Development of Indian Retail Market

Development Indian Retail Market
A REPORT ON
DEVELOPMENT OF INDIAN RETAIL MARKET
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Contents
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12. 13. 14 15.
PREFACE EXECUTIVE SUMMARY INTRODUCTION GENESIS OF ORGANISED RETAILING IN INDIA Industry Evolution RETAIL FORMATS IN INDIA Venture into under penetrated markets: Rural Retailing MAJOR RETAILERS IN INDIA Top 10 Retailers in India Quick facts on Indian Retail sector CBRE REPORT Indian Retail V/S Worlds Retail Recent Trends Growth Phase of Indian Retail Sector to Continue FUTURE TRENDS Big Bazaar bags the Most Admired F&G Retailer of the Year at FFI 2010 Aditya Birla Retails plans expansion in India BIBLIOGRAPHY
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TABLE OF CHARTS contents Industry wise impact of recession in india Indian retail formets Indias number of domestic grocery chain and early foreign entrants Organized- retail Share of org. & unorganized retail with comperesion Consumer and retail forecast Page no. 7 8,9 10 13 20 24
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PREFACE
This is my pleasure to bring out this report. The report is based on the development on the retail market in India. This report is completed on the basis of magazines, newspapers, web, and the guidance of my respected teachers. I am heartily thankful to my Rajat sir for his valuable advices that makes me very helpful to make this report. I am also helpful to all my friends to make this report easy to make. I am thankful for their help and there advices.
EXECUTIVE SUMMARY
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Indian Retail sector has caught the worlds imagination in the last few years. Topping the list of most attractive retail destination list for three years in a row it Had retail giants like Wal-Mart Carrefour and Tesco sizing up potential partners and Waiting to enter the fray. Indias retail growth was largely driven by increasing disposable incomes, Favorable demographics changing lifestyles, growth of the middle class segment and a high potential for penetration into urban and rural markets. However, with the onset of the global financial crisis, Indian retailers have been suffering from the effects of rapid credit squeeze, high operating costs and low customer confidence.
Some of our thoughts on future outlook and how it may impact behavior in retail sector are as follows:
It is widely believed that the current slowdown might last for 12 18 months Depending on government incentives in increasing spends on infrastructure, development initiatives and other activities to stimulate the economy We expect an increased focus on value retail in the coming months and a shift away from lifestyle goods, thanks to the impact of the current slowdown There is expected to be increasing action in food retailing and FMCG products as this segment is largely insulated from the slowdown, while sectors such as home furnishing are less favored Retailers are likely to start closing unprofitable stores and rationalize capital expenditure, as a part of cost optimization Churn in malls is likely to increase in the short term when some retailers opt for low-rent premises as a means of sustenance in the current economic situation As Tier I cities become saturated, retailers may move to Tier II, Tier III cities
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where profits are higher due to lower rentals and operating costs There are going to be increased investments in shortening of supply chain. This is mainly due to the incentives offered by the government and the potential for higher profit margins The frequency with which retailers liquidate slow-moving goods by offering discounts to reduce inventory is likely to increase. The long term prospects for retail chain expansion are still very attractive and this period of uncertainty is seen by retailers as an important consolidation imperative for an industry that has been growing at 30-40 percent p.a.2 over the past decade.
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INTRODUCTION
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The world retail is derived from the French term retailer meaning to cut a piece of or to break bulk . Retailing is the part of marketing mix. It include the 6Ps (product, price, place, promotion, people, presentation) . Retailing involves a direct interface with the costumers and coordination of business activities right from the design stage of a product to its delivery as well as post delivery service to the costumers. According to Kotler: Retailing includes all the activities involved in selling goods or services to the final consumers for personal, non business use.
The Indian retail is dotted by traditionally market place called bazaars or haats comprises of numerous small and large shops, selling different or similar merchandise .
GENESIS OF ORGANIZED RETAILING IN INDIA

Organized retailing appears in the Indian horizon in the 70s when shops like Raymonds, Nallis and Bata set up there exclusive stores or franchisees. In early 80s the emergence of Akbarallys in Mumbai and Spencers in Chennai. The stores later involved into multi chain outlets and were the first to establish the concept of organized retail in India. During 90s with the opening up of the Indian economy through LPG (Liberalization, Privatization, Globalization) , new retailing formats and exclusive outlets like Shoppers stop (1991) and Pantaloons (1997) appeared in India . Shoppers stop opened two outlets and RPGs Giant hypermarket followed suit.
Industry Evolution:6|Page
Traditionally retailing in India can be traced to The emergence of the neighborhood Kirana stores catering to the convenience of the consumers Era of government support for rural retail: Indigenous franchise model of store chains run by Khadi & Village Industries Commission
1980s experienced slow change as India began to open up economy. Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches The latter half of the 1990s saw a fresh wave of entrants with a shift Manufactures to Pure Retailers. from
For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books. Post 1995 onwards saw an emergence of shopping centers, mainly in urban areas, with facilities like car parking targeted to provide a complete destination experience for all segments of society
Emergence of hyper and super markets trying to provide customer with 3 Vs Value, Variety and Volume Expanding target consumer segment: The Sachet revolution - example of reaching to the bottom of the pyramid. At year end of 2000 the size of the Indian organized retail industry is estimated at Rs. 13,000 crore
Industry wise impact of recession in India:7|Page
80 70 60 50 40 30 20 10 0 Column1 Column2 Column3
An impact score of 0-15 indicates low impact An impact score of 16-50 indicates moderate impact An impact score of > 50 indicates high impact
RETAIL FORMATS IN INDIA

India is a country with a very large geographic area of 2,973,190 sq km measuring 3,214 km from north to south & 2,933 km east to west. The growth in population and change in consumption style have given way to growth in retailing. The Indian retail sector would touch US $365 billion in 2008 compared to US $300 billion in earlier year. The countrys retail industry is excepted to touch US $440billion landmark by 2010 with a year on year growth of 30-35 % says the study by the ASSOCHAM.
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Indian Retail Formats

Name of format Hypermarket the Description Mother of all retail formats and offers everything from foods to dry grocery to hardware to electronics. Typically, a hypermarket spans more than 100,000 sq.ft. of space and be located outside the city center. Focus is on variety of foods, grocery and household item is located in residential areas Carries various departmnts such as apparls, housewere, furniture, jewellery and appliances, but is much smaller than a hypermarket in term of space and SKUs. Offers accessibility, so is located in crowed neighbourhools. Stock a single brand and could be either company owned or franchised. Example Future groups big bazaar, Spencers Hypermarket and Trents Star India Bazaar.
Supermarket
Food world; Food Bazaar Shoppers Stop, Westside,Lifestyle, Pantaloon etc.
Departmental Stores
Convenience Stores Exclusive outlet
Discount Stores
Cash-n-carry
Nilgiris in south; 24/7 in delhi. Raymond; Madura garments; LG; Samsung: Maruti; Huyundai etc. Offers no frills such as spacious, well-lit Subhiksha and A.C. retail space , but makes up by marketing down MRP. It is a B2B format, where the retailer sell Metro to shopping establishment and large institutional customers. formats in India
Retail
Hypermarts/supermarkets: large self-servicing outlets offering products from a variety of categories.

Mom-and-pop stores: they are family owned business catering to small sections; they are individually handled retail outlets and have a personal touch. 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.
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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. 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. 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. Specialty stores: are retail chains dealing in specific categories and provide deep assortment. Mumbai's Crossword Book Store and RPG's Music World are a couple of examples.
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Venture into under penetrated markets: Rural Retailing

India has witnessed a rapid increase in incomes with per capita incomes soaring to USD 1000 in 2008 from miniscule USD 418 in 1998. The growth has not been restricted to urban India, as the per capita income in rural India has grown by 50 percent in past 10 years.17 Among key reasons for the latter are rising commodity prices, improving productivity and higher production. The increasing availability of basic infrastructure, improving access to funding, employment guarantee schemes, better information systems and growing literacy are together helping bring prosperity to rural households. With additional fiscal incentives provided by the government, rural India is set to witness further boost in overall farm incomes. Overall, there is a huge market which is waiting to be served, ready to splurge, willing to explore new products and services. Retailers can tap on their wallets given they do their homework well. According to India Retail Report 2009 by Images, "India's rural markets offer a sea of opportunity for the retail sector. The urban-retail split in consumer spending stands at 9:11, with rural India accounting for 55 percent of private retail consumption." As per IBEF, rural India accounted for almost half of the Indian retail market, which was worth about USD 300 billion. With most of the retailmarkets getting saturated in Tier I and Tier II cities, the next phase of growth is likely to be seen in the rural markets. Major domestic retailers have started setting up farm linkages. Few examples include, DCMs Hariyali Kisan Bazaars, Pantaloon Godrejs joint venture Aadhars, ITCs Choupal Sagars, Tatas Kisan Sansars and Reliance Fresh are some of the established rural retail chains.
ITC-CHOUPAL SAGAR: A successful rural Retailing Model
CONCEPT Hub and spoke model innovating engagement with farmers of rural India. A rural shopping mall where farmers can sell their commodities and can buy almost everthing including cosmatics, garments, electronics, appliances and evean tractors. It searves as an agri-sourcing centers and facilitation centers. IMPECT Chaupal sagar stores have become meeting point for farmers to transact commerce and exchange usuful information. ITC awarded innovation for India Award 2006 for echaupal in the social innovation category for business org. ee-chaupal specally cited in govt.of indias Economic survey of 2006-07 for its transformational impact on rural lives. e-chaupal is one of the top five alternative channels for LIC policy sales, and account for 10 % for the national weather insurance market.
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Many retail players are capitalizing on rural Indias potential by partnering with farmers
Triveni (Khushali bazaar) Triveni aims at increasing the association of rural communities. Currently the company has 2 owned and 4 franchises stores. Each store provides to farmers agri inputs, agri equipment for sale and rental, irrigation equipment, cattle feeds, FMCG, petrol, diesel, two wheelers and tractors, and other goods to complete the farmers basket of goods ITC (e chaupal) IITC procures all materials directly from the producers, thereby cutting down the middlemen all together It pays upfront to the producers, meaning there is no credit system HUL (Shakti) Access to the remote rural areas and market potential Sell its products through women self-help groups who operate like a direct-to-home team of sales women in inaccessible areas where HLL's conventional sales system does not reach. DCM (Hariyali Kissan Bazaar) Caters for about 15-20,000 farming households and at least 70,000 acres of agricultural land. Godrej Agrovet (Aadhar) Complete solution provider to the farmers rendering farm advisory services, credit facility to farmers, providing up to date information on weather, price, soil & water testing facility, FMCG / consumer durables, etc. to farmers.
Reliance Retail (Fresh & Fresh plus) Focusing on sourcing directly from farm gate for Fresh & Fresh Plus. Aimed at connecting farms & unorganized retail by setting up 1600 farm-supply hubs across the country Tata (Tata Kisan Sansar) Provide end-to-end solutions, right from what crops to grow to how to sell them for the maximum returns
M&M (Shublabh) Shublabh interfaces with bank for the financing w.r.t the fertilizer and seeds firm ,as well as for the delivery of produce to the end buyer and payment to farmer
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MAJOR RETAILERS IN INDIA
Indias top retailers are largely lifestyle, clothing and apparel stores This is followed by grocery stores Following the past trends and business models in the west retail giants such as Pantaloon, Shoppers Stop and Lifestyle are likely to target metros and small cities almost doubling their current number of stores These Walmart wannabes have the economy of scale to be low medium cost retailers pocketing narrow margin
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Top 10 Retailers in India
1. Pantaloon Retail: It is headquartered in Mumbai with 450 stores across the country employing more than 18,000 people. It can boast of launching the first hypermarket Big Bazaar in India in 2001. An all-India retail space of 5 million sq. ft. which is expected to reach 30 mn by 2010. It is not only the largest retailer in India with a turnover of over Rs. 20 billion but is present across most retail segments - Food & grocery (Big bazaar, Food bazaar), Home solutions (Hometown, furniture bazaar, collection-i), consumer electronics (e-zone), shoes (shoe factory), Books: music & gifts (Depot), Health & Beauty care services (Star, Sitara and Health village in the pipeline), e-tailing (Futurbazaar.com), entertainment (Bowling co.) One of their recent innovations include e-commerce hybrid format of small shops , the area for these stores will be 150 sq. ft. fitted with 40 digital screens. Customers will be encouraged to browse through the entire range of products on digital screen. They will be
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able to place the order, the delivery of which will be arranged by the shop to their homes within a few hours
Food & Grocery: Big Bazaar, Food Bazaar Home Solutions: Hometown, Furniture Bazaar, Collection-i Consumer Electronics: e-zone Shoes: Shoe Factory Books, Music & Gifts: Depot Health & Beauty Care: Star, Sitara E-tailing: Futurebazaar.com Entertainment: Bowling Co.
2. K Raheja Group They forayed into retail with Shoppers Stop, Indias first departmental store in 2001. It is the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS). They have signed a 50:50 joint venture with the Nuance Group for Airport Retailing. Shoppers Stop has 7, 52, 00 sq ft of retail space with a turnover of Rs 6.75 billion. The first Hypercity opened in Mumbai in 2006 with an area of 1, 20,000 sq. ft. clocking gross sales of Rs. 1 bn in its first year.
Crossword brand of book stores, Homes stop a store for home solutions, Mothercare a concept stocking merchandise related to childcare are also owned by them. Recently, Rahejas have signed an MoU with the Home Retail Group of UK to enter into a franchise arrangement for the Argos formats of catalogue & internet retailing. The group has announced plans to establish a network of 55 hypermarkets across India with sales expected to cross the US$100 million mark by 2010.
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3. Tata group:
Established in 1998, Trent - one of the subsidiaries of Tata Group - operates Westside, a lifestyle retail chain and Star India Bazaar - a hypermarket with a large assortment of products at the lowest prices. In 2005, it acquired Landmark, India's largest book and music retailer. Trent has more than 4 lakh sq. ft. space across the country. Westside registered a turnover of Rs 3.58 mn in 2006. Tatas has also formed a subsidiary named Infiniti retail which consists of Croma, a consumer electronics chain. It is a 15000-17000 sq. ft. format with 8 stores as of September 2007.
Another subsidiary, Titan Industries, owns brands like Titan, the watch of India has 200 exclusive outlets the country and Tanishq, the jewellery brand, has 87 exclusive outlets. Their combined turnover is Rs 6.55 billion. Trent plans to open 27 more stores across its retail formats adding 1.5 mn sq ft of space in the next 12 DLF malls. Trent Westside Star India Bazaar
4. RPG group: One of the first entrants into organised food & grocery retail with Foodworld stores in 1996 and then formed an alliance with Dairy farm International and launched health & glow (pharmacy & beauty care) outlets. Now the alliance has dissolved and RPG has Spencers Hyper, Super, Daily and Express formats and Music World stores across the country. RPG has 6 lakh sq. ft. of retail space and has registered a turnover of Rs 4.5 billion in 2006.
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It is planning to venture into books retail, with the launch of its own bookstores Books and Beyond by the end of 2007. An IPO is also in the offering, with expansion to 450+ MusicWorld, 50+ Spencer's hyper outlets covering 4 million sq. ft. by 2010. 5. Landmark group: were launched in 1998 in India. Lifestyle is spread across six cities, covering 4.6 lakh sq. ft. with a turnover of Rs 3.5 billion in 2005. A new division named Lifestyle International has emerged for their international brands business comprising Bossino, Kappa and Springfield in their portfolio. Their retail mix includes Home solutions (Home centre), fashion (lifestyle, landmark International), value retailing (max retail), hypermarkets & supermarkets (Max), kids entertainment (Funcity). They plan to invest Rs. 300 crores in the next two years to expand on Max chain, and Rs 100 crores on Citymax 3 star hotel chain. They have already instituted a separate company christened Citymax Hotels (India). 6. Piramal Group In September 1999, Piramal Enterprises announced their arrival into retail with the launch of three retail concepts: India's first true shopping mall of international standards, called Crossroads; a lifestyle department store named Piramyd Megastore; and a family entertainment centre known as Jammin. Piramyd Megastore and Jammin were anchor tenants for Crossroads (recently sold to Pantaloon for Rs 4 billion). In 2001, the group entered the business of food & grocery retail with the launch of TruMart supermarkets in Pune. They have around 18 TruMart stores covering 1.90 lakh sq. ft. registering a turnover of Rs 37.6 mn in 2005. Piraymd Megatsores contributes more than 70 % to their retail mix with a turnover of Rs 112.8 mn. They plan to open 150 stores covering 75 mn sq ft of retail space in the next 5 years. 7. Subhiksha
Subhiksha is a Chennai-based, decade old, no frills, food, grocery, pharma and telecom, discount retail chain. ICICI Venture Capital holds 24% in the equity capital of Subhiksha.
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It has more than 500 stores across the country covering a retail space of more than 1 million sq ft with a registered turnover of Rs 3.34 bn in 2006. It has a planned investment of Rs.300 crores to ramp up its operations to 1200 stores by 2008. New but potential BIG players
8. Bharti-Walmart Their plans include US$ 7 bn investment in creating retail network in the country including 100 hypermarkets and several hundred small stores. They have signed a 50:50 percent joint venture agreement with Walmart. Wal-Mart will do the cash & carry while Bharti will do the front-end. 9. Reliance
Indias most ambitious retail plans are by reliance, with investments to the tune of Rs. 30,000 cr ($ 6.67 bn) to set up multiple formats with expected sales of Rs 90,000 crores ($20 bn) by 2009-10. There are already more than 300 Reliance Fresh stores and the first Reliance Mart Hypermart has opened in Ahmedabad. The next ones are slated to open at Jamnagar, followed by marts in Delhi / NCR, Hyderabad, Vijaywada, Pune and Ludhiana. 10. AV Birla Group They have a strong presence in apparel retailing through Madura garments which is subsidiary of Aditya Birla Nuvo Ltd. They own brands like Louis Phillipe, Van Heusen, Allen Solly, Peter England, Trouser town. In other segments of retail, AV Birla Group has announced investment plans of Rs 8000 9000 crores in the first 3 years till 2010. The acquisition of Trinethra (food & grocery) chain in the south has moved their tally to 400 stores in the country. Their More range of 15 supermarkets are slated to open at Nashik, Pune and other tier II cities in Western India in 2007.
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Phillipe Allen Solly Van Heusen Peter England More
Quick facts on Indian Retail sector
Indian Retail sector is the fifth largest global retail destination. India retail market is dominated by the unorganized sector. The top five companies in retail hold a combined market share of less than 2%. The Indian retail market has been ranked by AT Kearney's eighth annual Global Retail Development Index (GRDI), in 2009 as the most attractive emerging market for investment in the retail sector. Currently the share of retail trade in India's GDP is around 12 per cent, and is estimated to reach 22 per cent by 2010. According to Government of India estimate the retail sector is likely to grow to a value of Rs. 2,00,000 crore (US$45 billion) and could yield 10 to 15 million retail jobs in the coming five years; currently this industry employs 8% of the working population. India continues to be among the most attractive countries for global retailers. According to the Department of Industrial Policy and Promotion, approximately US$ 47.43 million was the amount of Foreign Direct Investment (FDI) inflow as on September 2009, in single-brand retail trading. More than 80% of the retail sector in the country is concentrated in the large cities. A study reveals that among the more than 20 locations, for organized retail in India, Mumbai was found to be the most preferred location followed closely by Bengaluru in the second position.
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,
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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. INDIA A Vibrant Economy & Resplendent Market 4 th Largest economy in PPP terms after USA, China & Japan To be the 3 rd largest economy in terms of GDP in next 5 years. 2 nd fastest growing economy in the world. The US $ 580 billion economy grew 8.2 percent in the year 03-04 Among top 10 FDI destinations Stable Government with 2 nd stage reforms in place Growing Corporate Ethics (Labour laws, Child Labour regulations, environmental protection lobby, intellectual and property rights, social responsibility). Major tax reforms including implementation of VAT. US $ 130 billion investment plans in infrastructure in next 5 years 2 nd Second most attractive developing market, ahead of China 5th among the 30 emerging markets for new retailers to enter A country with the largest young population in the world- over 867 million people below 45 years of age! More English speaking people in India than of in the whole of Europe 300 million odd middle class - the Real consumers - is catching the attention of the world With over 600 million effective consumers by 2010 India to emerge as one of the largest consumer markets of the world by 2010.
India ranks 39 as preferred destination for top retailers:India ranks 39 on the list of the top 280 global retailers as a preferred destination to establish operations. However, in the Asia-Pacific region, India ranked a little higher at 11, while the first and
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second
slots
were
taken
by
China
and
Japan.
Mapping the global footprint of leading international retailers across 67 countries, the survey by global real estate service provider CB Richard Ellis indicates that the UK continues to be in the lead as Europe maintains its ability to attract the cream of international retail. Despite the global economic slowdown, many retailers, especially cash-rich private companies, continued their expansion plans in the past 12 months. The survey saw retailers expand their international presence by an average of 12 per cent in the last year, being represented in two more countries than in the previous year. This was primarily driven by clothing, footwear and accessories retailers from Europe. Interestingly, retailers have continued not just to internationalise, but to globalise 40 per cent of all new store openings in 2008 were outside the retailer's home region. Emerging markets have been the primary beneficiaries of the retailer expansion activity, with the West Asian , Asian and Eastern European countries dominating the list of new openings. Two common drivers of the trend appeared to be rising local consumer affluence and opening of major shopping centres. Mr Anshuman Magazine, Chairman and Managing Director, CB Richard Ellis, said since the last survey done a year ago, India has moved from the 44th position to the 39th position. This does not justify the size of our economy. Even China has moved to the sixth position globally from 10 last year. India's ranking among the Asia Pacific countries too is at 11, behind smaller countries such as Singapore and Indonesia. This ranking is not only because FDI in retail is not allowed but also due to relatively lower purchasing power, cost and availability of real estate, besides infrastructure and supply chain management issues. The UK outperformed other major European economies with 58 per cent of retailers surveyed present there. Though Europe continues to dominate the top markets, emerging economies such as China, Russia and the UAE had gained ground in the last 12 months. China, Russia and Japan performed well in 2008, ranking six, seven and 14 respectively. West Asian Middle Eastern countries also saw a marked increase in retailers entering the region. The UAE jumped two places in the ranking, from six in 2007 to fourth in 2008, with 45 per cent of international retailers present, compared to 39 per cent in 2007. Saudi Arabia moved up from the 28th position in 2007 to 15 in 2008, with the presence of 37 per cent of international brands.
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Indian Retail V/S Worlds Retail
Indian retail is fragmented with over 12 million outlets operating in the country. This is in comparison to 0.9 million outlets in USA, catering to more than 13 times of the total retail market size as compared to India India has the highest number of outlets per capita in the world - widely spread retail network but with the lowest per capita retail space (@ 2 sq. ft. per person) Annual turnover of Wal-Mart (Sales in 2001 were $219 billion) is higher than the size of Indian retail industry. Almost 100 times more than the turnover of HLL (India's largest FMCG company). Wal-Mart - over 4,800 stores (over 47 million square meters) where as none of India's large format store (Shoppers' Stop, Westside, Lifestyle) can compare. The sales per hour of $22 million are incomparable to any retailer in the world. Number of employees in Wal-Mart are about 1.3 million where as the entire Indian retail industry employs about three million people. One-day sales record at Wal-Mart (11/23/01) $1.25 billion - roughly two third of HLL's annual turnover. Developed economies like the U.S. employ between 10 and 11 percent of their workforce in retailing (against 7 percent employed in India today). 60% of retailers in India feel that the multiple format approach will be successful here whereas in US 34 of the fastest-growing 50 retailers have just one format Inventory turns ratio: measures efficiency of operations. The U.S. retail sector has an average inventory turns ratio of about 18. Many Indian retailers KPMG surveyed have inventory turns levels between 4 and 10. Global best-practice retailers can achieve more than 95 percent availability of all SKUs on the retail shelves (translating into a stock-out level of less than 5 %).The stock-out levels among Indian retailers surveyed ranged from 5 to 15 percent.
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Share of organized & unorganized retail with comparison

organised unorgenised
USA TAIWAN MALESIA THAILAND BRAZIL INDONESIA CHINA INDIA PAKISTHAN 3 1 20 30 40 36 55
85 81 45 60 64 70 80 97 99
15 19
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Recent Trends
Retailing in India is witnessing a huge revamping exercise as can be seen in the graph India is rated the fifth most attractive emerging retail market: a potential goldmine. Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3 percent or US$ 6.4 billion As per a report by KPMG the annual growth of department stores is estimated at 24% Ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT Kearney. Multiple drivers leading to a consumption boom: Favorable demographics Growth in income Increasing population of women Raising aspirations : Value added goods sales Food and apparel retailing key drivers of growth Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number of double-income households. More successful in cities in the south and west of India. Reasons range from differences in consumer buying behavior to cost of real estate and taxation laws. Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across most categories of consumption ITC is experimenting with retailing through its e-Choupal and Choupal Sagar rural hypermarkets. HLL is using its Project Shakti initiative leveraging women self-help groups to explore the rural market.
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Mahamaza is leveraging technology and network marketing concepts to act as an aggregator and serve the rural markets. IT is a tool that has been used by retailers ranging from Amazon.com to eBay to radically change buying behavior across the globe. e-tailing slowly making its presence felt.
Companies using their own web portal or tie-sups with horizontal players like Rediff.com and Indiatimes.com to offer products on the web.
Growth Phase of Indian Retail Sector to Continue
The retail industry in India is currently growing at a great pace and is expected to go up to US$ 833 billion by the year 2013. It is further expected to reach US$ 1.3 trillion by the year 2018 at a CAGR of 10%. As the country has got a high growth rates, the consumer spending has also gone up and is also expected to go up further in the future. In the last four year, the consumer spending in India climbed up to 75%. As a result, the India retail industry is expected to grow further in the future days. By the year 2013, the organized sector is also expected to grow at a CAGR of 40%.
The phase of high growth of Indian retail sector is expected to Continue due to huge amounts of investments and breaking up of traditional concepts in this sector. These are leading to various changes and are providing further boost to the growth of the Indian Retail Sector. The Indian Retail Sector that includes the traditional retail and the modern retail is estimated to grow at a very fast pace from US$ 336 billion, in 2006 to US$ 590 billion, by 2011. The traditional retail sector is expected to increase from US$ 324 billion, in 2006 to US$ 493 billion, by 2011. The share of the modern retail in the Indian Retail Sector is also estimated to increase from 4% in 2008, to 16% in the next five years. This exceptional growth is expected to take place in the retail sector due to large amounts of investment
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which is estimated to be about US$ 35 billion in the next five years. The "cash- andcarry" activities are expected to receive the majority of investments. The maximum amount of growth in the Indian Retail Sector will be registered in the topmost 50 to 60 markets that are located in the urban areas. These markets would be mostly supermarkets and hypermarkets. However, these supermarkets and hypermarkets will also witness fast erosions in their margins. Further, it is estimated that in the longer run, the convenient stores that are located in the local neighborhood will continue to survive. A major focus area in the Indian retail sector is the supply chain management. In the western countries, the retail sector has a highly developed system of supply chain. However developments in supply chain in Indian retail sector has been quite slow. Other areas that need attention for the growth of the Indian retail sector to continue includes duty and tax structures, infrastructure, rising land prices and effective trend forecasting. Trend forecasting needs to be done in the country especially in the segments of cosmetics, apparel and footwear for this will help the retail companies to curtail their expenses substantially. Also another area that requires attention is manpower for it is estimated that the Sector of Indian Retail will suffer from shortage of manpower by about a million people, by 2012. The chains in the Indian retail sector need to frequently change their stocks and also adopt concepts like home delivery. If all these areas are given immediate attention then the growth phase of Indian retail sector would continue at a very fast pace. The Indian retail sector would then witness the setting up of retail parks that are flourishing in Europe. Further, the growth of the Indian retail sector would help in making the country ready for big retailers by 2015- 2016.
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FUTURE TRENDS
Lifestyle International, a division of Landmark Group, plans to have more than 50 stores across India by 201213. Shoppers Stop has plans to invest Rs250 crore to open 15 new supermarkets in the coming three years. Pantaloon Retail India (PRIL) plans to invest US$ 77.88 million this fiscal to add up to existing 2.4 million sq ft retail space. PRIL intends to set up 155 Big Bazaar stores by 2014, raising its total network to 275 stores. Timex India will open another 52 stores by March 2011 at an investment of US$ 1.3 million taking its total store count to 120. In the first six months of the current fiscal ending September 30, 2009, the company has recorded a net profit of US$ 1.2 million. Australia's Retail Food Group is planning to enter the Indian market in 2010. It has plans to clock US$ 87 million revenue in five years. In 20 years they expect the India operations to be larger than the Australia operations.
Consumer and retail forecast

The research said that the retail sales are growing fastly in few years. As given in the table the retail sale is in year 2010 is 27,107 bn which was 15,409bn in year 2005. Retail Trade 2005 15,409 Retail Sales(Rs bn) 349.4 Retail Sales(US$ bn) Retail Sales volume growth 6.0 (%) Retail Sales US$ value 13.6 growth (%) 2006 17,360 385.8 7.5 10.4 2007 19,465 421.3 7.7 9.2 2008 21,715 467.0 6.9 10.8 2009 24,215 516.3 6.8 10.6 2010 27,107 564.7 7.3 9.4
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Big Bazaar bags the Most Admired F&G Retailer of the Year at FFI 2010
Food Forum India (FFI) 2010 last night recognised the Indian food industrys top achievers in a glittering ceremony of the Coca-Cola Golden Spoon awards at the Renaissance Hotel and Convention Centre, Mumbai. While Big Bazaar was one of the biggest winners on the night, the audience was mesmerised with scintilating performances by renowned singer Shibani Kashyap and stand up comedian Ash Chandler.
Big Bazaars award as the Most Admired F&G Retailer of the Year: Large Formats was recognition for the companys tremendous growth in a challenging financial environment from 110 stores in 2008-09 to 125 today. Big Bazaar narrowly beat out a competitive field of nominees for the award, which included Spencer's Hyper, Easyday Market, Hypercity, Star Bazaar, More MegaStore and Spar. Walmart's India Retail venture with Bharti Retail's Easyday with 56 stores won them the Coca Cola Golden Spoon Award for the 'Most Admired Food & Grocery Retailer of the Year: Small and Medium Formats'. Pantaloon Retail claimed the Most Admired F&G Retailer of the Year: Private Label on the back of news that its Future Group division is set to register a turnover of Rs.440 crores for the sale of food and packaged food through its private label. Other nominees in the category were Reliance Retail, Spencer's Retail, Aditya Birla Retail, Max Hypermarket and
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Trent. The Most Admired F&B Retailer of the Year: Cafes, Juice Bars & Parlours category was one of the most competitive of the night. Cafe Coffee Day was voted the winner by industry members ahead of Barista, Costa Coffee, Baskin Robbins and Jus Booster Juice. The award for Indias best premium restaurant went to Indigo (Most Admired F&B Retailer of the Year: Premium Restaurant) while Dominos Pizza won the award for Most Admired F&B Retailer of the Year: QSR Foreign Origin among stiff competition from KFC, McDonalds, Subway and Pizza Hut.
The evening began with a bang as renowned singer Shibani Kashyap belted out some popular Bollywood hits and blues. Stand-up comedian Ash Chandler also helped ease the tension at the awards with a laugh-a-minute stand-up routine. The Coca-Cola Golden Spoon Awards recognise excellence in food retailing and honour the brave innovative spirit of leaders in the dynamic Indian food retail and service industry. Food retailers are leading a change that has redefined consumption habits in India, resulting in a change in food tastes, preferences, awareness, consciousness and choices over the past few years. The Food Forum India is an annual two-day conference, exhibition and awards ceremony for members of the Indian food industry. It is the largest congregation of international and Indian food retailers, manufacturers, organisations and minds in the food business. It will discuss topics relevant to a vast array of food business segments, such as food retail, food design, food technology and processing, food logistics and support, food services and IT. IndiaRetailing Bureau
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Aditya Birla Retails plans expansion in India
Aditya Birla Group, the business conglomerate is set to increase the number of its retail outlets in India. The company is on an expansion mode and has announced to increase the number to 500 such retail stores across India. The group entered into the Indian retail business a year ago and has 400 retail outlets called 'More'. It has strong presence in the cities of Delhi, Mumbai, Chennai, Vadodara, Bangalore, Hyderabad, Mangalore, Pune, Mysore, Vizag and Vijaywada. During the launch of its Vadodara outlet of 'More', Mr. Kumar Mangalam Birla, Chairman of the group, said by the end of March 2008 the numbers of 'More' retail outlets to be increased to 500 from 430. Mr. Birla points out that his company's first retail store was launched in Pune, in May 2007 and now has presence in almost all major and minor cities of India. Industry sources believe that at this rate of growth the company may also end up the financial year 2008-2009 with 500 new stores of "More". Dedicated Electronic Supermarkets are also in the pipeline of the company and is expected to roll out a few outlets very soon. He further said that the estimated size of the Indian retail market is around US $ 300 billion and the cumulative market share of supermarkets and hyper markets in India is less than 4%. Although the Indian retail sector is registering decent growth but huge potential is still untapped and the multi-chain retail stores are yet to reach their desired level of growth in India. He added that the Indian consumer was long due for world class shopping experience and with increased per capita income the target seems achievable. Mr. Birla also said that his company has aggressive expansion plans across India. At present the company has two mega-stores in the country and it wishes to increase its number substantially soon. Megastore is a shopper's paradise it offers more than 60,000 products catering to each and every need of a household.
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The company has already identified few development sites and is on the look out for more viable options for infrastructure development. With the launch of India's first hypermarket the 'More Mega Store', the company took a giant step in making its mark in the organized retail market of India. This colossal hypermarket is about 70,000 square feet and the average size of each mega store would be of around 80,000 square feet. Further, these giant retail stores house around 60,000 SKUs of different types and brands of merchandise. Mr. Birla said that 10 more hypermarkets are on offer. He points out bottle necks like high real estate prices in the Tier I cities, which is a stagnating factor and most of the second rounds of hypermarkets can be expected in Tier II cities. Moreover, glitches like protest from traders and middleman towards growth of organized retail in India may eat away the growth opportunity it offers.
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BIBLIOGRAPHY
INDIA TODAY BUSINESS WORLD INDIAN JOURNAL OF MARKETING WIKIPEDIA.COM SCRIBD.COM MARKETING MANAGMENET (PHILIP KOTLAR) ICFAI NATION UNIVERCITY PRESS www.e&y.com www.indiajournalofmarketing.com www.ibet.com www.scribd.com www.slidishari.com www.managementparadise.com
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Development of Indian Retail Market

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