Report on

Indian Retail Industry

Group- 6

Ananya Yadav
Manohar Gupta
Aditya Singh
Aditya Goyal
Sanjay Kv
Shubham Kumar
Niraj
Indian Retail industry:
The last two decades, Indian Retail Industry has undergone considerable change
with respect to size, scope and complexity

From USD 672 billion in 2016, the Indian Retail market is expected to grow to USD
1100 billion in 2020 with the help of rise in income levels, growing aspirations,
favourable demographics and ease of credit

Globally, India is fifth-largest destination in retail space and is growing at a rate of

12% per annum.

It accounts for over 10 per cent of the country’s Gross Domestic Product (GDP)
and around 8 per cent of the employment.

Online retail is expected to be at par with the physical stores in the next five years
and has grown 23 per cent to $17.8 billion in 2017.
Future Roadmap
DMart
DMart is a chain of an emerging hypermarkets in India is founded by Radhakishan Damani in the year
2002

DMart is promoted by Avenue Supermarts Ltd. (ASL), headquarters in Mumbai

As of October 2018, it had 163 stores across India in different states

This pegged it as the 65th most valuable Indian firm, ahead of Britannia
Industries, Marico and Bank of Baroda

It is ranked 33rd of all listed companies in Bombay Stock Exchange

D Mart credo is “Everyday Low Cost / Everyday Low Price”, thus providing value-for-money to its
customers.

“Customer First” culture in the organisation this will ensure that the organisation aligns its actions towards
providing quality products and services at reasonable prices
Planning systems:
• Dmart store currently operates a formal budgeting system. The master budget is
prepared every year, but revised every quarter for any changes that had not been
taken into account at the beginning of the financial period.

Performance measurement systems:

• The most important performance evaluation systems in the organisation were the
team-based performance measures. The company used both financial and non-
financial measures to measure the performance of its managers and divisions.

Costing systems:
• Overhead costs were allocated to products using simple allocation bases such as
turnover, square metres, and cost of direct labour. The proportion of indirect costs was
considered to be too low to necessitate the introduction of activity-based costing (
ABC ).

Performance management reporting:

• More changes occurred in this category than in any of the three other categories
discussed above. For example, reports that were previously prepared on a quarterly or
semi-annual basis are now being prepared weekly and at times daily.

Incentive systems:
• Major changes were made to the company’s incentive system two years ago.
Bonuses were introduced to reward high performers. A scholarship program was also
introduced to benefit those employees who wished to further their education.
 BigBazaar

Big Bazaar is an Indian retail store that operates as a chain of hypermarkets, discount
department stores, and grocery stores

The retail chain was founded by Kishore Biyani under his parent organisation Future
Group, which is known for having a significant prominence in Indian retail and fashion
sectors

Big Bazaar is also the parent chain of Food Bazaar, Fashion at Big Bazaar (abbreviated
as fbb) and eZone where at locations it houses all under one roof, while it is sister chain
of retail outlets like Brand Factory, Home Town, Central, eZone, etc.

Founded in 2001, Big Bazaar is one of the oldest and largest hypermarkets chain of
India, housing about 250+ stores in over 120 cities and towns across the country.
Highlights FY 17-18

REVENUE (` IN CRORE) 18,498

EBITDA (` IN CRORE) 719

PAT (` IN CRORE) 11.30

MARKET CAP (` IN CRORE) 62,313.09

CITIES +312

NO. OF STORES 1035

RETAIL SPACE (IN MILLION SQ. FT.) +14.5

 Performance
Planning systems: Control systems: Costing systems: management Incentive systems:
reporting:
•Big Bazaar •The company •Big Bazaar •Decision-making •In addition to the
Company placed a high separated its costs within Big Bazaar bonus reward
operates a emphasis on team into their fixed and had experienced system the
budgeting system. performance. The variable the highest degree company has
A master budget is team components. This of change during recently
prepared every six performance classification was the last decade. introduced a
months and is measurement was based on past Information was system where it
revised every mainly based on managerial now being sponsors highly
month for changes divisional profits experiences. To reported more performing
that had not been and/or reduction allocate indirect frequently. individuals for
accounted for at of loses (if the cost (mainly overseas trips.
the beginning of division was marketing and Cash rewards and
the period. making losses), branding costs), recognition
•To forecast sales profits per head, the company used certificates are
revenue, the customer per simple cost awarded to those
company mainly head, number of allocation bases. employees who
uses the past customer are able to
experience of its complaints in the prevent theft and
senior managers. division, and fraud.
number of staff
trained during the
period.
 Shoppers Stop

Shoppers Stop is an Indian department store chain, owned by the K Raheja Corp Group

There are 240 stores across 38 cities in India, with clothing, accessories, handbags, shoes, jewellery, fragrances,
cosmetics, health and beauty products, home furnishing and decor products.

The first store was opened in Andheri, Mumbai in 1991. The Company opened its 22nd store at Noida in May 2007

In 2007, it entered into partnership with Nuance Group AG, and opened stores in Mumbai and Bengaluru Airports

An e-store with delivery across major cities in India was launched in 2008, with a smartphone app in 2016

In June 2018, the retail chain underwent a board rejig in which promoter Chandru L Raheja resigned as the non-
executive chairman after having served for over two decades. Chandru Raheja was succeeded by BS Nagesh.

They aspire to provide our customers a memorable international shopping experience

KEY HIGHLIGHTS OF 2017-18

REVENUE (` IN CRORE) 4,186.31

EBITDA (` IN CRORE) 227.65

PAT (` IN CRORE) 11.60

MARKET CAP (` IN CRORE) 5,113.09

CITIES +38

NO. OF STORES +240

RETAIL SPACE (IN MILLION SQ. FT.) +4.35

 Performance
Planning Costing Incentive
Control systems: management
systems: systems: systems:
reporting:

•The company •Team-based •The company •Consequently, the •The company

operates a flexible performance separated costs into management respondents
budgeting system. measures were their fixed and accounting reported an
The master budget, considered to be variable department now increased use of
which was viewed by more important than components. This produces reports monetary rewards by
the researcher, is individual classification was more frequently than top management to
prepared by performance mainly subjectively was previously motivate its
increasing/decreasin measures. The based on feasible. Accounting employees. The
g the previous year’s respondents managerial information is also company also
sales/costs. The explained that experience. reported more introduced a new
company mainly anything that was broadly. scheme to assist
relies on the previous achieved by the members of its staff
year’s sales to organisation was as to acquire its shares.
determine the sales a result of teamwork
of the coming and could not be
financial year. specifically tied to an
individual.
 Comparison table
Summary of findings

Predictors of MASs change Competition, technology, new Competition, technology, new Competition, technology, poor financial
shareholders customer performance

Hindrances of MASs change Computing resource, accounting Fear of change, resource Computing resources, management
skills, management inertia constraint inertia

Planning: budget systems Flexible Flexible Flexible

Budget process Incremental Incremental Incremental

Strategic plan Yes Yes Not seen
Capital investment appraisal NPV, managerial judgement NPV, PBP NPV, PBP
method

Controls: non-financial Quality, customer satisfaction Quality, market share Customer satisfaction, quality
measures
Directing: individual Team-based Team-based Team-based
performance measure

Costing: cost allocation base Simple Simple Simple

Decision making: reports More frequently More frequently More frequently