You are on page 1of 64


A Study on consumer preference
towards organized retailing jn

Master of Business Administration

Second Year



MR. Anubhav Saxena

Pradeep kumar-1301470025

We, Pradeep kumar hereby declare that the
report for comprehensive project entitled A Study
on consumer preference towards organized
retailing in Bareilly is a result of our own work
and our indebtedness to other work publications,
references have been duly acknowledged.

Place : - Bareilly
Date :-

Pradeep kumar
Roll no.-(1301470025)

Certified that this comprehensive project





towards organized retailing in Bareillyis the

bonafide work Pradeep kumar and who carried out
the research under my supervision,

I also certify

further, that to the best of my knowledge the work

reported herein does not form part of any other
project report or dissertation on the basis of which a
degree or award was conferred on an earlier occasion
on this or any other candidate.
Internal Guide:
Mr. Anubhav Saxena
Asst. Prof., SRMS CET Bareilly
Pradeep kumar
(Roll no.-1391470025)

Shri Ram murti smarak college of

EngineeringTechnology Bareilly
(Management Department)


Only due to the blessings of GOD and OUR PARENTS, we have been
successful to handle this project. It is a pleasure to recognize the many
individuals who helped us in all phases of the project. Without their help, we
would not have finished this project, or even started it. Achievement of a goal
is not a one persons job. It is obtained by guidance & co-operation of others.
Our sincere thanks to MR.Anant Shri vastava, HOD-MBA for his moral
support and constant encouragement without which it was not possible for us
to complete the project work successfully.
We take this opportunity to express our sincere gratitude to all thefaculty
members of Department of Management Shri Ram Murti Smarak College of
Engineering technology Bareilly whose advice and supervision had helped in
the completion of the project work. We are also very thankful to
MR.Anubhav Saxena (Internal Guide), Asst. Prof. at SRMS CET Bareilly for
guiding us in completing our project successfully.

Pradeep kumar)
Roll NO.-1301470025





Certificate of Institute



Executive Summary

Part 1



Overview of Indian Retail Industry


Major players of Retail Industry in India


Type of retail industry in India


Growth Indian retailing industry


Introduction of Study
4.1 Literature Review
4.2 Background of the Study
4.3 Objectives of the Study


Research Methodology
5.1 Research Design
5.2 Sources of Data
5.3 Data Collection Method
5.4 Population
5.5 Sampling Method
5.6 Sampling Frame
5.7 Date Collection Instruments


Questionnaire for

Bibliography& References




Different categories of organising retail sector







Global retail scenario of all the world


Major players of retailing industry in India


Top 10 Retailers Worldwide


Summary of research methodology




Chapter 1:-


The word "Retail" originates from a French-Italian word "retailer"
meaning someone who cuts off or shreds a small piece from something.
Retailing includes activities of marketing and selling products or services to
end consumers for their own household or personal use. Retailer is a Person or
Agent or Company or Organization who is instrumental in reaching the Goods
or Merchandise or Services to the End User or Ultimate Consumer.

What is retailing?
Retailing is a distribution channel function, where one organisation
buys products from supplying firms or manufactures products themselves,
and then sells these directly to consumers.
In majority of retail situations, the organisation, from whom a
consumer buys, is a reseller of products obtained from others, and not the
product manufacturer. However, some manufacturers do operate their own
retail outlets in a corporate channel arrangement.


Retailers offer many benefits to suppliers and customers as resellers.

Consumers, for instance, are able to purchase small quantities of an assortment
of products at a reasonably affordable price. Similarly, suppliers get an
opportunity to reach their target market, build product demand through retail
promotions, and provide consumer feedback to the product marketer.
Most Indian shopping happens in open markets or numerous small
grocery and retail shops. Shoppers typically wait outside the shop, ask for
what they want, and cannot pick or examine a product from the shelf.Access to
the shelf or product storage area is limited. Once the shopper requests the food
staple or household product they are looking for, the shopkeeper goes to the
container or shelf or to the back of the store, brings it out and offers it for sale
to the shopper. Often the shopkeeper may substitute the product, claiming that
it is similar or equivalent to the product the consumer is asking for.
The product typically has no price label in these small retail shops;
although some products do have a manufactured suggested retail price
(MSRP) pre-printed on the packaging. The shopkeeper prices the food staple
and household products arbitrarily, and two consumers may pay different
prices for the same product on the same day. Price is sometimes negotiated
between the shopper and shopkeeper. The shoppers do not have time to
examine the product label, and do not have a choice to make an informed
decision between competitive products.
India's retail and logistics industry, organized and unorganized in
combination, employs about 40 million Indians (3.3% of Indian population).
The typical Indian retail shops are very small. Over 14 million outlets operate
in the country and only 4% of them being larger than 500 sq. ft. (46 m2) in
size. India has about 11 shop outlets for every 1000 people.
Vast majority of the unorganized retail shops in India employ family
members, do not have the scale to procure or transport products at high
volume wholesale level, have limited to no quality control or fake-versusauthentic product screening technology and have no training on safe and
hygienic storage, packaging or logistics. The unorganized retail shops source


their products from a chain of middlemen who mark up the product as it

moves from farmer or producer to the consumer. The unorganized retail shops
typically offer no after-sales support or service. Finally, most transactions at
unorganized retail shops are done with cash, with all sales being final.
Until the 1990s, regulations prevented innovation and entrepreneurship
in Indian retailing. Some retails faced complying with over thirty regulations
such as "signboard licenses" and "anti-hoarding measures" before they could
open doors. There are taxes for moving goods to states, from states, and even
within states in some cases. Farmers and producers had to go through
middlemen monopolies. The logistics and infrastructure was very poor, with
losses exceeding 30 percent.
Through the 1990s, India introduced widespread free market reforms,
including some related to retail. In between 2000 to 2010, consumers in select
Indian cities have gradually begun to experience the quality, choice,
convenience and benefits of organized retail industry.


Major retail sector in India

There are many sectors in retail industry in India and there are established in
various company at specific sectors.

1. Food and grocery:

Food Bazaar
Aditya Birla Retail Ltd
Trinethra Super Market Ltd

Reliance Retail

2. Fashion and accessories

Shoppers Stop

3. Koutons:
4. Footwear

5. Khadims:
6. Home and office improvement
Godrej Lifespace
Home Stop
Home Town

7. Electronics

8. Catering services
Yum! Restaurants:
Caf Coffee Day

9. Telecom
The Mobile Store:

10. Pharmaceuticals
Apollo Pharmacy

11. Beauty and wellness

Reliance Wellness
Himalaya Drugs


12. Jewellery
Reliance Jewels

13. Timewear

Books, music and gifts

14. Crossword
15. Entertainment

How does the retail sector consumer think?


Trends in the Retail industry

Emergence of organized retail:
Real estate development in the country, for example, the construction of
mega malls and shopping malls, is augmenting the growth of the
organized retail business


Spending capacity of youth of India:

India has a large youth population, which is a conducive environment to
growth of this sector.
Raising incomes and purchasing power:
The per capita income in India has doubled between 2000- 01 and 200910 resulting in improved purchasing power.
Changing mind set of customers:
The customer mind set is gradually shifting from low price to better
convenience, high value and a better shopping experience
Easy customer credit:
Emergence of concepts such as quick and easy loans, EMIs, loan
through credit cards, has made purchasing possible for Indian
consumers, for products such as consumer durables
Higher brand consciousness:
There is high brand consciousness among the youth; 60% of Indias
population is below the age of 30 leading to popularization of brands
and products

Global Retail Scenario

Retailing has played a major role in the global economy. In developed
markets, retailing is one of the most prominent industries. In 2008, the US
retail sector contributed 31% to the GDP at current market prices. In developed
economies, organized retail has a 75-80% share in total retail as compared
with developing economies, where un-organized retail has a dominant share.
(Table no. 1 = Global retail scenario of all the world)1
Sr. No.

Company name


Banner sales 2007E (in

us$ million)

No. of outlets,


















SEVEN & I(ii)








AEON (i)

















Global retail sales was estimated to be around US$ 12 trillion in 20072;

however, in 2008, the slowdown in the global economy, especially in the US,
and credit crunch, decreased consumer spending. On a global level, the
economy performed robustly till 2007, but the US crisis spread over to Europe
in early 2008, and its impact was felt in the Asia-Pacific region by mid-2008.
India has the highest number of retail outlets in the world at over 13 million
retail outlets, and the average size of one store is 50-100 square feet. It also has
the highest number of outlets (11,903) per million inhabitants. The per capita
retail space in India is among the lowest in the world, though the per capita
retail store is the highest. Majority of these stores are located in rural areas.
Retail formats in India:
Hyper marts/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 areindividually 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 theconvenience offered.
Shopping malls: the biggest form of retail in India, malls offers customers a
mix of all types ofproducts and services including entertainment and food
under a single roof.
E-trailers: are retailers providing online buying and selling of products and
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 smallitems can be bought via vending machine.


Category killers: small specialty stores that offer a variety of categories. They
are known as categorykillers as they focus on specific categories, such as
electronics and sporting goods. This is also knownas Multi Brand Outlets or
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 example.

Chapter: - 2

Major players of retailing

industry in India2
There are various major players in India retailing industry and there are
location at various cities in India

Brand Name

Outlet type




DFL (Joint venture with Food World
DSP Merrill Lynch and


Chennai, Bangalore
and Hyderabad




Food Bazaar


2International Journal of Multidisciplinary Research Vol.2 Issue 1, January 2012, ISSN 2231

5780 , Data has been compiled from the website of different companies



Big Bazaar


Nilgiris Franchisee Pvt. Nilgiris



Chennai, Bangalore,
Pondicherry and tier
two towns in Tamil

The Trinethra Group



Major cities
Andhra Pradesh and
Tamil Nadu

Fabmall India Pvt Ltd





ownership Margin Free

Discount stores

Major cities
Kerala, Tamil Nadu
and Karnataka

Food Express India Ltd

Monday to Sunday,



Home Stores Pvt. Ltd.

Sabka Bazaar

Discount stores

Delhi and adjoining


Pyramid Retail Ltd.




Trent (Tata Group)

Star India Bazaar



Spar- India Ltd.




Namdharis Group

Namdharis Fresh


Bangalore, Delhi

Adani Group




Department of Food and Super Bazaar

Public Distribution (Govt.
of India Coop.)



Department of Food and Kendriya Bhandar

Public Distribution (Govt.
of India Coop.)



Vishal Mega Mart

Food Mart

Hyper Market




Reliance India Ltd.

Reliance Fresh

Discount Stores




Rei Agro Ltd.


Discount Stores

North India


Chapter: - 3

Kind of Indianretail
The Indian retail industry is divided into organized and unorganized
sectors. The Indian retail sector is highly fragmented, with a major share of its
business is being run by unorganized retailers like the traditional family run
stores and corner stores. The organized retail however is at a very nascent
stage, though attempts are being made to increase its proportion bringing in a
huge opportunity for prospective new players.
There are two types of Retailing:
Organized Retailing

Unorganized Retailing

Organized Retailing
Organized retailing refers to trading activities undertaken by licensed retailers,
that is, those who are registered for sales tax, income tax, etc. These include


the corporate-backed hypermarkets and retail chains, and also the privately
owned large retail businesses.

Unorganized Retailing

Indian retail is dominated by a large number of small retailers consisting of the

local kirana shops, owner-manned general stores, chemists, footwear shops,
apparel shops, paan and beedi (local betel leaf and tobacco) shops, hand-cart
hawkers, pavement vendors, etc. which together make up the so-called
"unorganized retail" or traditional retail.

Difference between Organized Retailing &Unorganized Retailing

Organized Retailing




Unorganized Retailing
trading Unorganized retailing, on the other hand,

activities undertaken by licensed retailers, refers to the traditional formats of low-cost

that is, those who are registered for sales retailing
tax, income tax, etc
There are include the corporate-backed There are include the local kirana shops,
hypermarkets and retail chains, and also the owner-manned general stores, chemists,
privately owned large retail businesses.

footwear shops, apparel shops, paan and

beedi (local betel leaf and tobacco) shops,
hand-cart hawkers, pavement vendors, etc

Multi storied malls and huge complexes

Low cost retailing. These are highly

that offer a large variety of products in

competitive outlets, with negligible rental

terms of quality, value for money and

costs (unregistered kiosks or traditional

makes shopping a memorable experience.

property), cheap workers (work is shared by

members of family) and low taxes and

The ownership and management rest with

The ownership and management rest with


two or more person.

one person only

The organized stores are not having number The unorganized stores are having number
of options to cut their costs

of options to cut their costs

The customersare want to change in

This is one of the good reasons which

many shopping malls.

the customer doesn't want to change

their old loyal kirana shop.

Organized retailing comprises mainly of modern retailing with busy shopping
malls, multi storied malls and huge complexes that offer a large variety of
products in terms of quality, value for money and makes shopping a
memorable experience.

Organized retailing refers to trading activities undertaken by licensed

retailers, that is, those who are registered for sales tax, income tax, etc. These


include the corporate-backed hypermarkets and retail chains, and also the
privately owned large retail businesses.
According to AT Kearney report for the year 2011, organized retail
accounts for 7 per cent of India's roughly US$ 435 billion retail market and is
expected to reach 20 per cent by 2020.Food accounts for 70 per cent of underpenetrated by organized retail. Organized retail has a 31 per cent share in
clothing and apparel and continues to see growth in this sector. The home
segment shows promise, growing 20 to 30 per cent per year. India's more
urban consumer mind-set means this sector is poised for growth.Indian retail,
but it remains.
Organized retailing refers to trading activities undertaken by licensed
retailers, i.e. those who are registered for sales tax, income tax, etc.These
include the corporate backed hypermarkets and retail chains and also the
privately owned large retail businesses.

(Table no. 2 = Top 10 Retailers Worldwide)3



Home country

Wal-mart store ,inc.


Carrefoer Group

The Home Depot, Inc.


The Kroger co.


Royal Ahold

Metro AG

Target corporation


Alertson`s, inc.


Sear,roebuck and co.



Kmart corporation





Different categories of organizing retail



Orgnasing Retailing


Clothing, textiles, & fashion accessories

Books, music, gifts


Health & beauty35

care services

Consumer durables, home appliances

Furnishings, furniture home & office, utensils



Catering services






10.6 10.4





2.8 2.6

different retail sector




Organized retail in India is little over a decade old. It is largely an urban

phenomenon and the pace of growth is still slow. Some of the reasons for this
slow growth are: -

The Kiranas Continue

The very first challenge facing the organized retail industry in India is competition
from the unorganized sector. Traditionally retailing has established in India for
centuries. It is a low cost structure, mostly owner operated, has negligible real
estate and labor costs and little or no taxes to pay. Consumer familiarity that runs
from generation to generation is one big advantage for the traditional retailing
On the other hand, organized sector have big expenses to meet and yet have to
keep prices low enough to compete with the traditional sector.
Retailnot beingrecogning as an industry in India
Lack of recognition as an industry hampers the availability of finance to the
existing and new players. This affects growth and expansion plans.
The High cost of Real estate
Real estate prices in some cities in India are amongst the highest in the world. The
lease or rent of property is one of the major areas of expenditure; a high lease
rental reduces the profitability of a project.
High Stamp duties

In addition to the high cost of real estate the sector also faces very high stamp
duties on transfer of property, which varies from state to state (12.5% in
Gujarat and 8% in Delhi). The problem is compounded by problems of clear
titles to ownership, while at the same time land use conversion is time
consuming and complex as is the legal process for settling of property
Lack of adequate infrastructure
Poor roads and the lack of a cold chain infrastructure hampers the
development of food and grocery retail in India. The existing supermarkets and
foods retailers have to invest a substantial amount of money and time in
building a cold chain network.
Multiple and complex taxation system


The sales tax rates vary from state to state, while organized players have to
face a multiple point control and system there is considerable sales tax evasion
by small stores. In many locations, retailers have to face a multi-point octroi
with the introduction of value Added Tax (VAT) in 2005, certain anomalies in
the existing sales tax system causing disruption in the supply chain are likely
to get corrected over a period of time.
There is price war between different retail organizations. Each and every one is
saying to provide goods at low cost and offers various promotional schemes.
In such a case it is difficult to keep ones customers with oneself.

Retail marketing gets various opportunities to grow up in the Indian
market. Not only retailing but Manufacturers as well as suppliers, and buyers
have various opportunities, some of which are mentioned below
What is in store


Organized retail provides brands much needed visibility and platform for
customer interaction. It also helps in launching of new product or product
variant and in market penetration. It has wider product range and more
frequent, speedier deliveries.
Increased urbanization has shifted consumers to one place and thus a single
retail can catch more customers.
Nuclear family
As the time passed away joint families came in a new form i.e. nuclear family.
Again the income level of these nuclear families increases because both
members started earning. This results into increased power of purchase and
lack of time. Now they want everything under one roof. This brought the
concept of organized retailing.
Plastic revolution
Increased use of credit cards is in favour of retail marketing. It creates
requirement even when it is not necessary.
Jo Dikata Hai Woh Bikta Hai
Organized retail stores put stress on proper infrastructure like well-maintained
building, air conditioning, trained employees, electronic machine, parking
facilities and proper display of goods category wise. Here customers feel
comfort, joy and entertainment. Purchasing becomes joy for him. Selfselection saves time and gives more opportunities and satisfaction. Fix cost
removes the threat of misleading. They avail various discounts and
promotional schemes presented by the manufacturers. They also get product of
different varieties and of proper quality.
Retail marketing is one of the largest employments generating industry. It
provides employment to skilled, semi-skilled as well as to unskilled persons.
Thus it helps in the socio- economic development of the society.
Price war


Increase in the no of retail outlets increases competition among these retailers.

To attract customers they give various promotional schemes as various
discounts, buy one get one free, another product with any particular product,
festival special, etc.
Contract farming
The retail marketers directly purchase from farmers and reducing middlemen,
thus provide proper cost to farmers and also set proper price for consumers.
They also make contract with farmers to get proper amount of crops and
Reduces supply chain management
The big players of retail marketing and the manufacturing companies directly
come in contact thus reducing many intermediary chains. Manufacturers also
give many promotional schemes for their product that is beneficial for

Traditional or Unorganized retail outlets are normally street markets,
counter stores, kiosks and vendors, where the ownership and management rest
with one person only. This sector accounts for two thirds of the market and
requires low skilled labor. These are highly competitive outlets, with negligible
rental costs (unregistered kiosks or traditional property), cheap workers (work
is shared by members of family) and low taxes and overheads.


Indian retail is dominated by a large number of small retailers

consisting of the local kirana shops, owner-manned general stores, chemists,
footwear shops, apparel shops, paan and beedi(local betel leaf and tobacco)
shops, hand-cart hawkers, pavement vendors, etc. which together make up the
so-called unorganized retail" or traditional retail. The last few years have
witnessed the entry of a number of organized retailers opening stores in
various modern formats in metros and other important cities. Unorganized
retailers normally do not pay taxes and most of them are not even registered
for sales tax, VAT, or income tax.
Unorganized retailing, on the other hand, refers to the traditional
formats of low-cost retailing, for example, hand cart and pavement vendors, &



local kirana shops,




stores, paan/beedi shops, convenience stores, hardware shop at the corner of

your street selling everything from bathroom fittings to paints and small
construction tools; or the slightly more organized medical store and a host of
other small retail businesses in apparel, electronics, food etc.


The reasons might

unorganised retailing:-




In smaller towns and urban areas, there are many families who are traditionally
using these kiranashops/ mom and pop stores offering a wide range of
merchandise mix. Generally these kirana shops are the family business of
these small retailers which they are running for more than one generation.
These kirana shops are having their own efficient management system and
with this they are efficiently fulfilling the needs of the customer. This is one of
the good reasons why the customer doesn't want to change their old loyal
kirana shop.


A large number of working class in India is working as daily wage basis, at the
end of the day when they get their wage, they come to this small retail shop to
purchase wheat flour, rice etc. for their supper. For them this the only place to
have those food items because purchase quantity is so small that no big retail
store would entertain this.
Similarly there is another consumer class who are the seasonal worker. During
their unemployment period they use to purchase from this kirana store in credit
and when they get their salary they clear their dues. Now this type of credit
facility is not available in corporate retail store, so this kirana stores are the
only place for them to fulfill their needs.
Another reason might be the proximity of the store. It is the convenience store
for the customer. In every corner the street an unorganized retail shop can be
found that is hardly a walking distance from the customer's house. Many times
customers prefer to shop from the nearby kirana shop rather than to drive a
long distance organized retail stores.
This unorganized stores are having number of options to cut their costs. They
incur little to no real-estate costs because they generally operate from their

Chapter: - 4

Growth of Indian Retail

An increasing number of people in India are turning to the services sector for
employment due to the relative low compensation offered by the traditional
agriculture and manufacturing sectors.
The organized retail market is growing at 3.5 percent annually while growth of
unorganized retail sector is pegged at 6 percent.


The Retail Business in India is currently at the point of inflection. Rapid

change with investments to the tune of US $ 25 billion is being planned by
several Indian and multinational companies in the next 5 years.
It is a huge industry in terms of size and according to management consulting
firm Techno Park Advisors Pvt. Ltd., it is valued at about US $ 350 billion.
Organized retail is expected to garner about 16-18 percent of the total retail
market (US $ 65-75 billion) in the next 5 years.
According to the tenth report of GRDI of AT Kearney, India is having a very
favourable retail environment and it is placed at 4th spot in the GRDI.
The main reasons behind that is the 9% real GDP growth in 2010, forecasted
yearly growth of 8.7% through 2016, high saving and investment rate and
increased consumer spending.
According to report, organized retail accounts for 7% of Indias roughly $435
billion retail market and is expected to reach 20% by 2020. Food accounts for
70% of Indian retail, but it remains under penetrated by organized retail.
Organized retail has a 31% share in clothing and apparel and continues to see
growth in this sector.
A report by Boston Consulting Group has revealed that the countrys organized
retail is estimated at US $ 28 billion with around 7% penetration.
It is projected to become a US $ 260 billion business over the net decade with
around 21% penetration.
The analysts believe that the sector is likely to show significant growth of over
9% over the next ten years and also see rapid development in organized retail
format with proportion likely to reach more respectable 25%by 2018.
The BMI India Report for the first quarter of 2012 released forecasts that total
retail sales with growth from US $ 422.09 billion in 2011 to US $ 825.46
billion by 2015.
The report highlights strongly underlying economic growth, population
expansion, increasing disposable income and rapid emergence of organized
retail infrastructure as major factors behind the forecast growth.
According to department of Industry Policy and Promotion Cumulative, FDI
inflows in single brand retail trading stood at US$ 44.45 million during April
2000 to September 2011.
Indian retail sector is wearing new clothes and with a three year compounded
annual growth rate of46-64%, retail is the fastest growing sector in the Indian
The sector is the second largest employer after agriculture, employing more
than 35 million people with wholesale trade generating an additional


employment to 5.5 million crore.The enormous growth of retail industry has

created a huge demand for real estate. Property developers are creating retail
real estate at an aggressive pace.
According to report titled India Organized Retail Market 2010, published by
Knight Frank, during 2010- 12,around 55 million square feet of retail space
will be ready in Mumbai, NCR, Bangalore, Kolkata, Chennai, Hyderabad and
Besides between 2010 and 2012 the organized retail real estate will be grown
from existing 41 million square feet to 95 million square feet.
The total no. of shopping mall is expected to expand at CAGR of 18.9% by
Hypermarket, currently accounting for 14% of mall space is expected to
witness high growth.
Industry experts predict that the next phase of growth in the retail sector will
emerge from the rural market.
By 2012, the rural retail market is projected to have a total of more than 50%
market share.
India's retail market is expected to be worth about US$ 410 billion, with 5 per
cent ofsales through organised retail, meaning that the opportunity in India
remains immense.
Retail should continue to grow rapidlyup to US$ 535 billion in 2013, with
10 per cent coming from organised retail, reflecting a fast-growing middle
class, demanding higher quality shopping environments and stronger brands,
according to the report Expanding Opportunities for Global



Chapter 4:-

Literature Review

Background of the Study

Objectives of the Study

4.1 :- Literature Reviews

According to Dholakia (1999),i the rationale for shopping is making physical
visits to a shopping site. It is considered as a household task as well as a form
of recreation, relaxation and entertainment. Shopping is also considered to
have the most positive attribute of being a leisure activity along with work
(Dholakia, 1999).
Sinha & Banerjee (2004)ii studied the drivers of store choice in various
product categories, in the context of evolving retail industry in India and found
that the distinct store features as perceived by respondents with true
motivations of various consumers in patronizing various stores. Study suggests
that consumers of Indian unorganized retail market do not require the service
paraphernalia offered by many retailers. Store environment plays a vital role
for store patronage and repeat purchases which includes convenience, value
for money products, etc.
Backstrom & Johansson (2006)iii studied factors that influence consumers'
in-store experiences. In-store experiences are constituted by traditional values


such as the behavior of the personnel, a satisfactory selection of products,

price and a layout that facilitates the store visit.
Terblanche & Boshoff (2006)iv suggested that retailers will have to accept
that it is not only what they are marketing but also how it is done. The personal
(face-to-face) interaction between retail staff and shoppers is of critical
Kalhan (2007)v studies the impact of organized retail on unorganized retail
shops. Major findings reveal that 70 % of unorganized retailers reported falling
sales. This fall in sales is due to superior shopping environment, convenience,
availability of variety, ambience of shop, and availability of parking space and
perception of quality of products sold in organized retail setup.
Goswami (2008)vi studied the shopping experiences in kirana stores and in
modern stores. The major findings suggest Kirana stores to improve or to
enrich shopping experiences. Kiranas also have to stay alert, try to upgrade
and have to improve on service quality while concentrating on innovation and
Das & Kumar (2009)vii studied the impact of sales promotion on consumers
shopping experiences. A major finding reveals that keeping product
satisfaction constant, sales can be improved by enhancing shopping experience
which includes convenience of shopping, ease of locating products, easy check
in and checkouts, customer friendly sales people and customer friendly
policies. Secondly finding reveals that purchase decision for the same product
under same promotion at different stores may vary because difference in
shopping experiences provided by different stores. Further this study shows
that promotion plays a limited role on consumers buying behavior where only
small percentage of people are attracted to such sales promotion and wait for
it. Study lastly emphasizes on the importance of shopping experience (ease of
shopping, parking space, convenience etc.) for positively impacting consumer
buying behavior.
Goswami & Mishra (2009)viii seek to understand whether Indian consumers
are likely to move from traditional Kirana stores to large organized retailers
while shopping for groceries. The research finding reveals that customer
patronage to grocery stores was found to be positively related to location,
helpful, trustworthy salespeople, and home shopping, cleanliness, and offers,
quality and negatively related to travel convenience. Kiranas do well on


location but poorly on cleanliness, offers, quality, and helpful trustworthy

salespeople. The converse is true for organized retailers. Study also finds that
Kiranas have major disadvantages on all customer perception scores except
location. These scores being less important determinants of patronage
compared with location, in the short run kiranas may not be ousted out of
customers' flavor. However, in the long run if they do not work on these other
factors, they would face oblivion. Kiranas need to upgrade their facilities to be
able to compete with the organized retailers to provide consumers better
shopping experiences, whereas organized retailers which are expected to
improve their location scores rapidly in the near future will grow rapidly.
Inside store (2009)ix studied the shopping experiences at traditional Indian
retail stores. Major findings reveal that 70% of purchases are made at the point
of purchase, so store environment can impact the 70% of purchases which is
one of the important constituent of shopping experience in unorganized retail
Mittal and Parashar (2010)x explained that irrespective of area, people prefer
grocery stores to be nearby, product assortment is important for grocery.
Ghosh & Srivastava (2010) in his research found that service quality has
become vital for service firms to pay attention due to increased competition.
Sivaraman (2010)xianalyzed customer attitude toward unorganized retailers on
the attributes of store image, range of products, brand choices, price, store
ambience, credit availability, shop proximity and complements. However there
were no perceived difference on product freshness and customer care. This
study clearly point out that the unorganized retailers are facing stiff
competition from the organized retailers. This has reduced their sales, profit,
and employment considerably. The operational cost, consumer credit also
increased due to the presence of organized retailers.
Kumar (2011)xiistudied on the strategies of unorganized retailers with
reference to consumer durables and found that a product strategy which means
merchandise is the most important factor followed by price, distribution and
Kushwaha (2011)xiii compared the perception of consumers in organized and
unorganized retail market and found that factors like cleanliness, distance,


price, quality, safety and space for shopping are the determinant factors for
unorganized retail.
Purohit and Kavita(2013) according to their studies that the traditional
retailers are not very much clear about the consequences of the modern
retailing the traditional retailers are neutral or undecided, modern retailing will
cut the profit margin of the traditional retailers; the modern retailing will lead
healthy competition in the market, modern retailing will reduce the sales
volume of the traditional retailers and traditional retailers should improve
customer care services in the era of modern retailing.
Shaoni Shabnam (2013): It is important to highlight that in organized retail,
the status of employment is much better than that in unorganized retail. Hence
it is definitely desirable that more and more labor gets absorbed in this sector
of retail. In the current context, the labor employed in unorganized retail stands
unfit for finding employment in organized retail. If appropriate training and
skills could be imparted to them, it is possibly feasible to offer better forms of
employment to them in the organized retail sector. The status of employment is
much better than that in unorganized retail. Hence it is definitely desirable that
more and more labor gets absorbed in this sector of retail. In the current
context, the labor employed in unorganized retail stands unfit for finding
employment in organized retail. If appropriate training and skills could be
imparted to them, it is possibly feasible to offer better forms of employment to
them in the organized retail sector.
Meeta Punjabi (2013): According to their study they suggest that the
development efforts in this area are based on three grounds: First, farmers
associated with the modern value chains earn higher returns than selling to the
traditional markets. Second, the modern supply chains have specific quality
requirements which are easier to meet by the large and medium farmers and
the small farmers tend to get left out of these markets.Third, there are several
successful examples of linking small farmers to these modern value chains
with effort from government agencies, NGOs and development agencies. This
knowledge presents strong grounds for a closer look at the emerging sector in
Mathew Joseph (2013): Unorganized retailers in the vicinity of organized

retailers experienced a decline in their volume of business and profit in the

initial years after the entry of large organized retailers. The adverse impact on


sales and profit weakens over time. There was no evidence of a decline in
overall employment in the unorganized sector as a result of the entry of
organized retailers. There is some decline in employment in the North and
West regions which, however, also weakens over time. The rate of closure of
unorganized retail shops in gross terms is found to be 4.2% per annum which
is much lower than the international rate of closure of small businesses. The
rate of closure on account of competition from organized retail is lower still at
1.7% per annum. There is competitive response from traditional retailers
through improved business practices and technology up gradation. A majority
of unorganized retailers is keen to stay in the business and compete, while also
wanting the next generation to continue likewise. Small retailers have been
extending more credit to attract and retain customers.





The Indian Retail Industry is the fifth largest in the world. Comprising
of organized and unorganized sectors, Indian retail industry is one of the
fastest growing industries in India, especially over the last few years. Though
initially the retail industry in India was mostly unorganized, however with the
change of taste and preferences of consumers, the Industry is getting more
popular these days and getting organized as well. The Indian Retail Industry is
expected to grow from US$330 billion in 2007 to US$640 billion by 2015.
According to the 10th Annual Global Retail Development Index
(GRDI) of A.T. Kearney,India is having a very strong growth fundamental
base thats why its the perfect time to enter into Indian Retail Market. Indian
Retail Market accounts for 22% of countrys GDP and it contributes to 8% of
the total employment. The total retail spending is estimated to double in the
next five years. Of this, organized retail currently growing at a CAGR of
22%- is estimated to be 21% of total expenditure. The unorganized retail sector


is expected to grow at about 10% per annum with sales expected to rise from
$309 billion in 2006-07 to $496 billion in 2011-12. This paper focused on
changing face of Retail Industry, organized or unorganized retail industry,
major players in retail industry and also highlights the challenges faced by the
industry in near future.

Indian Retail Industry

Indias Retailing Boom has acquired further momentum, dynamism
and vibrancy with international players experimenting in the Indian market
and the countrys existing giants taking bold innovative steps to woo the
consumer. At the same time, the early entrants are redefining their strategies to
stay competitive and suit the new market landscape.
The next few years are liking to witness rapid growth in the organized
retailing sector with several leading international players establishing their
presence in India by adjusting their formats to suit local tastes and buying
behaviour while regional players have stepped up their defences and are
striving to gain edge over global players by using their knowledge of local
markets. Clearly the next wave of the retail boom is upon us. Retailing is one
of the pillars of the economy in India. Over the past few years, the retail sale in
India is hovering around 33-35% of GDP as compare to 20% in the US.
The Indian retail industry is the fifth largest in the world. Comprising
of organized and unorganized sectors, Indian retail industry is one of the
fastest growing industries in India, especially over the last few years. Though
initially, the retail industry in India was mostly unorganized, however with the
tastes and preferences of the consumers, the industry is getting more popular
these days and getting organized as well. Now with growing market demand,
the industry is expected to grow at pace of 25-30% annually.
The Indian retail industry is currently growing at a great pace and is
expected to go up to US $ 833 billion by the year 2013. In the last four years
consumer spending in India has climbed up to 75%. In India though, organized
retail accounts for app. 5-6% of total retail revenues, however, with a young
population, increasingdisposable income, changing life styles and a robust


economy India is set to emerge as one of the fastest growing organized retail
markets in the world.
Retailing is one of the biggest sectors and it is witnessing revolution in
India. The new entrant in retailing in India signifies the beginning of retail
revolution. India's retail market is expected to grow tremendously in next few
years. According to AT Kearney, The Windows of Opportunity shows
thatRetailing in India was at opening stage in 1995 and now it is in peaking
stage in 2006. The origins of retailing in India can be traced back to the
emergence of Kirana stores and mom-and-pop stores. These stores used to
cater to the local people. Eventually the government supported the rural retail
and many indigenous franchise stores came up with the help of Khadi &
Village Industries Commission. The economy began to open up in the 1980s
resulting in the change of retailing. The first few companies tocome up with
retail chains were in textile sector, for example, Bombay Dyeing, S Kumar's,
Raymonds, etc. Later Titan launched retail showrooms in the organized retail
sector. With the passage of time new entrants moved on from manufacturing to
pure retailing.
Retail outlets such as Food world in FMCG, Planet M and Music world
in Music, Crossword in books entered the market before 1995. Shopping malls
emerged in the urban areas giving a world-class experience to the customers.
Eventually hypermarkets and supermarkets emerged. The evolution of the
sector includes the continuous improvement in the supply chain management,
distribution channels, technology, back-end operations, etc. this would finally
lead to more of consolidation, mergers and acquisitions and huge investments.
India's retail market is expected to grow tremendously in next few years. India
shows US$330 billion retail market that is expected to grow 10% a year, with
modern retailing just beginning.
In India, the most of the retail sector is unorganized. The main
challenge facing the organized sector is the competition from unorganized
sector. Unorganized retailing has been there in India for centuries. The main
advantage in unorganized retailing is consumer familiarity that runs from
generation to generation. It is a low cost structure; they are mostly operated by


owners, have very low real estate and labor costs and have low taxes to pay.
Organized retail business in India is very small but has tremendous scope.

Customer Attribute affecting choice of format

Challenges Faced by the Retail Industry:

International Standards:
Even though India has well over 5 million retail outlets of different sizes and
styles, it still has a long way to go before it can truly have a retail industry at
par withInternational standards. This is where Indian companies and
International brands have a huge role to play.
Inefficient supply chain management:
Indian retailing is still dominated by the unorganized sector and there is still a
lack of efficient supply chain management. India must concentrate on
improving the supply chain management, which in turn would bring down
inventory cost, which can then be passed on to the consumer in the form of
low pricing.
Lack of Retail space:
Most of the retail outlets in India have outlets that are less than 500 square feet
in area. This is very small by International Standards.
Cultural Diversity:
India's huge size and socio economic and cultural diversity means there is no









Manufacturers and retailers will have to devise strategies for different sectors
and segments which by itself would be challenging.
Real estate issues:
The enormous growth of the retail industry has created a huge demand for real
estate. Property developers are creating retail real estate at an aggressive pace.
With over 1,000 hypermarkets and 3,000 supermarkets projected to come up
by 2011, India will need additional retail space of 700,000,000 sq.ft.
(65,000,000 m2) as compared to today.
Human resource problems:
Trained manpower shortage is a challenge facing the organized retail sector in
India. The Indian retailers have difficulty in finding trained person and also
have to pay more in order to retain them. This again brings down the Indian
retailers profit levels.
Frauds in Retail:
It is one of the primary challenges the companies would have to face. Frauds,
including vendor frauds, thefts, shoplifting and inaccuracy in supervision and
administration are the challenges that are difficult to handle. This is so even
after the use of security techniques, such as CCTVs and POS systems. As the
size of the sector would increase, this would increase the number of thefts,
frauds and discrepancies in the system.
Challenges with Infrastructure and Logistics:
The lack of proper infrastructure and distribution channels in the country
results in inefficient processes. This is a major hindrance for retailers as a nonefficient distribution channel is very difficult to handle and can result in huge
losses. Infrastructure does not have a strong base in India. Urbanization and
globalization are compelling companies to develop infrastructure facilities.
Transportation, including railway systems, has to be more efficient. Highways
have to meet global standards. Airport capacities and power supply have to be
enhanced. Warehouse facilities and timely distribution are other areas of
challenge. To fully utilize India's potential in retail sector, these major
obstacles have to be removed.


SWOT Analysis of Retail Sector:

1. Strengths:

Major contribution to GDP

High Growth Rate:
High Potential:
High Employment Generator:

2. Weaknesses (limitation):

Lack of Competitors
Highly Unorganized
Low Productivity
Shortage of Talented Professionals
No Industry status,

3. Opportunities (benefits):
Healthy Competition will be boosted and there will be a check on the
prices (inflation).
Create transparency in the system.
Intermediaries and mandi system will be evicted, hence directly
benefiting the farmers and producers.
Quality Control and Control over Leakage and Wastage.
Heavy flow of capital will help in building up the infrastructure for
the growing population.


There will be sustainable development and many other economic

issues will be focused upon.
4. Threats:

Current Independent Stores will be compelled to close

Big players can knock-out competition.
India does not need foreign retailers.
Remember East India Company it entered India as trader and then

took over politically.

The government hasnt able to build consensus.

In view of the above analysis, if we try to balance opportunities and prospects

attached to the given economic reforms, it will definitely cause good to Indian
economy and consequently to public at large, if once implemented. Thus the
period for which we delay these reforms will be loss for government only, since
majority of the public is in favour of reforms. All the above mentioned
drawbacks are mostly politically created. With the implementation of this policy
all stakeholders will benefit whether it is consumer through quality products at
low price, farmers through more transparency in trading or Indian corporates
with 49% profit share remaining with Indian companies only.


4.3 :STUDY


The following are the objectives of the Study:-

Indian retailers are providing creditworthiness to their customers and also

providing good relation to their customers while the organized retailers are
good space for visiting and parking.
To study the strategy using by Organized and Unorganized sector to survive in
this competitive market.
To present the future constraints of retail sector in Ahmedabad city.
The aim of the study is to identify the factors affecting consumer preference
related to shopping at organized retail store and unorganized retail stores.
To identify the reason for people select unorganized retailing for shopping
(local market).
To know about the selling technique through which the consumer are attracted
towards the organized retails (shopping malls) products & services.
To know about the situation for present retailing industry in Ahmedabad city.
To find out Does Festival seasons advertising has any impact in the minds of
To understand the nature of merchandise budgeting and unit planning.
To understand the concept of relationship marketing and how does it apply to
theOrganized retail and unorganized retail sector.


To find out, what attributes consumers are looking for in retailing product,

Significance of Study
The following are the Significances of the Study:-

This study report will help to Retailing Companies in improving their selling
The report contains the suggestions and findings of the product of the
company which will help them to improve their quality of the product.
The study work did on the basis of the retailer viewpoints which will help the
company to understand the customer needs, requirement, perception and many
more things.
The reports conclusion and suggestion will help the companies to understand
the coverage of the market with the use of sales strategy and also provide the
idea to the company in findings the necessary field where the product is highly
This report will help to the society or in commercial sector who wants to go
for research work in future on Retailing industry.


Aspect that put consumers off


Chapter: - 5

Research methodology

Research design
Sampling Procedure
Sample location
Sampling Method
Sample Size
Data collection
Data collection instrument


5.1 Research design

Research design is a one kind of framework or blueprint upon which whole
process going on. In this we have to clearly define that which method of the
research we have to follow. It may be based on the judgment or situational
A research design specifies that method and procedures for conducting a
particular study. The researcher should specify the approach be intends to use
with respect to the proposed study broadly speaking research can be groped in
to three categories.
i. Exploratory (ambiguous problem),
ii. Descriptive (aware of problem),
iii. Explanatory (clearly defined problem).
Exploratory Research Design
An exploratory research design focuses on the discovery of ideas and is
generally based on secondary data.
Descriptive Research Design
A descriptive study is undertaken when the researcher want to know
the characteristics of certain group such as age, sex, income, education
level etc.
Explanatory Research Design
A casual researcher is under taken when the researcher is interested
knowing a cause and effect relationship between two or more variables.

5.2 Sampling Procedure

For collecting the data from the population I have used simple random
sampling method to get the sample from the population. This enables us to
make the study easy and create fewer disturbances, and study work can be
completed in the less time.


5.3 Sample location

I am choosing different areas of Ahmedabad city for the research to be carried

5.4 Sampling Method

Any organization whether big or small, private or public need different types
of information are to know its popularity. I have gathered secondary data and
primary data and collected information from the combination of these two
Secondary data:Secondary data consist of information that already exists
somewhere, having been collected for another purpose. I have
gathered secondary data from website of different operators,
different magazines, newspapers and libraries.
Primary data:I have taken great care while collecting primary data to answer that
it is relevant, accurate, current and unbiased. I have taken a sample
of 200 people. I have visited them personally to get data.

5.5 Sample Size:

Sample size is to be taken to make the study easy in a shorter Time, period in
less and effective timing two hundred questionnaires are to be taken for
gathering the Information from the population of the Ahmedabad. The sample
size taken in this study is 384 and the data are gathered through questionnaire.


5.6 Data collection

Data collection is one of the important tasks in research on the basis of
collected data analysis is done upon which Take effective decision. For
collecting the data various types of Instruments are used like, questionnaire,
telephone interview, Mail interview, here in this study we are using
Types of data used in data collection
Primary data
Preparing a Questionnaire is collecting the primary source of data & it
was collected by interviewing the investors. These are the data which
are not collected before by any of the competent person. This are the
data collected by the researcher himself for the study purpose
Secondary data
These are the data which already exist. For having the detailed study
about this topic, it is necessary to have some of the secondary
information, which is collected from the following:

Magazines & Journals.
Ebscohost, etc.

In this study I have used Questionnaire for the primary data collection
and for secondary data collection I have used internet, magazines, reference
books and articles which are necessary for my project completion

5.7 Data collection instrument


To come at the particular result we have to collect the data from the
Research Type

Quantitative Research

Research Design

Descriptive Single cross sectional Conclusive


Primary data source:

Primary Retailers in Ahmedabad city

Secondary Sources:

Reference Material, Books & e-Books, e-Magazine

& Newspapers, Websites

Data Collection Method

Survey Method, personal visit, E- mail,



Sampling Method

Convenient non probability sampling

Sampling location


Sample size


Data Collection Instrument

Structured Questionnaire

respondents through various ways. In this report work I have used the
questionnaire to collect the data from the respondents.

Table: - Table shows the summary of Research Methodology


Objective behind the questionnaire:

Indentify the factors that affect the choice of format viz. organized/Unorganized
The perception and attitude towards both formats.
The type of goods the customers prefer to purchase from each format.
Findings that help unorganized and unorganized retail gain its key strength and



We are pursuing MBA at SRMS CET BAREILLY,

affiliated with UTTAR

PRADESH TECHNICAL UNIVERSITY. As a part of our comprehensive project Study, we

have prepared a brief questionnaire. We aresolicit your help for the same. We assure you that
the information provided by you will be used for academic purposes only and will not be
divulged to anybody.
Thanking you for your valuable time.


A Questionnaire on Study on changing consumer preference towards organized

retailing from un-organized retailing to Ahmedabad City

1. Are you a localite (based out of Ahmedabad) or are you from other place and
working here?

]Based in Ahmedabad

[ ]From other place

2. Do you prefer to Organized or Unorganized kirana shops for your purchase?

[ ]Organized Retail

]Unorganized Retail

3. How did you make your most recent purchase?

[ ] Online
[ ] By phone
[ ] By mail/catalogue
[ ] In-person/in-store
[ ]Through a dealer


]Depends/Not Fixed

[ ] Other (please specify).


How would you rate organized retailing in term of?


Very good




Courtesy and Service:

Store Cleanliness:
Selection and Variety:
Produce Quality/Freshness:
Meat Quality/Freshness:
Dairy Quality/Freshness:
Bakery Quality/Freshness:
Regular Prices:
5. If you organized Retail, Which shop do you prefer?
[ ]D-Mart

[ ]Big Bazar

[ ]Food Bazar

[ ]Spinach

[ ]Reliance Fresh

[ ] Star Bazar

[ ] Apna Bazar

[ ]Le Marche


[ ] Shoprite

[ ] Subhiksha


[ ] Foodland Garments

[ ]Shoppers Stop

[ ] Lifestyle

[ ] Globus

[ ]Hyper city

[ ] National Handloom

[ ]other

6. What do you shop, how often from where?

[Organized Retail: - o.r. Unorganized Retail: - U.R.]




7. Why do you prefer to go for Organized Retail formats?




[ ] Price is less

[ ] Near house

[]Everything at one place

[ ] Good Service

[ ]Good Quality

[ ]Ambience

[ ]Long Relationship

[ ]Good Offers

[ ] Self Service

[ ]Large Variety

[ ]Faster(take less time)


8. Kindly rate the below of an organized retail and unorganized retail based upon
your preference?
Organized Retail
Un Organized Retail
1 2 3 4 5
Everything at one place
Home Delivery
9. What is your gender?
[ ]Male
[ ]Female
10. What is your age?

] 18 as under
] 19-35
] 36-50
] 50 or more

11. What is your annual household income?


]Under 25000 pm.

]100000 or More


12. Kindly tell any other experience or factors you feel makes your Organized Retail
to Un Organized Retail

13. Do you plan to continue to buy organized/unorganized retail?

[ ] Yes

[ ] No






iDholakia, R. R. (1999). Going shopping: key determinants of shopping behaviour and motivations.

InternationalJournal of Retail and Distribution Management Bradford, 27, 154165.

iiSinha, P. K. and Banerjee, A. (2004). Store choice behaviour in an evolving market. International

Journal of Retail & Distribution Management, 32(10), 482- 494.

iiiBackstrom, K & Johansson, U (2006). Creating and consuming experiences in retail store

environments: Comparing retailer and consumer perspectives. Journal of Retailing and Consumer
Services, 13, 417430.
ivTerblanche, N. S. and Boshoff, C. (2006). The relationship between a satisfactory in-store

shopping experience and retailer loyalty. South African Journal of Business Management, 37(2), 3343.
vKalhan, A. (2007). Impact of Malls on Small Shops and Hawkers. Economic Political Weekly, 6,


P. (2008). Would Kiranas in Urban India Survive the Modern Trade Onslaught?

Insight from Efficiency Perspective. Advances in ConsumerResearch, 8(3), 44-67.

viiDas, G. & Kumar, R. V. (2009). Impact of Sales Promotion on Buyers Behaviour: An Empirical

Study of Indian Retail Customers. Global Marketing Journal, 3(1), 11-24.

viiiGoswami, P., Mridula, S. Mishra, (2009). Would Indian consumers move from kirana stores to

organized retailers when shopping for groceries? Asia Pacific Journal of Marketing and Logistics,
21(1), 127 143.
ixInside store (2009). Unplanned Buying at Traditional Retail in India. A Research Report Insight

in store, Research report USA.

xMittal, K. C., Arora, M. and Parashar, A. (2011). An Empirical Study on factors affecting

consumer preferences of shopping at organized retail stores in Punjab. KAIM journal of

management and research, 3(2), 38-40.
xiSivaraman. P. (2010). The future of unorganized retailing in Kanyakumari district. Asian Journal

of Management Research, 2(1), 434 442.

xiiKumar, K. S. (2011). A study on the strategies of unorganized retailers with reference to

consumer durables. International Journal of Business and Management Tomorrow, 1(1), 1-13
xiiiKushwaha, S. and Gupta, M. K. (2011). Customer perception in Indian retail industry: A

comparative study of organized and unorganized retail industry. Research Journal of Economics
and Business studies, 1(1), 61-73.