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CHAPTER II
INTRODUCTION
This chapter deals with concepts and evolution of retailing; growth and
general and growth and development of food & grocery retailing in particular
chapter ends with stating the changing trends of store base grocery retail
formats.
The word Retail is derived from the French Word Retaillier meaning to
cut a piece off or to break bulk. In simple terms this means a firsthand
transaction with the customer. Retailing thus might be understood as the final
services directly to the consumers for their personal, family or household use.
Retailing involves a direct interface with the customer and the coordination of
business activities from end to end- right from the concept or design stage of a
Retailing forms an integral part of the Marketing Mix. In this marketing mix
Place refers to the distribution and availability of the products at the various
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locations. Customers were first introduced to the product through the retail
stores. Organizations would sell their products and services through these
product and the customers expectations of the product. Retail stores would
also serve as the communication hub of the customer. At the point of sale or the
Retail was the final stage of any economic activity. By virtue of this
retail store was any business enterprise whose sales volume comes primarily
from retailing.
wholesaler or retailer- was doing retailing. It would not matter how the goods
or services were sold (by person, mail, telephone, vending machine, or internet
or where they are sold- in a store, on the street, or in the consumers home).
The North American Industry Classification system (NAICS) specifies that the
A revolution in the shopping habits of the people across the entire world had
virtually brought the supermarket to the main street. This revolution was
distribution system that delivers food and other products to the consumer in
unprecedented abundance, variety and quality. It had gone through its natural
process of evolution in all areas from the initial concept of the supermarket and
department store to the hypermarket and shopping mall. It was believed that the
first true department store in the world was founded in Paris in 1852 by
Aristide Boucicaut and was named Bon Marche. Then, the department store
business was a bare-bones operation. It was only after World War II that
retailers in the West began to upgrade their services, facilities and merchandise
In the early part of the twentieth century, the consumers, while shopping
for their household purpose, bought different products at different shops and at
different places. It was back then that chain stores which existed such as the
Great Atlantic and Pacific Tea Company (now known as the A & P chain of
stores) started introducing new methods of food selling. Soon these chain stores
too began to sell different products under one roof (one-stop shopping). This
chain store revolution had compelled the small merchants to open self-service
stores of their own in order to reduce business expenses and compete with
chain store prices. The supermarket revolution was first sparked off its span in
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the 1920s and by the 1930s; the self- service supermarket concept had become
quite popular with the housewives. It was sparked off by the success of
throughout America. It was in the mid-1930s, that A & P too opened its first
supermarket in the mid-West. Very soon other chains followed, and large
grew, they extended the self-service concept to other foods besides groceries.
In the 1940s, pre-packing of food and groceries began and customers liked the
been weighed and priced. Over a period of time, this pre-packaging and
supermarket of self- service had become the rule rather than an exception all
over America. By the late 1950s, about 40 % of the American population was
However, the competition among the retail stores were so fierce that it had
especially in the latter half of the twentieth century, but also promises to
unleash more excitement in this new millennium. Many of the old and informal
store formats had been completely transformed into the scientifically designed
new formats.
The latter half of the 20th Century, in both Europe and North America, has
seen the emergence of the supermarket as the dominant grocery retail form.
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The reasons why supermarkets have come to dominate food retailing are not
hard to find. The search for convenience in food shopping and consumption,
coupled to car ownership, led to the birth of the supermarket. As incomes rose
and shoppers sought both convenience and new tastes and stimulation,
supermarkets were able to expand the products offered. The invention of the
bar code allowed a store to manage thousands of items and their prices and led
superstore was born. On the Global Retail Stage, little has remained the same
over the last decade. One of the few similarities with today is that Wal-Mart
was ranked the top retailer in the world then and it still holds that distinction.
Other than Wal-Marts dominance, theres little about todays environment that
looks like the mid-1990s. The global economy has changed, consumer demand
has shifted, and retailers operating systems today are infused with far more
technology than was the case six years ago. Saturated home markets, fierce
governments have opened up their economies as well, to the free markets and
foreign investment that has been a plus for many a retailer. However, a more
near-term concern, has been the global economic slowdown that has resulted
opinion that retailer concerns in 2003 have turned to deflation, lack of pricing
world tourism and declining consumer confidence. But, even before the global
Technology has become the real enabler for retailers over the last six years.
Supply chain innovations for retailers were particularly strong in the second
half of the 1990s and have continued into today. With all the emphasis on
based: finding new markets through globalization efforts. In 1990s, more than
half (53 percent) of the top 200 retailers operated in only one country. Today,
only 44 per cent remain single-country merchants. This globalization trend can
only intensify in the years ahead. The benefits of increased sales and greater
The global retail industry has travelled a long way from a small
beginning to an industry where the world wide retail sales alone are valued at $
12.1 trillion (Source: 2009 Global Retail Report, Data monitor). The top 200
retailers alone account for 30% of world-wide demand. Retail sales being
(consumer confidence) to buy, compliments the fact that the money spent on
The leader has in-disputably been the USA where some two-thirds or $ 6.6
Retail turnover in the EU is approximately Euros 2000 billion and the sector
Positive forces at work in retail consumer markets today include high rates of
personal expenditures, low interest rates, low unemployment and very low
inflation. Negative factors that hold retail sales back involve weakening
consumer confidence.
From the very inception of retail business, retailers had been involved in
procurement of merchandise. However, retailers from all over the world were
venturing beyond their own borders to establish stores even in other countries.
Thus, the business of retailing could become a global business. Over the last
decade, it was found that there had been sweeping changes in the general
The world over retail business was dominated by smaller family run chain
stores and regionally targeted stores, but gradually more and more markets in
the western world were being taken over by billion dollar multinational
major development in recent times had been the emergence of varied retail
formats that had started operating in most product categories. For instance,
there were large department stores that offer a huge assortment of goods and
services. There were discount stores that offer a wide array of products and
compete mainly on price. There were also the high-end retailers who target
extremely niche markets. Over the past few decades, retail formats had been
the early 20th century had been given way to mass merchandise( Wal-Mart),
stores (7-Eleven). The global retailing industry group is defined here as the
sum of six segments, each comprising only business to consumer (B2C) sales
The food and grocery segment includes food, beverages, tobacco, household
care, personal care, and related products. The electrical and electronics segment
equipment, games consoles, and related products. The house and garden
products, home improvement products, and related goods. The media products
segment includes books, newspapers, stationery, recorded music and video, and
related products.
The Food Retail Industry in the Far East has evolved into what could be called
the breeding ground for emerging models with countries like Singapore
being the home to some of the big players in the industry in these parts of the
world. The presence of all the major players of the retailing industry is found in
Singapore. Singapore has 2 hypermarkets, one run by Carrefour and the other
government, there are slightly more than 11,000 market stalls operating in 150
markets located all across Singapore Island. The markets further spread to
China, Thailand, and Malaysia thanks to the major support that the local
establishing their presence. Singapore, Malaysia and Thailand not only fueled
the retail industry within the country, but also attracted hordes of tourists to
experience the shopping experiences that they created in these islands. The
markets are now saturated with no additional space for a new entrant and are
expected to consolidate within the next few years. Apart from Singapore,
retailers map. According to the latest annual report from the U.S. Census
Bureau(2009) the toral amount of sales for U.S. retail industry (including food
services and automation) was U.S.$ 4.13 trillion. The leaders in sales are Ito-
Yokado, Aeon, Daiei, Takashimaya, and Uny, in that order. Several retailers,
stores, which are small and suitable in a country where land is very expensive,
continue to do well. Food, in fact, has been one of the few sectors that have
experienced growth over the last several years. A period of shake up in the
industry is likely now that Wal-Mart has entered Japan. Numerous smaller,
less efficient retailers may become takeover targets. The entire Japanese retail
sector will likely undergo some form of restructuring over the next decade as a
China, the retail markets have mushroomed over the years of intense economic
development to a very considerable size. The total volume of retail sales for
consumer goods and food increased by 10.6 percent in China over the last
couple of years which shows tremendous growth. Consumer spending has held
strong. A decade ago, the top five retail enterprises in China were all traditional
merchandise companies, but now the top five are mainly supermarkets and
chain stores. The world is enamoured with Chinas potential and opportunities.
But in medium-sized and small cities and rural areas, traditional retailing
the greater proportion. On the other hand, the distribution of non-food products
benefited from both food and non-food retailers. For example, some food retail
druggists. In Malaysia, a majority of food retailer outlets offer food and non-
food items, with at least a 70:30 distribution. The traditional food distribution
vegetables, meat and fish, together with small 'mom and pop' food stores
which distribute dry goods. However, the rapid growth of the economy,
particularly during the decade before the financial crisis began, has led to
breakneck pace to service the growing middle class with their demand for more
sophisticated food stores and a greater variety of products many of which were
imported.
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and forecast 2010 to 2015). The profile also contains descriptions of the
pressures within the market. Essential resource for top-line data and analysis
covering the Global retailing market. Includes market size and segmentation
data, textual and graphical analysis of market growth trends, leading companies
Highlights29
The global retailing industry group is defined here as the sum of six
The food and grocery segment was the industries most lucrative in 2010,
of 2015.
29
Global Retailing, Marketline (September 13, 2011), Pub ID: MTLN6554975
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The retail industry had contributed to the economic growth of many countries
and was undoubtedly one of the fastest changing and dynamic industries in the
world today. With total sales of more than US$ 9 trillion, retailing was the
engineering (US$ 3.2 trillion). Some of the worlds largest companies were in
this sector: over 50 Fortune 500 companies and around 25 of the Asian top 200
firms were retailers. Even as the developing countries were making rapid
developed countries with the USA, EU & Japan constituting 80% of world.
Retail was a significant contributor to the overall economic activity the world
over: the total Retail share in the World GDP was 27% while in the USA it
accounted for 22% of the GDP. The share of organized Retail in the developing
dominate in their home markets. Wal-Mart, the worlds leading retailer in U.S.,
it delivered solid financial performance for fiscal year 2011. Its net sales are
increased by 3.4 percent to $419 billion from $ 405,312 in 2010 and operating
income by 6.4 percent to more than $25 billion. Similarly, Tesco net sales are
The main value propositions that most large retailers use were a combination of
pressures and heated merger activity fuelled the churn in the ranking of the
nation's top retailers in 1999. The Triversity Top 100 Retailers, published in the
nearly $3 trillion. The emergence of the global marketplace and the rise of the
24/7 economy had further fuelled the growth of retail across the world. The
Standard (GICS), grew by 5.5% in 2004 to touch $ 9,498.5 billion. The global
Table 2.1The total sales of global Retail Industry from 2000 -2009
As many as 10% of the worlds billionaires were retailers, the United States of
America dominated the world retail market space and accounted for 32.3% of
the global retailing group. Europe generated a further 30.8% of the groups
value, Asia Pacific 25.6% and the rest the world-27.4%. By the year 2009,
27.4% since 2004. The total world retail sales break-up by sector wise, revealed
that non-grocery retailing occupied prime place in total retail sales from 2005-
2009 and continuously held its sway so far. There is a significant development
of direct retail sales growth (Shown in Figure 2.1) from 1998 to 2009.
Figure 2.1 The Global Direct Retail Sales from 1998 -2009 (US $ Billion)
experienced explosive growth over the past 10 years. As the population in these
sales per capital increased almost 100 percent, and internet access grew more
retail sales, a 7 percent rise since 2001as shown in Table 2.2. As mature
been plenty of costly stumbles along the way. Looks at the up and down of the
past decade, the countries and companies that have stood out in an era of
Retail Space
40 million 130 million +25 %
(Square meters)
Population with
200 million 1.2 billion +496 %
internet access
Percentage of
34.9% 42 % + 7. 1 %
global retail sales
During the past 10 years, different markets opened at different times, offering a
variety of growth opportunities for retailers (shown in table 2.3). In the early
acceptance into the World Trade Organization (WTO) in 2001 marked the
opening of the market to trade and investment. Next came Southeast Asia, then
the rise of the BRIC nations (Brazil, Russia, India and China), and finally the
emergence of the Middle East and South America. While Africa has not made
its entrance onto the world retail scene yet, we believe its time will also come.
Global Retail Development Indexs (GRDI) top 10: China, India, Russia,
Vietnam and Chile. The growth trajectory of the retail market in these countries
growth in retail spending per capita and retail space. Although each country is
and will continue to draw the interest of leading retailers for years to come.
YEAR EXPANSIONS
2001 Metro enters Croatia & Home Depot enters Mexico
2002 Metro enters Vietnam
2003 Tesco enters Turkey
2004 Tesco enters China; Lidl enters Hungary & Zara enters Romania
2005 IKEA enters Turkey
2006 Carrefour enters Algeria & Media Market enters Russia
2007 Carrefour enters Kuwait
2009 Metro enters Kazakhstan; & Wal-Mart enters Chile
2010 Zara Enters India; IKEA enters Dominican Republic & Louis
Vuitton enters Lebanon
Source: News reports; A.T. Kearney Global Retail Development Index, 10-
year Retrospective, 2011
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Chile is increased phenomenally. While the retail spending has been increased
9 percent average rest of index, the modern grocery sales have been increased
(CAGR 2001 2010 per capita) (CAGR 2001 2010 area per capita)
China
Chinas size has attracted international retailers for years, but the key to
success has been in estimating the markets true value particularly the growing
too late, when they did not get their assortment, pricing or service models right.
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cities. While China slops to 6th place in the 2011 GRDI, it remains attractive to
retailers that cannot afford to ignore Chinas as part of their international growth
strategies
India
Indias sheer market size and the purchasing power of its growing middle class
have contributed to its growing middle class have contributed to its prominence
many retailers from entering, while others were forced into the unfamiliar
stance of entering the country with a partner. Despite the hurdles, postponing
entry into India is not an option, given the crunch for desirable real estate.
Foreign retailers that can successfully forge local partnerships and establish a
According to Ireena Vittal, McKinsey said that she is clearly seeing five
trends in the Indian economy: (i) Shoppers are getting richer faster. India has
one of the youngest population in the world which has a high acceptance of
new brands. (ii) Many more Indians are emerging within the country
geographically and digitally. The top eight cities of India are countries in their
own right in terms of population and purchasing power. At least ten states have
developed a very large consumer base, with each going at differentiated rates.
Additionally, the online consumer base in India is going to expand four times
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to 350 million by 2015, leading to huge opportunities for retailers. There is also
a huge base of mobile users who have already started buying through their
phones. (iii) Habits and aspirations of consumers are changing driven by supply
cycles of product upgrades. For example, the typical Indian customer changes
his mobile every eight months. (iv) volatility in cost and growth is here to stay,
especially in terms of food, cotton and power prices; and (v) the Indian industry
Russia
its large and wealthy population has long been an attractive proposition for
well for the possibilities of entering Russia via acquisition, yet so far this has
rising in tier 2 and 3 cities, putting more pressure on foreign retailers hoping to
Vietnam
All eyes were on Vietnam as it opened its borders to wholly own foreign trade
in 2009. While some retailers, particularly from Japan and Korea made
successful entries into large cities, the country has been slow in developing
foreign retailers. Still, with improved growth forecasts in both GDP and
Chile
Chile lifted foreign direct investment restriction in 2001 and has been a target
market for international retailers ever since. A fast growing retail market and
Chile also has one of the most politically stable, pro-business governments in
local retailers, Chile remains one of the most important markets for foreign
growth over the past 10 years. As the population in these countries increased by
11 percent, retail space expanded by 225 percent, retail sales per capita
increased almost 100 percent, and Internet access grew more than 400 percent.
Developing countries now represent 42 percent of global retail sales. Our 10-
Year Retrospective explores how global retail has grown and changed over the
past decade. The ranks of different countries and the change from 2010 to 2011
Table 2.4 Ranks of Retail Developing nations and change in ranks from
2010 - 2011
priority.
Carrefour pioneered the globalization of hypermarkets and now has more than
15,660 stores in 34 countries, including more than 7,500 outside its home
Between 2005 and 2009, it added eight new countries and exited nine.
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Note: Carrefour withdrew from Slovakia I 2005; its remaining stores were
converted to franchises in 2007, Source: Carrefour website and annual and
financial reports, 2000 -2009
2.4). Metros early entry into developing markets continues to bolster the
Figure 2.4 Foreign Markets and Metro Groups Sales (61 Percent)
Source: Metro Group website and annual & financial report 2000 -09
The second most profitable retailer in the world has widespread international
reach in 14 countries, particularly in Asia and Europe. U.K based Tescos
international revenue has grown 27 percent annually in the past decade (shown
in figure 2.5), and it has expanded to the United States and India is the past two
years.
Source: Tesco website and annual & financial report 2000 -09
The worlds largest retailer has already conquered the largest retail market (its
home market of the United States), but is continues to capitalize on the rapid
generates more than a quarter of its sale from 14 international markets (shown
Source: Wal-Mart website and annual & financial report 2000 -09
Non Store Retailing With the passage of time, the world is shrinking through
world is now a vital aspect for every individual. People around the world are
broadening their modes of communication which now include the internet, and
the advent of globalization and the expansion of world markets, the global
market place has rather contracted and there are connections between all parts
of the world. This progress into technology and modernization has given a
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great boost to companies selling products such as mobile phones and other
developing countries. The following tables 2.5& 2.6 represents the changes in
category; it was improved from 72.89 percent in 2004 to 78.18 percent in 2009.
At the same time the direct selling is reduced by 5.31 percent from 22.70 in
2004 to 17.39 in 2009. But the vending sales are mostly consistent in this
Internet retailing is a major channel for companies to consider when they are
based retailing and non-store retailing is captured by the fact that total internet
retailing. Internet retailing still has a very long way to go before it challenges
apparel and electronics and appliance brands could generate some quantifiable
sales through internet retailing, sales of these products will still depend on
bricks-and-mortar stores for driving their sales in India, due to the low level of
countries from 2004 2009 depicts that U.S.A. non-store retailing sales are US
Grocery retailing industry in Asia is probably the most dynamic and diverse in
the world. While there are elements of commonality, each of the ten countries
profiled in our study displays distinct characteristics. Overall, the region has
fared well through various challenges in recent years, including the 1997 Asian
economic crisis, the SARS epidemic in 2003, political upheavals and, more
recently, the threat of an avian influenza epidemic. China and India remain two
of the regions (and indeed the worlds) major growth engines, with their
second and third largest grocery retail markets in Asia after Japan, there are
still scope for further development and expansion. Although their economic
and consumer indicators are the fastest growing, they do have among the
lowest per capita gross domestic product (GDP) and personal disposable
income (PDI) statistics in the region. Countries across the region are seeing
inexorable rise of modern retailers in this region. Modern format operators are
Consumers are increasingly demanding, requiring not only quality and value
for money, but also a wide range of products, convenience and comfort.
Although still price sensitive, they have embraced Western brands with gusto.
These factors have led to the popularity of the hypermarket format in Asia, and
since the 1990s, and ranks among the top five players in half of the countries in
this study. Tesco and Wal-mart, who followed soon after Carrefour, have made
existing and new locations. Asian regional retailers have also made their mark.
Hong Kongs dairy farm and Japans Aeon hold significant positions outside
their home markets, and are two of the largest retailers in the region. Dairy
Farm is the leading grocery retailer in Singapore and Malaysia, operating under
countries mean that traditional format grocery channels still maintain a big
share of the market, dominating the rural or suburban areas. With the exception
command more than half of the grocery retail market in our surveyed countries.
In most Asian countries, the grocery retail market is far from saturated. There
areas and second tier cities. Fresh opportunities exist in niche areas, such as
health foods, private label products and luxury products, which only have a
the latest alternative channel, but this has yet to make much headway in Asia.
Overall internet penetration is low compared to Europe and the US, although
Japan and South Korea are leading the way in this area. However, the
some cases to attune to local cultures and tastes. Domestic retailers are not
about to give up their market share easily, and they have the advantage of local
bureaucratic red tape. The encouraging market outlook will invite further
retail infrastructures. The months ahead will undoubtedly bring fresh and
Australia
As one of the more mature markets in our study, Australian grocery retailing is
and Coles Myer. Between them, these two giants command some 61 percent of
the market. This sector is also comprised of other national and minor chains,
in this market has been steady at around six percent annually. With intense
competition in this market, the ability to raise prices is very limited, leaving
population growth is low at just over one percent per annum1, and so, to
increase their share of the retail market. The buoyant Australian economy, with
its low interest rates, low unemployment and rising property prices, has
general. Supermarkets are under pressure. They vie for consumer dollars in the
and cafs, which benefit from the cash-rich time-poor nature of both urban and
suburban dwellers.
larger cities like Sydney and Melbourne. This has led to streamlining of
supermarket outlets, with the closing of unprofitable stores, and there has been
an average four percent decrease in stores annually since 1999. In the pursuit of
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the last decade. Non-food items, such as health and beauty products, electrical
goods and toys, complement traditional grocery shelf space. The large chains
have had a successful entry into the petrol retailing market with co-branded
in collaboration with the major oil companies such as Caltex and Shell. The
latest in new offerings banking and financial services, including credit cards
and insurance aim to leverage their massive consumer base. The figure 2.7
reveals the significant growth of Australian grocery retail revenue U.S. $54.7
Its a familiar story in China these days traditional Chinese practices are
slowly but surely giving way to the modern Western invasion. But with such an
over the coming years to a rate of eight percent, to reach a market size of
US$456 billion by 2010 as shown in figure 2.8 This has largely been fuelled by
rising disposable income per capita, which has been growing at over 12 percent
annually, and is expected to continue at this rate over the next five years.
migrating to the cities in the quest for work, as the government looks to
statistics are telling: while traditional-style markets are still the leading channel
for grocery retail, cornering a 68 percent share by sales, they account for 99
percent of the number of grocery retail outlets in China. Clearly, the value of
sales in traditional wet markets and provision goods shops has reduced
gained ground and will continue to do so. In recent years, local and foreign
needs. Chinese consumers are very price sensitive, and low prices have been
the easiest way for retailers to gain market share. There is an increasingly
affluent and sophisticated population who value convenience and comfort over
price, but they are still very much the minority. In the meantime, retailers will
continue to focus on price. In the longer term, retailers will need to build brand
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loyalty in order to maintain margins, and some already offer loyalty discounts
and private label products. Competition has been fierce as domestic and
investors in late 2003. Foreign players are able to build on their experience in
supply chain, logistics and inventory management, although they may lack
turnover are some of the issues to be overcome in the fight for market share.
Despite positive economic indicators, the Indonesian retail market has faced
significant challenges in recent years. Since the Asian economic crisis in 1997,
GDP and other consumer indices have grown steadily. Interest rates have been
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stable and improved access to consumer credit and financial products have
supported the retail market. On the downside, the retail industry has had a
couple of difficult years following natural and other disasters the Bali
bombings, SARS, the Asian tsunami that have dented consumer confidence.
Current issues include the bird flu outbreak, a weaker rupiah, fuel shortages
and rising fuel prices, in addition to the ever-present political ups and downs.
independent grocers9. While their numbers are shrinking, they still comprise 99
percent of total grocery retail outlets10. In rural areas, traditional retailers will
modern retail outlets grew nearly four-fold between 2002 and 2003, albeit from
a very small base. The added complexity in this market is the immense
between the levels of wealth among consumers. Modern retailers are mostly
concentrated within the island of Java which, despite representing only seven
percent of its land mass, houses around 60 percent of Indonesias 225 million
population.
the larger cities. Demand for processed foods and dairy products is still low but
work longer hours and seek greater convenience. As a result, the average
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three percent in 2004; in the same period, average prices of goods from
Indonesia is a minefield of red tape, and all new store openings are subject to a
Japan
grocery retail market is becoming matured the worlds second largest after
the US15. In fact, Japan's grocery sale per capita is the highest in the world, at
over US$3,300 a year. The impressive statistics mask a troubled retail market.
In 2008 the grocery retail market slipped by 1.2 percent due to a combination
of economic and demographic factors. The Japanese economy has been in the
doldrums since the bubble burst in the early 1990s, followed by consumer price
deflation in subsequent years. Population growth has been flat in recent years,
providing little opportunity for volume growth in the retail market. Consumer
confidence has never fully recovered since the economic downturn. Although
demand for staple food and household items has remained flat, consumers have
Having said that, Japanese consumers are still very brand conscious and
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penetration of private label products is low. The market has also suffered from
patterns have changed along with the demographic shift and lifestyle
percent18 of Japanese are over 60, with another 15 percent19 set to reach 60 in
the next decade demand for health products and fortified foods is growing.
Healthy options such as reduced salt and sugar, and low fat alternatives are
extremely popular even though they are more expensive than standard
where there are more work options, the upshot being increased demand for
Malaysia
Q311 BMI Malaysia Retail Report forecasts that total retail sales will grow
tourism industry are key factors behind the forecast growth. Large domestic
and multinational retailers have entered the fray with relative success, boosted
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prevented their spread into major cities. The Malaysian government is keen to
see greater development across the board, and has set ambitious targets,
valuable experience in this area. The food versus non-food retail sales in
Malaysia has been significant during 2003- 2008 as shown in Figure 2.9
Singapore
market with modern retailers taking the lions share, with limited growth
Asia, the city-state presents a small but mature retail environment. With the
population expected to increase from 4.2 million to just 4.4 million by 2009,
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overall volume growth will be low. Yet, the growing affluence of Singaporeans
six percent annually. Rising incomes and busier lifestyles have also influenced
(BMI) Singapore retail report forecasts that total retail sales will grow from a
2015. A low unemployment rate, rising disposable income and a strong tourism
industry are key factors behind the forecast growth, rises in property prices,
along with a relatively stable economic outlook, have made Singaporeans feel
South Korea
While retail market is valued at over 60.93billion in 2010, the South Korean
grocery retail market has become one of the largest in Asia, and represents 30
percent of the overall retail market41. Seoul is the center of a large and
achieve rates of four to five percent annually, in line with GDP and average
wage growth rates. A two percent growth rate is probably a more realistic
stable, and a greater proportion of incomes will shift towards leisure, luxury
goods and services. One of the grocery segments to benefit from the increase in
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PDI is luxury and health foods. Over the last two decades there has been a
Thailand
Its a battle between old and new in Thailands thriving retail market. For now,
the traditional sector is holding its own but for how long? Thailands grocery
retail market is the second-fastest growing in Asia Pacific, after China. With a
population of 65 million set to grow at one percent annually, and GDP growth
Thailand, having recovered steadily since the 1997 Asian economic crisis. In
contribution to gross domestic product (GDP) at 12 percent and also the second
million retail outlets in the country, only about 4 percent of them are larger
30
Indian Business Directory Business Maps of India 2011
57
than 500 sq. ft. in size.31 India has been one of the highest density of retail
outlets per capital in the world with a widely spread retail network but with the
lowest per-capita retail space @ 2 sq. ft per person. Indian retailing continues
percent in cash and carry retail business. The Indian retail market stood at Rs.
18,10,000 crore with annual growth of about 11 percent for 2009-1032. Of this,
the share of organised retail in 2009-10 was 12.74 percent, estimated at Rs.2,
29,870 crore. But this modern retail segment grew at the rate of 42.4 percent in
2010, and is expected to maintain a faster growth rate over the next three years.
the total retail market (India retail report, 2010). This generic growth is likely
Indian retailing including organised retailing from the year 1999-2010 and
expected retail volume for 2011-2015 also shown In Table 2.3, Table 2.1 And
31
Mohan Guruswamy, Kamal Sharma, J.P Mohanty & Thomas J. Korah (2010),
FDI in Indias retail sector more bad than good?, Centre for Policy Alternatives
Society, New Delhi.
32
The Images F & R Research estimates for India Retail report-2010.
58
Retail franchising has been growing at the rate of 60 percent in the last 3
(fruits, vegetables and meat products) are the most promising category
The retail boom which has so far been concentrated in the metros is
33
KPMG, 2010 an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (KPMG
International),
59
buying offices.
Table 2.8 & Table 2.9 states the market data of Indian retailing category
2015
Market Data
34
Euromonitor International : Country Market Insight, March 2011
60
18,61,012 2,37,092
2011e 12.74 (e)
$ 395.96 billion (e) $ 50.44 billion (e)
36,90,064 5,42,439
2012-15e 14.7 (e)
$785.12billion (e) $115.41 billion (e)
Source: KSA Technopak retail report- 2000, 2001, 2002, 2003, 2004, 2005,
2006 and India retail report-2007 & 2009, and Business Monitor International
(BMI) India retail report of 2010.
61
Food and Grocery is by far the most promising area for the corporate majors to
get into organised retail businesses. The Food and grocery is the second-largest
expenditure (USD 154 billion) and 70 percent of total retail sales (KSA
Technopak Report, 2007). The Indian food market is estimated at over US$
182 billion, and accounts for about two thirds of the total Indian retail market.
According to McKinsey retail report- 2010 , the retail food sector in India is
likely to grow from around US$ 70 billion in 2008 to US$ 150 billion by 2025,
accounting for a large chunk of the world food industry, which would grow to
US$ 400 billion from US$ 175 billion by 2025. Mass grocery retail (MCR)
sales in India are expected to undergo tremendous growth, the MGR outlets
However, the Indian Brad Equity Foundation stated that, Rs 18,673 billion
(US$ 401 billion) Indian retail market entails only 6 percent of itself as
International (BMI) India Retail Report for the fourth-quarter of 2011 forecasts
that the total retail sales will grow from US$ 411.28 billion in 2011 to US$
804.06 billion by 2015. But the growth of organized retailing in India has
changed the business landscape and buyer behaviour. Most of the food and
grocery products reach the consumers through traditional markets which are
62
unorganized (Bajaj et al, 2005). But the very fast changing trends in food and
markets, specialty stores and hyper markets for various conspicuous reasons
beverages account for 60 percent of the consumer spending and sales constitute
70 percent of total retail sales is the 'way to go' for retailers to attract consumers
initially. Out of the Rs.18,10,000 crore total Indian retail market, food &
Rs.10,76,950 crore (59.5 percent), which has grown from 9,67,600 crore in
200, but 98.9 per cent of this market is dominated by the neighbourhood kirana
stores and organised food and grocery retailing accounted for a meagre 1.1
Indias total retail market was worth US$ 395.96 billion and its grocery
and food retail market was calculated at US$ 284 billion and US$ 276 billion
respectively35. This has made India the sixth largest grocery market in the
world and expected to grow to US$ 482 billion in 2020 to occupy fourth
position after US, China and Japan. India is the second largest producer of
35
International Grocery Development (IGD) report - 2010
63
fruits & vegetables (15 percent and 14 percent respectively) after China (34
percent). The sector is defined by the low gross margins, but there is a
accounted for a miniscule three percent of food and grocery retailing value
evident in the fact that the top 50 retailers in India accounted for only 3.5 per
cent of store-based retail value sales in 2010. The constant value compound
grocery retailers. This would arise as result of the shift in consumer demand
36
Seema Seth (2011), Plight of middlemen, The Franchise India -April 2011).
64
mankind. The ensuing discussion gives us some general idea about different
that India is a very divers market, different forms of retailing. Historically, all
type of trading including retailing is being done through barter system in India
as is the case with parts of the world. At one point of time in history, almost
one-third of the world trade was routed though India and it witnessed the
growth of many cities on main trading route. Gradually, these traders settled
across various towns and cities. Trading community in India has its origin in
flourished. The retailers used to visit city markets to replenish their stocks.
Presently kirana stores (traditional retailing) have been the hallmark of Indian
retailing till date. These formats naturally fit into Indian social setting. Apart
from kirana stores, there have been specialty retailers even in the traditional
retail set up such as cloth merchants, jewellery shops, footwear shops, sweet
Before entry of the modern retail store chains in India, an early form of
supermarket had existed in India for the last many decades in the form of
traditional kirana store. These are still popular, especially in small towns.
Economic reforms in 1990 provided the right kind of environment for the
65
Mumbai. Traditional kirana stores and supermarkets are the most visible face
of retailing in India. Apart from these there had been many retail ventures in
India, mainly led by private sector, which over a period of time have become
modern face of Indian retailing. Retail growth is not just confined to metros
like Delhi, Mumbai, Kolkata, Hyderabad, Bangalore, and Chennai, but non
Chandigarh and small cities and towns are catching up very fast. These cities
projected to touch over US$ 20,000 million by 2010-11. With the growth in the
IT / ITes sector and other sunrise sectors like bio-technology, hospitality, etc.
over the past few years, and are expected to demonstrate robust economic
performance in the coming years. Indian market is well diversified and almost
every type of customer is found here just like in other parts of the world.
The southern part of India is undoubtedly the most literate part of the
entire country. It has the highest percentage of literacy and also has the highest
states of South India that most of the biggest global names in the InfoTech
industry have their offices and an extremely large pool of manpower talent
have brought more prosperity to these states. It is also said that the organised
66
retailing in India in-fact originated from the south and has been gradually
spreading to the other parts of the country. Metros like Bangalore, Hyderabad,
and Chennai are growing at an exceptional rate, with the retail buzz in these
The estimated population of South India is 323 million. The largest linguistic
Tuluvas and Kodavas. About 83% of South Indians are Hindus. Islam has the
second highest number of followers in the region, with 11%, while 5% follow
considerably higher than the Indian national average of 60%. Kerala leads the
nation with a literacy rate of 92%. The sex ratio in South India is fairly equable
at 997; Kerala is the only state in India with a favorable sex ratio. The
67.8% of South India has access to tap water, wells and springs are other major
forms of water supply. The south India consists of Andhra Pradesh, Karnataka,
Kerala and Tamil Nadu as well as the union territories of Lakshadweep and
million people in rural South India who, on an average, spent more than $304
per annum, while about 26 million people spend in the range of $181 and $304
per person per annum. In urban South India, about 3 million people spend in
67
the range of $208 - $363, while about 10 million spent in the range of $363 -
$668 per person per annum. Kerala has the highest number of persons
belonging to the $304 and more expenditure category in rural South India. In
urban South India, Tamil Nadu has the highest number of persons in the $668
Consumer Behaviour
There are significant variations across the cities. While the single largest
expense across all southern regions is food, Chennai spends the highest
consumption baskets and eating preferences are observed across the southern
states of India. The largest growth in prosperity has been in the south as the
high income household grown rapidly. About 70 per cent of Indias rich live in
eight states including Karnataka and Tamil Nadu. Among all the middle and
high income classes, except the super rich, growth has been highest in the
southern region. The southern states have also seen the largest decline in
poor/low income households. Per capita income in South India is around $510
Trivandrum, and Madurai contribute a total of US$ 7.000 million worth retail
activity. Organised retail penetration is lower than any of the metros, with
68
traditional retail ruling the market across these geographies. These cities are
less saturated than the metros, but have greater spending power. Middle class
and lower middle class form majority of the households, with more than half
the population falling in this category. The combined retail potential of these
There are already 250 established brands in the South Indian markets
and more are coming in, with the advent of modern retail, high street will be
edged out because their poor pricing and lack of infrastructure. On the other
hand, there will always be locations such as Hyderabad Koti area, Bangalores
Brigade Road and Delhis Connaught Place, which provide a certain kind of
shopping experience that shopping malls cannot match. They will continue to
remain in favour and may sink under the pressure. While several corporate
Hyderabad and Sri Murugan in Chennai are mulling expansion. Same is the
story of other regional brands like Nalli Silk, Kuamran Silk Traders and many
route to enter nearby cities and towns. These retailers keep up their growth
intact when many large corporate retailers are trimming their networks and
69
Fabindia has around 45 outlets; Globus has 5 stores; Koutons has 122 stores;
Shoppers Stop has 8 stores; Marks & Spencer has 3 stores; Pantaloons has 7
stores; Khadim has 38 stores; Lifestyles has 10 stores; Viveks has 7 stores;
Provogue has 18 stores; Vishal Mega has 7 stores; Westside has 12 stores;
Cantabil has 24 stores,; Croma has 11stores; DMart Exclusive has 3 stores;
Next has around 100 stores; Gitanjali Jewels has 3 stores; Odyssey has 31
stores; Quillon Radio Service has 18 stores; Saga Depot Store has 4 outlets,
Spencers has 38 outlets; Chennai Silk has 9 outlets; Witco has 7 outlets; Nalli
Silk has 15 outlets; and Indus Mobile Distribution has 200 (approx) outlets.
of the local brands are doing in South India in their respective states where
Customer focus is the key for retail success. There are various key elements
that differentiate South India from rest of the country and present retailers with
potential for retailers in South India. The diversity in language, ethnic and
induce the retailers to adopt distinctive retail strategies at different parts of the
South. It has always been at the forefront of the retail revolution with several
firsts-examples include the largest toy store, Kemp Fort; the largest film city,
70
Ramoji Film City; and even the first mall of the country, Spencers Plaza in
Chennai. The way forward for the retail sector in India should be a growth
India, by virtue of its high literacy levels, brand loyalty, and quality
management and technology has an important role to play in the growth of the
retail segment. Therefore, this is one retail function where the South, by virtue
industry. South India has long been acknowledged as a pioneering base for
organised retail in India. However, it is now time to move up the chain, with
more advanced retailing practices that will integrate it with some of the worlds
best practices in store operations, management and vendor sourcing. The shop
can emerge as a nodal point for such information and business opportunities to
The organised retail sector, with CAGR of 20 -30 per cent, is all set to
witness the maximum number of large format malls and branded retail stores in
South India, which will be followed by North, West and the East. Retail space
is cheaper in South India. Table 2.4 detail the south Indian mall supply
The maximum supply cumulative for the next three years in the southern
zone is expected from Bangalore and Hyderabad (about 5.3 million sq ft),
per cent supply share in 2009 and 31 per cent in 2011, Cushman & Wakefield
Research estimates the highest share in 2009 is 38 per cent. This zone accounts
for slightly more towns and cities will be able to sustain additional mall space
in the coming years. In comparison to other zones, since markets like New
Delhi and Mumbai have nearly exhausted their sustainable mall space
potential, the major southern trio, Bangalore, Chennai and Hyderabad, still
Southern peninsula of India and has a coast line of 974 km. The state has 23
the other key cities in the state. Andhra Pradesh has three major rivers, viz., the
Godavari, the Krishna and the Thungabhadra. There are seven agro-climatic
crops. The most commonly spoken language of the state is Telugu. Hindi,
English and Tamil are the other languages used. The state has well-developed
social, physical and industrial infrastructure and virtual connectivity, has good
power, airport, IT and port infrastructure. The GSDP of the state is growing at
compound annual growth rate of 12 per cent annually. Vast natural gas reserves
The Retail sector is growing at a tremendous pace with almost all the
retail brands in the market having their presence in Hyderabad. In fact, the
demand has far outgrown the supply. However, the market continues to be in a
will play a critical role and the CBD and Peripheral areas will also experience a
change in 2010. The retail activity and establishments will become more
pronounced in the new residential and office locations of the city like
73
potential for high quality shopping malls. Liberalisation of FDI norms will
create opportunities for overseas investors, mall developers, and operators. This
will also increase the investment opportunities for domestic investors such as
traditional kirana stores and supermarkets. Table2.12 and Table 2.13 symbolize
the Andhra Pradesh economy in figures and investments, FDI in the state.
Andhra
Parameters
Pradesh
Capital Hyderabad
Geographical area (sq km) 275,100
Administrative districts (No) 23
Population density (persons per sq km) 277
Total population (million) 76.2
Male population (million) 38.5
Female population (million) 37.7
Decadal population growth rate (%) 14.6
Sex ratio (females per 1,000 males) 978
Literacy rate (%) 60.5
Male (%) 70.3
Female (%) 50.4
Average life expectancy (years) 63.9
HYDERABAD
multiplex operators. While some of the large retail players like Lifestyle and
Shoppers Stop and mall projects like Hyderabad Central are located on
Begumpet-Punjagutta strip, other prominent mall projects like GVK One and
City Centre Mall are located on Banjara Hills Road No 1. Lumbini Mall on
Banjara Hills Road No. 3 and Inorbit Mall at Madhapur form a part of the retail
Mall
From the study conducted on the various rental structures of the tenants, it was
apparent that the anchor tenants rentals remain more or less the same across
different floors. The average range for anchor tenants is in the range of Rs 38-
52/sq ft per month. The vanilla tenants rentals on the ground floor vary from
Rs 70-100/sq ft per month in the Old CBD areas, whereas the CBD/Off CBD
range between Rs 70-130/sq ft per month. The sub urban and the peripheral
zone range from Rs 100-250/sq ft per month. There is a difference of 20-25 per
cent for the first three floors and beyond that there is no major difference in the
rental values. This scenario remains the same in all operational malls except in
GVK One where the rental ranges are more or less the same across all floors.
The rental for a revenue share model with minimum guarantee varies between
Rs 28-40/sq ft per month with a revenue share of 5-15 per cent; whereas rentals
for tenants, who are not on the revenue share model, range from Rs 150-300/sq
76
ft per month. The rentals for vanilla tenants in 2007 were purely on a Leave
and Licence agreement. But post 2008, with the economic slump there has been
a shift in the trend and an increasing number of tenants are going for a
in the recently launched large format malls like GVK One and Inorbit.
At present the suburban zone has five operational malls with anchor
tenants like Shoppers Stop, Inox, Globus, Max, Crosswords and X-cite. The
hand, the peripheral zone has the presence of only Inorbit Mall as retail stock.
The main anchors are Hypercity, Shoppers Stop, Lifestyle and Cinemax. The
During the course of our study, a number of facts came to light regarding the
tenants profiles in a mall as well as in a high street. The findings have been
Mall
Malls in Hyderabad have a healthy occupancy rate of over 90 per cent in most
malls, accounting for 37 per cent of the total anchor tenant occupying built-up
area in the malls studied. The hypermarkets are followed by Apparels &
Accessories absorbing around 30 per cent of the total existing mall space
occupied by anchor tenants. Multiplexes are the third largest occupiers, to the
77
tune of around 29 per cent of the mall space stock occupied by anchor tenants,
anchor tenant area is accounted for by F&B, Electronics & White goods and
other stores. Similar to anchor tenants, there was a profiling of vanilla tenants
too. Not surprisingly, Apparel & Footwear occupy the largest quantum of
mall space, accounting for about 64% of the total retail stock of vanilla tenants.
It is then followed by Food & Beverage with a share of 21 per cent of the
space occupied by vanilla tenants in malls. Watches & Jewellery with 6 per
cent share, Home & Lifestyle with 5 per cent, Books, Gifts & Music with 3
per cent form the rest of the total retail vanilla stock.
High street
CBD and Jubilee Hills Road No.36, located in the suburban micro-markets of
the city. Some of the prominent stores in Himayatnagar include World of Titan,
Reebok, Adidas, Levis, Spykar, KFC and Puma; while brands like Croma,
Pantaloons, CCD, Stephen Brothers, Chutneys and Pepe are present in Jubilee
Hills Road No. 36. As with the malls, here also the Apparel & Footwear
category has the highest number of stores, which is close to 50 per cent of the
Watches & Jewellery with 20 per cent and F & B with 11 per cent of the
total stock. Books, Gifts & Music with 8 per cent and electronics & white
goods bring up the rest with minimal presence in these high streets.
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
launched country's first hypermarket Big Bazaar. It has the following retail
segments:
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.
79
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
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 ` 8000-
sections; they are individually handled retail outlets and have a personal
touch.
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
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.
snacks and other small items can be bought via vending machine.
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
formats is concerned (Sinha and Kar, 2007). Many researchers and retail
they discuss retail formats. But, there is a unique scenario prevailed in India as
evolution happening with more and more formats being defined by the day, not
only by the market place but by the method of retail mediation with customers,
convenience etc. At the same time these newly defined formats co-exist with
the primitive ones. In fact, it is the retail format that creates a unique identity
insights into the local buying behaviour before shaping the format choice.
Considering the diversity in terms of taste and preferences existing in India, the
of retailing concepts to fit into the consumer mind space. There are retail
82
formats that sell multiple products under one roof, there are formats that sell a
definite set of products, and there are formats that specialises in just one niche
product category; also, there are formats that can attain optimum business from
just 10-20 sq.ft of retail space and there are formats that need a minimum of
one lakh square feet to be able to operate efficiently (India retail report, 2009).
category.
The Indian food and grocery retailing can be divided into fresh
well as dry unprocessed groceries. The food & grocery sector is characterized
by a large number of traditional formats like the independent grocers, the pan
shops, bazaars, government fair price shops and co-operatives like Kendriya
However, the growth rate of modern retail format sales has been significant for
the last seven years because new wave of consumerism and higher standards of
hygiene and attractive ambience. The market is thus getting organized from
experience offerings, etc in order to meet the specific needs of their target
customers. The value propositions of different food and grocery formats are
shown in Table 2.16, Table 2.17 indicate sales in store based retailing by
83
category (both grocery & non grocery merchandize) value and Table 2.18
Table 2.16 Value Proposition of Determinant Attributes of Food and Grocery Formats
Kirana Accessibility, Grains, Pulses, other OTC(Over The MRP Dull Credit + easy
Store Groceries, personal, Counter)+ Home return
Convenient products, medium (4-5 delivery+ purchase
opening hours, brands per product personalized policy
convenient category), Low number of services+ friendly
location, SKUs relations+ personal
walking distance. contacts
Super Accessibility, Grains, Pulses, other Self-service + Fast Everyday low Bright and clean + Parking
market groceries, personal & check-out lines and pricing + special high atmospherics facilities +
convenient opening Packed products, some prompt service + sale promotions + + store design and credit card
hours, other household items, Friendliness of sales Redemption of layout + display of facilities +
one stop shopping, Medium number (4-5 personnel + product food vouchers + merchandise stress free
Need to travel brands per product knowledge of sales Discount + Offers shopping
more than 10-15 category), Medium personnel + offering
minutes number of SKUs, Quality customer loyalty
National an store brands, programs + home
value for merchandise delivery based on
bill value
Source: Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews,
trade sources
85
Table 2.17 Sales in Store-Based Retailing by Category Value from 2005-2010 (Rs bn)
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
Table 2.18 Sales in Store-Based Retailing by Category: % Value Growth from 2005-2010 (% current value growth)
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
86
Accounting for over 68% of all forms of retail outlet, independent grocers, or
mortar or traditional formats in the country, was the most common format of
retailing in India. Grocery retailers saw faster growth than non-grocery retailers
after the financial crisis in 2008. This led the value share of grocery retailers to
increase to 68%, which was the same as the share in 2005. In 2010, inflation
was the main driver of value sales in grocery retailers, as it was stubbornly
high, which drove up the prices of essentials such as dairy products, pulses and
vegetables. The traditional trade will remain an important retail channel in most
developing markets, although they will lose share at a rate of about 1% per
year, While India will have a lot of focus from a regional perspective with
investment being ramped up again over the next few years. Grocery retailers
saw faster growth than non-grocery retailers after the financial crisis in 2008.
This led the value share of grocery retailers to increase to 68%, which was the
same as the share in 2005. In 2010, inflation was the main driver of value sales
and independent small grocers, which account for the bulk of the retail
landscape in India.
87
and number of modern retail outlets during the review period. The independent
grocers registered a sales value of Rs. 6, 26,443 crore in 2010 from Rs. 5,
51,446 crore in 2009 with a growth of 13.6 percent in 2009 -2010.37 The
2007 from Rs 2,90,200 crore in 2001 with CAGR of 7.8 percent in 2001-2008
retail outlets also had seen a huge growth rate of 2.8 percent in 2006/2007 with
outlets increased to 9,490 million in 2010 from 7, 56,700 million in 2001. The
Table 2.19 presented the total sales, and retail outlets of independent grocers
from 2001-2010.
Table 2.19 Independent Grocers: Value Sales, outlets and Selling Space
from 2001- 2007 (at current prices)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Sales
value in
2,90,200 3,16,320 3,41,630 3,65,540 3,87,470 4,08,780 4,27,813 4,77,840 5,51,446 6,26,443
Rs
crore
Total
outlets
7.567 7.832 8.066 8.292 8.500 8.696 8.871 9,046 9,282 9,490
in
millions
37
Euromonitor International : Country Market Insight- March 2011
Over the last few years Indian retail has witnessed rapid transformation in
many areas of the business by setting scalable and profitable retail models
across categories. Indian consumers are rapidly evolving and accepting modern
visible, in our country this is lacking (Sinha and Kar, 2007, p. 11). These are
large, low cost, low margin, high volume, self service operations designed to
meet the needs for food, groceries, & other non-food items. The supermarkets
offer relatively less assortments but focus on specific product categories. They
do not play the game on price rather use convenience and affordability as their
salient features. These were the formats at the forefront of the grocery
revolution, and today, it controls more than 30 percent of the grocery market in
many countries. These are located in or near residential high streets. These
stores today contribute to 30 percent of all food & grocery organized retail
5,000 sq ft. with more than 30,000 SKUs and having a strong focus on food &
changes in the psyche of the Indian consumers. The Indian consumers now
hygienic ambience, and better product display along with the availability of a
89
wide variety of brands helped a lot in drawing consumers towards the format.
In India Food World, Food Bazaar, Nilgiris, and Adani are the leading
total retail sales of Rs 69,330.1 million from Rs. 10,100.0 million with 784
Table 2.20 Supermarket retail stores: Sales value, outlets and selling space
from 2001-2008 (at current prices)
2001 2002 2003 2004 2005 2006 2007 2008
39 Ibid.33