TABLE OF CONTENTS

CHAPTER

CONTENTS

PAGE NUMABER

1.1 INTRODUCTION 1 1.2 OBJECTIVES 1.3 LIMITATIONS OF THE STUDY 1.4 NEED & SCOPE OF THE STUDY 1.5 RESEARCH METHODOLOGY 2.1 COMPANY PROFILE 2 2.2 INDUSTRY PROFILE

THEORETICAL FRAME WORK

ANALYSIS AND INTERPRITATION

FINDINGS & CONCLUSION

ANNEXURE

BIBILOGRAPHY

1.

Introduction

RETAILING Means Re-tailing to the customers so that they comeback. Retailing consists of all activities involved in selling goods and services to consumers for their personal, family, or household use. It covers sales of goods ranging from automobiles to apparel and food products, and services ranging from hair cutting to air travel and computer education. Sales of goods to intermediaries who resell to retailers or sales to manufacturers are not considered a retail activity. The Indian retail story couldn't have been more different. India has approx 12 million retail stores, more than rest of the world put together. But the per capita square feet area under retail is just 2 sq.ft or 0.2 sq. meters with fragmented kirana stores being the predominant players. Retailing in India has remained in the unorganized sector and largely untouched by corporate. The first decade of modern retail in India has been characterized by a shift from traditional channels to new formats including department stores, hypermarkets, supermarkets and specialty stores across a range of categories. Modern retail formats have mushroomed in metros and mini-metros, in the last few years modern retail has also established its presence in the second rung cities. Thus, exposing the residents of these cities to shopping options, they have never experienced before. It has been forecasted that the share of modern retail will increase from 2 per cent currently, to about 15-20 per cent over the next decade. To begin with, retailers today will have to support the 3 large retail infrastructure in terms of Malls and Superstores that are being created. The challenge for leading retailers shall therefore shift from diverting demand to creating demand. With all the modern stores offering convenience in terms of an assortment of products, ambience, service and innovative products, the paradigm shall shift from competing with the kirana stores to an in-house demand creation. Relevant experiences from consumer goods companies, which have

successfully crafted an explosion in demand in their sectors, through innovation, consumer driven strategies, will be head runner. Times are changing. With the GDP at an all time high and income levels shooting through the roof, the average Indian consumer has never had it so good. The propensity to consume has reached peaks that had never been scaled before. Credit cards are flashed with disdain and shopping baskets are getting bigger all the time. Here are some factors that indicate the potential of retail in India: yAt 271 million, one of the largest consuming base in the world, forming 27% of the total population. yA high spending community below 45 years comprises 81 percent of the population. yA young population with 54% population below 25 years yIncreased literacy from 44% in 1965 to 70% in 2003 yIncrease in working women from 1.3 million in 1961 to 4.8 million in 1998. The first decade of modern retail in India has been characterized by a shift from traditional kirana shops to new formats including department stores, hypermarkets, supermarkets and specialty stores across a range of 4 categories. Modern retail formats have mushroomed in metros and minimarts. In the last few years, modern retail has also established its presence in the second-rung cities, exposing residents to shopping options like never before. However, even as modern retailers garner share from traditional channels, there is a larger role they would be required to play in boosting consumption levels.Figures suggest that the total turnover of the sector is around Rs 10 lakh crores, of which 4 percent is contributed by the organised sector. The retail sector in India is highly fragmented with organized retail contributing to only 2% of total retail sales. The retail sector in developed countries was also highly fragmented at the beginning of the last century but emergence of large chains like Wall Mart, Sears, and McDonalds led to rapid growth of organized retail and growing consolidation of the retail industry in the developed countries. Organized retail is growing rapidly and we see the emergence of large organized retail chains like Shoppers Stop, Lifestyle, and Westside. We also find retail malls mushrooming all over the country. The opportunities in retail industry in India will increase since Indian retailing is on the threshold of a major change. India retail industry is the largest industry in India, with an employment of around 8% and contributing to over 10% of the country's GDP. Retail industry in India is expected to rise 25% yearly being driven by strong income growth, changing lifestyles, and favorable demographic patterns. It

is expected that by 2016 modern retail industry in India will be worth US$ 175- 200 billion. India retail industry is one of the fastest growing industries 5 with revenue expected in 2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption. It has further been predicted that the retailing industry in India will amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5 billion. Shopping in India have witnessed a revolution with the change in the consumer buying behavior and the whole format of shopping also altering. Industry of retail in India which have become modern can be seen from the fact that there are multi- stored malls, huge shopping centers, and sprawling complexes which offer food, shopping, and entertainment all under the same roof. India retail industry is expanding itself most aggressively, as a result a great demand for real estate is being created. Impact on Unorganized Retailers Unorganized retailers in the vicinity of organized retailers experienced a decline in their volume of business and profit in the initial years after the entry of large organized retailers. The adverse impact on sales and profit weakens over time. There was no evidence of a decline in overall employment in the unorganized sector as a result of the entry of organized retailers. There is some decline in employment in the North and West regions which, however, also weakens over time. The rate of closure of unorganized retail shops in gross terms is found to be 4.2 per cent per annum which is much lower than the international rate of closure of small businesses. The rate of closure on account of competition from organized retail is lower still at 1.7 per cent per annum. There is competitive response from traditional retailers through improved business practices and technology upgradation. A majority of unorganized retailers is keen to stay in the business and compete, while also wanting the next generation to continue likewise. Small retailers have been extending more credit to attract and retain customers. However, only 12 per cent of unorganized retailers have access to institutional credit and 37 per cent felt the need for better access to commercial bank credit. Most unorganized retailers are committed to remaining independent and barely 10 per cent preferred to become franchisees of organized retailers.

Impact on Consumers Consumers have definitely gained from organized retail on multiple counts. Overall consumer spending has increased with the entry of the organized retail. While all income groups saved through organized retail purchases, the survey revealed that lower income consumers saved more. Thus, organized retail is relatively more beneficial to the less well-off consumers. Proximity is a major comparative advantage of unorganized outlets. Unorganized retailers have significant competitive strengths that include consumer goodwill, credit sales, amenability to bargaining, ability to sell loose items, convenient timings, and home delivery. Impact on Intermediaries The study did not find any evidence so far of adverse impact of organized retail on intermediaries. There is, however, some adverse impact on turnover and profit of intermediaries dealing in products such as, fruit, vegetables, and apparel. Over two-thirds of the intermediaries plan to expand their businesses in response to increased business opportunities opened by the expansion of retail. Only 22 per cent do not want the next generation to enter the same business. Impact on Farmers Farmers benefit significantly from the option of direct sales to organized retailers. Average price realization for cauliflower farmers selling directly to organized retail is about 25 per cent higher than their proceeds from sale to regulated government mandi. viii Profit realization for farmers selling directly to organized retailers is about 60 per cent higher than that received from selling in the mandi The difference is even larger when the amount charged by the commission agent (usually 10 per cent of sale price) in the mandi is taken into account. Impact on Manufacturers Large manufacturers have started feeling the competitive impact of organized retail through price and payment pressures. Manufacturers have responded through building and reinforcing their brand strength, increasing their own retail presence, adopting small retailers, and setting up dedicated teams to deal with modern retailers. Entry of organized retail is transforming the logistics industry. This will create significant positive externalities across the economy. Small manufacturers did not report any significant impact of organized retail. Policy Recommendations On the basis of the results of the surveys and the review of international retail experience, the study makes the following major recommendations: 1. Modernization of wetmarkets through public-private partnerships.

2. Facilitate cash-and-carry outlets, like Metro, for sale to unorganized retail and procurement from farmers, as in China. 3. Encourage co-operatives and associations of unorganized retailers for direct procurement from suppliers and farmers. 4. Ensure better credit availability to unorganized retailers from banks and micro-credit institutions through innovative banking solutions. 5. Facilitate the formation of farmers co-operatives to directly sell to organized retailers. 6. Encourage formulation of private codes of conduct by organized retail for dealing with small suppliers. These may then be incorporated into enforceable legislation. 7. Simplification of the licensing and permit regime for organized retail and move towards a nationwide uniform licensing regime in the states to facilitate modern retail. 8. Strengthening the Competition Commissions role for enforcing rules against collusion and predatory pricing. 9. Modernization of APMC markets as modelled on the National Dairy Development Board (NDDB) Safal market in Bangalore.

OBJECTIVES:
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CHAPTER-II

COMPANY PROFILE

1. Type : Life style Retail shopping mall 2. Founded : 2007 in Bangalore owned by Prateek Group 3. Presence : In Bangalore, Raipur, Calicut, Hyderabad & Faridabad 4. Caters : To whole family 5. Store size: 20,000-50,000 sq.ft. 6. Brands : around 140 160 brands 7. Categories : Men s , Ladies, Kids, FW, Home, Toys, Luggage & bags, Cosmetics & Jeweler, Accessories & Entertainment 8. Website : prateeklifestyle.com

COMPANY HISTORY

Overview Prateek is a unique business group established to provide concept to delivery solutions to India s fast growing domestic retail market. From design to manufacturing to retail, Prateek provides the entire gamut of solutions required to offer consumers the best products at the best prices.

Organization Structure

Vision To become Indian market leader in the discount and other niche chosen formats by the year 2012.

Mission Prateek s mission is to emerge as the key player in the Indian retail market and be the market leader in its chosen areas of business to create value to the consumer, stake-holders, promoters and employees of the organization.

Private Label Mix of Coupon I. Men s Formal II. Black Coffee

Men s Casual Mark Taylor

III.

Men s Youth Highlander Locomotive

IV.

Women s Ethnic Folklore Vishudh

V.

Women s Semi-formal Black Coffee

VI.

Home Furnishing Coupon

Coupon Private Label Positioning - Men s

Men s Formal Black Coffee Men s Casual Mark Taylor Men s Youth Highlander Value priced jeans, shirts & t-shirts For mid & premium segment buyers Range starts from Rs. 299 Cotton rich shirts at value price For value conscious mid & lower segment buyers Starts from Rs. 199 100% premium cotton formal shirts at value price For mid to premium segment buyers

Locomotive Premium quality jeans, shirts & t-shirts Targeted for premium segment young buyers Range starts from Rs. 899

Coupon Private Label Positioning - Women s Women s Semi-Formal Black Coffee Women s Ethnic Folklore Vishudh Women s Youth Highlander Value priced jeans, shirts & t-shirts Premium quality suits & dress materials For mid & premium segment buyers Range starts from Rs. 299 Premium quality Indian suits with surface ornamentation For value conscious mid & premium segment buyers 100% premium cotton formal shirts at value price For mid to premium segment buyers Starts from Rs. 599

For mid & premium segment buyers Range starts from Rs. 39

Brand Portfolio of Coupon

It has more than 180 leading brands

Coupon- Products and Mix:

General merchandisefragrance, col or cosmetics, et Imported c, 5% Zone, 7% Home, 7% Luggage, sho es, bags, purs es, 8% Kids apparel, toys, books, 15%

Men's Formal/Casua l, 20% Men's Jeans/youth/ sports, 20%

Men's Women's Ethnics, Form Accessories, 5 % al, Casual, Fas hion, 13%

IMC (Integrated Marketing Communication)

Considering the situation of launch of Coupon store in Hyderabad, we can show the marketing mix that can be adopted by the firm to gain maximum reach.

OBJECTIVE Launch Coupon Mall with a lot of noise, pomp & show Set up an image of Brands, Value and Fashion in the minds of people Communicate through all medium so that COUPON becomes a new shopping destination

Target Market Segment

Youth age group (22 35)

Can reach the target audience at:

IT parks Colleges Residential complexes in the catchment's area Other entertainment hubs like PVR, i-max etc

Marketing Channels

 Road Shows     Human Banners Radio News paper Ads Movie Hall ads

 Tie-ups

Road Shows

A Caravan of 3 Tata Ace vehicles running together at the important areas. Having a troop of 1 lady emcee and 2 boys and a photographer. They will hold quiz contests at popular places where the target audience can be captured

Human Banners

A Troop of a king and 3 boys at important traffic junction displaying the offers at coupon

Banners & Hoardings

1000 Banners and Hoardings in the selected catchment areas

Radio Ads

Ads in Radio Mirchi for 1 month Ads only from 7:30 am till 11:00 am and from 5 pm till 8 pm

Ads in HI-CHANNEL

Hi -Channel: It is the local Hyderabad music channel. A very popular channel among the youth which plays songs from Hindi, Telugu, Tamil, Malayalam and Kannada movies

1 month scroll advertisement

Press Ads

4 Ads in Deccan Chronicle in 1st month on launch Only on Saturdays At a strategic position in the Newspaper

Slides in movie halls

For 1 month slides in following movie halls in all shows:

PVR - Punjagutta I-Max - Prasad Complex

Anand Galaxy

Gift voucher tie ups

Tie up with the famous paradise Biryani house for giving gift vouchers to their customers. It has a blend of middle class and high class customers

Tie up with 2 top clubs at Secundrabad (Deccan club and The new club). The customers are all upper middle class and upper class

Store Activities

Outside The Mall

Stage set up and a lady emcee conducting games outside the mall Inflated Coupon Shopping Bag

Inside The Mall

The Coupon Staff wearing crowns Every hour the customer with the highest bill value will be given a special gift. In store emcee to announce the offers and winners and keep announcing the existing highest bill value

Prateek Lifestyle Ltd

Name: Prateek Apparels Pvt. Ltd. An enterprise under the umbrella of the Pulchand group of companies

Established : 1995-1996 Managing Director : Mr.Pradeep Agarwal Manufacturing facilities : 5 Units (1500 machines) Production capacity : 0.5 million pieces/month Current Category : Men's wear, Ladies wear & Kids wear (Tops & Bottoms)

Prateek Apparels was established in 1996 with one factory & today is one of the largest apparel manufactures with five factories, employing over four thousand people. This was possible only due to the vision and astute leadership of Mr. Pradeep Agarwal.

Under his leadership, the company was awarded the prestigious APEDA AWARD for the year 1996-97

for being the second largest leading exporter of commodities, conferred by the Govt. of India. Today, Pulchand Exports is one of the LARGEST EXPORTERS OF IRON ORE from India Mr. Pradeep Agarwal has also completed a Program for Executive Development at the world famous International Institute of Management in Switzerland for Management Studies.

Ahmadabad Advance Mills- in Ahmadabad is one of the success stories of Pradeep, where he converted a sick textile unit into a profit centre, and today this company is embarking on all round development and venturing into Real Estate, Hotel Project, and Cement production Mr. Pradeep Agarwal is also actively involved in social causes & has contributed for the depressed & under privileged by establishing a trust called SUPPORT in 1985. Society Undertaking Poor People s Onus for Rehabilitation (SUPPORT). A recent book launched on activities of SUPPORT has been well appreciated by the President of India Dr. Abdul Kalam.

INDUSTRY PROFILE

India retail industry

The Indian retail industry is the fifth largest in the world. Comprising of organized and unorganized sectors, India retail industry is one of the fastest growing industries in India, especially over the last few years. Though initially, the retail industry in India was mostly unorganized, however with the change of tastes and preferences of the consumers, the industry is getting more popular these days and getting organized as well. With growing market demand, the industry is expected to grow at a pace of 25-30% annually. The India retail industry is expected to grow from Rs. 35,000 crore in 2004-05 to Rs. 109,000 crore by the year 2010.

Growth of Indian Retail:

According to the 8th Annual Global Retail Development Index (GRDI) of AT Kearney, India retail industry is the most promising emerging market for investment. In 2007, the retail trade in India had a share of 810% in the GDP (Gross Domestic Product) of the country. In 2009, it rose to 12%. It is also expected to reach 22% by 2010.

According to a report by Northbride Capita, the India retail industry is expected to grow to US$ 700 billion by 2010. By the same time, the organized sector will be 20% of the total market share. It can be mentioned here that, the share of organized sector in 2007 was 7.5% of the total retail market.

Major Retailers in India

y Pantaloon:

Pantaloon is one of the biggest retailers in India with more than 450 stores across the country. Headquartered in Mumbai, it has more than 5 million sq. ft retail space located across the country. It's growing at an enviable pace and is expected to reach 30 million sq. ft by the year

2010. In 2001, Pantaloon launched country's first hypermarket Big Bazaar . It has the following retail segments: Food & Grocery: Big Bazaar, Food Bazaar Home Solutions: Hometown, Furniture Bazaar, Collection-i Consumer Electronics: e-zone Books, Music & Gifts: Depot Health & Beauty Care: Star, Sitara Entertainment: Bowling Co. Tata Group

y y y y y y

Tata group is another major player in Indian retail industry with its subsidiary Trent, which operates Westside and Star India Bazaar. Established in 1998, it also acquired the largest book and music retailer in India Landmark in 2005. Trent owns over 4 lakh sq. ft retail space across the country.

RPG Group

RPG Group is one of the earlier entrants in the Indian retail market, when it came into food & grocery retailing in 1996 with its retail Food world stores. Later it also opened the pharmacy and beauty care outlets Health & Glow .

Reliance

Reliance is one of the biggest players in Indian retail industry. More than 300 Reliance Fresh stores and Reliance Mart are quite popular in the Indian retail market. It's expecting its sales to reach Rs. 90,000 crores by 2010. AV Birla Group

AV Birla Group has a strong presence in Indian apparel retailing. The brands like Louis Phillipe, Allen Solly, Van Heusen, Peter England are quite popular. It's also investing in other segments of

retail. It will invest Rs. 8000-9000 crores by 2010.

Retail formats in India:

Hyper marts/supermarkets: large self-servicing outlets offering products from a variety of categories. y Mom-and-pop stores: They are family owned business catering to small sections; they are individually handled retail outlets and have a personal touch. y y Departmental stores: are general retail merchandisers offering quality products and services. Convenience stores: are located in residential areas with slightly higher prices goods due to the convenience offered. y Shopping malls: The biggest form of retail in India, malls offers customers a mix of all types of products and services including entertainment and food under a single roof. y y y E-trailers: are retailers providing online buying and selling of products and services. Discount stores: These are factory outlets that give discount on the MRP. Vending: It is a relatively new entry, in the retail sector. Here beverages, snacks and other small items can be bought via vending machine. y Category killers: Small specialty stores that offer a variety of categories. They are known as category killers as they focus on specific categories, such as electronics and sporting goods. This is also known as Multi Brand Outlets or MBO's. y Specialty stores: are retail chains dealing in specific categories and provide deep assortment. Mumbai's Crossword Book Store and RPG's Music World is a couple of examples. Challenges facing Indian retail industry: The tax structure in India favors small retail business Lack of adequate infrastructure facilities High cost of real estate Dissimilarity in consumer groups Restrictions in Foreign Direct Investment Shortage of retail study options Shortage of trained manpower

y y y y y y y

Low retail management skill

Entry of MNCs The world's largest retailer by sales, Wal-Mart Stores Inc and Sunil Mittal s Bharti Enterprises has entered into a joint venture agreement and they are planning to open 10 to 15 cash-and-carry facilities over seven years. The first of the stores, which will sell groceries, consumer appliances and fruits and vegetables to retailers and small businesses, is slated to open in north India by the end of 2008. Carrefour, the world s second largest retailer by sales, is planning to setup two business entities in the country one for its cash-and-carry business and the other a master franchisee which will lend its banner, technical services and know how to an Indian company for direct-to-consumer retail. The world s fifth largest retailer by sales, Costco Wholesale Corp (Costco) known for its warehouse club model is also interested in coming to India and waiting for the right opportunity. Opposition to the retailers' plans has argued that livelihoods of small scale and rural vendors would be threatened. However, studies have found that only a limited number of small vendors will be affected and that the benefits of market expansion far outweigh the impact of the new stores Challenges: To become a truly flourishing industry, retailing needs to cross the following hurdles: Automatic approval is not allowed for foreign investment in retail. Regulations restricting real estate purchases, and cumbersome local laws. Taxation, which favors small retail businesses. Absence of developed supply chain and integrated IT management. Lack of trained work force. Low skill level for retailing management. Lack of Retailing Courses and study options Intrinsic complexity of retailing rapid price changes, constant threat of product obsolescence and low margins

y y y y y y y y

Retail marketing in India is in recession:

The retail market in India is facing slowdown with the ongoing financial crisis happening across the world markets. Since the markets always have internally linked with each other, the impact of the crisis is generally shared among all. The following circumstances are creating unwelcome interruptions to the Indian retail industry. The industry hopes for the best alternations to overcome the acrimonious situations at the time time of Recession

Issues and Challenges:-

The organized retail sector in India has been witnessing various issues and challenges which are proving to be a hurdle for its fast-paced growth. Even though the organized retail sector is in a very nascent stage in India, it provides ample opportunities for retailers, and mitigation of a few challenges will help the sector attain higher economies of scale and growth. Elucidated below are the challenges and risks that the sector faces:
y y y y

Global economic slowdown Competition from the unorganized sector Retail sector has no recognition as an industry High real-estate costs

y y y y

Lack of basic infrastructure Supply-chain inefficiencies Challenges with respect to human resources Margin Pressure

Global economic slowdown impacting consumer demand The current contraction in overall growth has not been so severe ever since the one witnessed during World War II. The subprime-triggered crisis in the US during end of 2007 gradually spread across other parts of the world; as a the fallout of this crisis, credit availability dropped sharply in advanced economies and their GDP growth contracted incessantly during the last quarter of 2008. The financial crisis continued to trouble advanced and developing economies in spite of policymakers attempts to replenish liquidity in these markets... Many banks/institutions made massive write-downs following this turn of events. According to IMF s World Economic Outlook (Apr 2009), the global GDP contracted by 1.8% in the first quarter of 2009 as compared with the 4.5% growth recorded during the same period in the previous year. Likewise, the advanced economies witnessed contraction in GDP growth (by 1.7%) during the last quarter of 2008 while the US, Euro area and Japan witnessed a recessionary trend12. According to IMF estimates, the world GDP will continue to contract by 2.4% during the third quarter of 2009. The financial crisis and global economic slowdown resulted in job losses around the world, which weakened consumer demand. The unemployment rate remained high in the US during first quarter of 2009, Europe and emerging economies like Brazil; for instance, the annual unemployment rate in the US reached 5.8% in 2008 from 4.6% in 2007, which further went up to 9.4% in May 2009.

Consumption declines in the advanced economies:

Private consumption expenditure is an important indicator of overall economic growth. In the last couple of quarters, the decline in consumption has further affected the global economic downturn. Moreover, widespread financial crisis severely hit credit availability and household disposable income. For instance, US households lost 20% (US$ 13 trillion) 14 of their net worth as a percentage of

disposable income from the second quarter of 2007 to the fourth quarter of 2008. The stock prices across the world started falling during the second quarter of 2007 and continued its losses throughout 2008; the global stock markets lost between 40-60% in dollar terms that translated to a huge loss of global wealth in 2008. The personal disposable income (at current prices) in the US registered negative growth (3.9% and 2.1%) during the last two quarters of 2008, respectively. The consumer demand situation was aggravated further by reduced capital availability and consequent fall in investments.

Competition from the unorganized sector Organized retailers face immense competition from the unorganized retailers or kirana stores (momand-pop stores) that generally cater to the customers within their neighborhood. The unorganized retail sector constitutes over 94% of India s total retail sector and thus, poses a serious hurdle for organized retailers. If put numerically, the organized retailers are facing stiff competition from over 13 million kirana stores that offer personalized services such as direct credit to customers, free home delivery services, apart from the loyalty benefits. During the current economic slowdown, the traditional kirana stores adopted various measures to retain their customers, which directly affected organized retailers.

Retail sector yet to be recognized as an industry The retail sector is not recognized as an industry by the government even though it is the second-largest employer after agriculture. Lack of recognition as an industry affects the retail sector in the following ways

Due to the lack of established lending norms and consequent delay in financing activity, the existing and new players have lesser access to credit, which affects their growth and expansion plans

The absence of a single nodal agency leads to chaos, as retailers have to oblige to multiple authorities to get clearances and for regular operations

High real estate costs Even though the real estate prices have subsided recently due to the slowdown in economies and the financial crises, these prices are expected to go up again in the near future. Presently the sector faces high stamp duties, pro-tenancy acts, the rigid Urban Land Ceiling Act and the Rent Control Act and timeconsuming legal processes, which causes delays in opening stores. Lack of basic infrastructure Poor roads and lack of cold chain infrastructure hampers the development of food retail in India. The existing players have to invest substantial amounts of money and time in building a cold-chain network. Supply-chain inefficiencies Supply chain needs to be efficiently-managed because it has a direct impact on the company s bottom lines. Presently the Indian organized retail has an efficient supply chain but it appears efficient only when compared with the unorganized sector. On an international level the Indian organized retailers fall short of international retailers like Wal-Mart and Carrefour in terms of efficiencies in supply chain. In the following paragraphs some key challenges that the retailers face during procuring goods from suppliers to delivering the same to end-customers are discusse

Challenges with respect to human resources The Indian organized retail players shell out more than 7% of sales towards personnel costs. The high HR costs are essentially the costs incurred on training employees as there is a severe scarcity for skilled labor in India. The retail industry faces attrition rates as high as 50%, which is high when compared to

other sectors also. Changes in career path, employee benefits offered by competitors of similar industries, flexible and better working hours and conditions contribute to the high attrition. Shrinkage Retail shrinkage is the difference between the book value of stock and the actual stock or the unaccounted loss of retail goods. These losses include theft by employees, administrative errors, shoplifting by customers or vendor fraud. According to industry estimates, nearly 3-4% of the Indian chain s turnover is lost on account of shrinkage. The organized industry players have invested IT, CCTV and antennas to overcome the problem of shrinkage.