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Development of Retail Formats

in India and Challenges ahead
Presented b y
Hari Ram Pal,
College of Agribusiness Management,
G.B Pant University of Agri. & Technology

Recent Trends

Retail Sales in India
 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.



2005 . August 9.Consumer Trends Source: The Great Indian Market. Results from the NCAER’s Market Information Survey of Households.

Results from the NCAER’s Market Information Survey of Households.Source: The Great Indian Market. August 9. 2005 .

is still in its nascent stages in India Over 12 8 Million Outlets i n India #1 Global Retail industry is of size Unorgan ize USD 8 Trillion Organiz d Retail Fortune #1 ed “Wal-Mart” Retail < 3% is a Retailer 50 Set to gr Over 50 of ow to 8- 2010 10% by the Fortune 25 500 companies Organize are retailers d Retail 25 of the Asian be aroun expected d Rs. are 5 b) by 2 010 retailers Source: CII Mckinsey.000 companies.110 to Top 200 Cr(USD 2 . Retail the largest private industry globally. HSBC .

5 77 73 69 57 5500 Towns +6 lakh Villages Total 100.4 4.4 11.2 2 3 3 4 27 cities Large Cities 2.5-1 mn) 32 Cities Rest of 87.5 (Pop: 0.7 7. CSSO .0 2004 2010 2015 2025 Source: NCEAR. Organized Retail Market in India Population in Crores Proportion of the Total Retail 2008 -2025 (EST) Market (in %) Metros of Mini Metros 6.7 13 15 13 25 20 & Cities 6 6 7 10 Top Cities (Pop: > 1mn) 3.2 140.

31 .7 % Korea 18 % UK 11 % Malaysia 7% Source: FDI in Retail Sector in India. Arpita Mukherjee. Share of Retail Industry in Total Employment Country Share of Retail in Total Employment India 6-7 % China 6% Poland 12 % Brazil 15 % USA 11. Nitisha Patel. ICRIER Publication Pg.

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 – .Major Retailers India’s 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.


No parking facility Focused Merchandised Category Example: M. G. Area is less than 2000 square feet.Store Format By Location 1. Road in Bangalore . High Street Format It is Located in busy shopping area.

2. Destination Format Huge Parking space Wide merchandise category They are Independent retail store with alluring proposition for the customer to visit the store with the primary intention of shopping there .

In & Out petrol pump outlets.3. ready to eat These store carry a limited stock of daily use goods with a special focus on food products eg. grocery type items & confectionary Merchandise include: beverages. . Convenience Store Located in the catchment area of target customers Extended hours of operation Less than 5000 square feet 24X7 convenience stores situated close to homes to generate high footprints snacks.

Store format by ownership Franchise Format Independent Store Format .

Store format by Merchandise Category Speciality store Specializing in a given type of merchandise. . Wedding Souk. Consumers have to make a special visit to pick up the goods. eg. Gold. They are usually situated some distance from the city centre. Consortium of retailers that carry a certain category of products.

Shopper’s Stop.Department store: Large retail store offering a variety of services and merchandise. . Occupy prominent positions in the heart of town or as anchor stores in out-of-town malls eg. organised in separate departments.

. Often part of a chain that owns or controls other supermarkets in the same or other towns. medicine and household products. thus going for economies of scale.• Supermarket: A store that sells a wide variety of goods including food. The chains are often supplied from the distribution centres of a larger business eg. FoodWorld.

Hyderabad •Size: 2000 Sq feet and above • Category killers: •Large format stores that specialise in a narrow line of merchandise eg. hypermart caters to all routine weekly shopping needs in one trip eg. Vijay Sales. When planned. Giant. Big Bazaar. A gigantic retail facility that carries a big range of products under one roof. Various other Retail Formats • Hypermarket (from the French term hypermarche) : •A store that combines a supermarket and a department store. Vivek. constructed and executed correctly. •They use their buying power to negotiate low prices . including fresh groceries and apparel. Mega Mart.

services. and restaurants. Pantaloon’s Central Mall.  Lifestyle centres: Shopping centres or malls whose array of retail outlets are designed to appeal to a particular segment of the population. with hundreds of popular brands sharing space with each other. Typically. One enormous shop. Discounters Internet Retailing . Huma Mall. Eg. Eg. lifestyle centres feature upscale specialty stores. Outlet mall: Shopping centre with national brand-name retailers selling discounted merchandise. Centrestage Mall. Eg.Seamless malls: Consortium of retailers without walls separating the individual stores.

usually in square feet. Irregulars: Saleable merchandise with minor imperfections sold at discount.  Draw tenant: A store that attracts a large number of potential customers to a shopping centre. . seating area. Gross leaseable area (GLA): Total floor space available for retail sales. An anchor is among the first clients to enter a mall. Big Bazaar in Sahara Mall Gurgaon. Eg. often an anchor store. Anchor clients: The most important elements in a large format mall. and occupies at least 25-30% floor space.  Food court: Separate area of a shopping centre containing fast-food outlets and a common.

 plastice ware. Hardware.  Floor Space: 4000 Sq.Dollar store:  US based My Dollar Store started operation in Mumbai through franchise arrangement with Sankalp Retail Value. Feet  Merchandise: Cleaning. . Kitchen ware & confectionary etc. Health & Beauty.

Challenges Ahead Infrastructure Technology Supply Chain Human Resource Foreign Direct Investment .

Thanks .