmony:
Strongly Agree
Agree
Neither Agree nor Disagree
Disagree
Strongly Disagree
15. The emergence of retail chains will cause monopolistic control over prices:
Strongly Agree Disagree Agree Neither Agree Nor Disagree Disagree Strongly
16. FDI in Retail Sector will contribute to the Growth Momentum:
Strongly Agree Disagree. Agree Neither Agree Nor Disagree Disagree Strongly
Demographics
1. Name: 2. Age: 3. Occupation: 4. Income group: 5. Education: _________________
_____________________________________ 15-20 40-50 20-30 50 & above 30-40
Student Govt. Employee Private Employee Businessman Any other (Pls specify) ____
___________ 5k-10k 40k-50k Student MBA 10k-20k 20k-30k 50k & above 30k-40k
Graduate Post-Graduate Any other (Pls specify) ___________________ Five
6. Number of Family Dependants: Nil One Two Any other (Pls specify)
7. Telephone Number / E-mail:___________________________________________
________________________________ Thank You______________________________
References
Web Sites and Search Engines
• • • • • • • •
www.indiabiznews.com www.fashion2fibre.com www.indiainfoline.com www.equitymaste
r.com www.economywatch.com www.google.com www.rediff.com www.ibef.org
Newspapers • • • • • • The Times Of India The Indian Express The Economic Times Financial E
press Business Standard Business Line
Books and Magazines • • • Business World The Indian Dream Business & Economy

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1. Industry Overview 05 2. Organized Retail Sector 10 3. Origin of retail 13 4.

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