PROJECT ON

RETAIL INDUSTRY IN GLOBAL ENVIRONMENT
(WITH REFERENCE TO RETAIL OUTLET IN THE MARKET)

PROJECT SUBMITTED TO ANNAMALAI UNIVERSITY, IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION IN APPLIED MANAGEMENT By

Name: - Amit Kumar Sharma

DIRECTORATE OF DISTANCE EDUCATION ANNAMALAI NAGAR
2008

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DECLARATION

I hereby declare that the project entitled “RETAIL INDUSTRY IN GLOBAL ENVIRONMENT” submitted for the Degree of Master of Business Administration in Applied Management is my original work and the project has not formed the basis for the award of any degree, diploma, associate ship, fellowship or similar other titles. It has not been submitted to any other

university or Institution for the award of any degree or diploma.

Place: Date:

Name: Amit Kumar Sharma Enrolment No.:

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ACKNOWLEDGEMENT

It is with real pleasure that, I record my indebtedness to my academic Guide, Mr. Sunil K. Singh for his counsel and guidance during the preparation of this project. I am grateful to Centre Head Mrs. Tultuli Gupta. I wish to record my sincere and special thanks to Mr. Rakesh Sharma, Mr. Vikram Pawar and Mr. Deepak Sharma. My thanks are due to Mr. Manish Goyal and Mr. Bharat Kuldeep to give me great and valuable support.

Place Date:

Name: Amit Kumar Sharma Enrolment No:

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CERTIFICATE

Certified that the project is a work done by Mr. Amit K. Sharma during the period of his study under my guidance, and that the project has not previously formed the basis for the award of any degree, diploma, associates hip, fellowship or similar other titles and that it is an independent work done by his .

Place: Date:

Name: Sunil K. Singh The NIS Academy,

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5 .6 Methodology 40-42 43-44 Page No.2 Objectives and Role of Retail Industry 1.TABLE OF CONTENT Chapter Content Page No.4 Hypothesis Past/ Present/ Future of Industry Impact of Retail Industry in India 28-39 28-35 36-39 1.1 Retail Industry 01-44 02-19 02-05 06-11 12-13 14-16 17-19      What is Retail Industry? Structure of Retail Industry Evolution of Retailing Indian Scenario of Retail Industry Retail Worldwide scenario 1.3 Review of Literature 20 21-27 21-26 27     Major / Minor Challenges in Industry Example of Some Published Issue‟s 1. Acknowledgement List of Tables List of Diagrams II VI VII (1) Introduction 1.5 Limitations of the Study 1.

  (2) Source of Data Other Source 43 44 Significance of the study 2.2 Contribution of „FDI‟ In Retailing 2.2 Major Player of Retail Industry 49-69 50-53 54-69 (4) (5) Finding & Conclusion Bibliography 70-73 74-76 Page No.1 Opportunities of the Western Retailers in India 2.3 Benefits To The Indian Consumer 45-48 46 47-48 48 (3) Research and Analysis 3.1 Latest Trends in Retail Sector 3. 6 .

Title of the Table Page No.Table No.1. 1.3. 7 . 1.2.4. Growth of Retail Industry Continuation of GDP World Organization Trade Comparison of Retail Industry World-Wide Retail 08 14 18 29 66 Page No. 1. 1. 3.1.

10 1.8. 1. Title of the Diagram Page No.2 3.1 3.2.4 Indian Retail Market Map of Income Classes Organized Retail Market Growing Format in India Retailing Map in India Journey of Organized Retail Total Retail Sales 2007 US Retailing Format Penetration of Retail Challenges in Retail Market Retail Challenge Retail Analysis Retail Market Retail Segment Retail Touches Economy 03 05 06 10 11 13 16 18 19 21 25 51 52 53 73 Page No.11 3.5.1. 8 .9 1.Table No. 1. 1.6. 1. 1. 1.3. 1. 1.7. 1.3 3.4.

9 .Chapter (1) Page No.

Retail sector is one of India's fastest growing sectors with a 5 per cent compounded annual growth rate. Retail is India's largest industry. Since 2001. It is expected that retail in India could be worth US$ 175-200 billion by 2016. Driven by changing lifestyles. 49 global Page No. strong income growth and favorable demographic patterns. It accounts for over 10 per cent of the India's GDP and around eight per cent of the employment. It does this by organizing their availability on a relatively large scale and supplying them to customers on a relatively small scale. 10 .1  RETAIL INDUSTRY The word "Retail" originates from a French-Italian word. Indian retail is expected to grow 25 per cent annually.Part-1. Retailer is a Person or Agent or Agency or Company or Organization who is instrumental in reaching the Goods or Merchandise or Services to the End User or Ultimate Consumer. Emerging markets such as India and China are the final frontier for retail taking the focus away from saturated Western markets. Retailing is the set of activities that markets products or services to final consumers for their own personal or household use. India's huge middle class base and its untapped retail industry are key attractions for global retail giants planning to enter newer markets. Retailersomeone who cuts off or sheds a small piece from something.

but at the same time. Existing retail space in 160 malls is nearly 32mn sq ft 1. presenting additional 50mn sq ft of retail space will be ready in next two years. Only three percent of Indian retail is organized. 11 .retailers entered 90 new markets. extending more space of about 12mn sq ft to it. nearly 100. 17 retailers left markets in 2005. A huge number of shopping malls. Nearly 60 Page No. Retailers of multiple brands can operate through a franchise or a cash-and-carry wholesale model. have come up in the recent past. As per the estimation 200 malls. retail space. generating 20mn sq ft. The Indian retail industry in valued at about $300 billion and is expected to grow to $427 billion in 2010 and $637 billion in 2015.1 Indian Retail Market The analysts foresee bright future of the retail sector. witnessing a strong development pace of five percent per year as per latest survey by Price Waterhouse Coopers. The Indian retail environment has attained $ 210bn quiche.

Tesco. FCUK. The branded food industry is trying to enter the India retail industry and convert Indian consumers to branded food. Page No. ZARA.branded items. Trussardi. Since at present 60% of the Indian grocery basket consists of non. Indian retailers preferred means of expansion is to expand to other regions and to increase the number of their outlets in a city. Fendi. Gap. ESPRIT. Mother Care. Mango and many other global marked their presence in India by implementing licensing and franchisee agreements. lKEA. as a result a great demand for real estate is being created. in a move to make additional 50mn sq ft of retail space. It is expected that by 2010. In the Indian retailing industry. India retail industry is expanding itself most aggressively. to enter Indian retail market. awaiting the green signal from Govt. However. India may have 600 new shopping centers. food is the most dominating sector and is growing at a rate of 9% annually. Chanel.malls are on the verge of completion and may be operational by the end of current financial year. GUESS. Carrefour. The global retailers on the line of control. NEXT. the current scenario has encouraged Indian players to speed up retail expansion and fresh retail ventures. DKNY and Debenhams have made plans to march in the Indian market. will be completed within the next two-years. 12 . The global retail giants like Wal-Mart. Versace. KMart/SEARS. A forecasted number of nearly 200 malls.

Also. Pantaloons Tanishq. Reliance. Trent is on the edge to take both its brands 'Star India Bazaar' and 'Westside' to new cities.Companies like Shoppers Stop. So finally.2 Map of Income Classes Page No. Westside. Wal-Marts or Safeway does ultimately enter in the country. Shoppers' Stops. 1. Akbarallys' and Tanishq already have planned to invest over Rs 5. RIL is poised to emerge as the single largest player in this sector. Reliance Industries Ltd (RIL) is substantially getting ready to enter in field of retailing. meanwhile Shoppers' Stop has recently geared up for expansion of present ones and to add 11 new stores including two hypermarkets. Tosco‟s. Pantaloon has planned to add eight 'Big Bazaar' malls within the next 6 to 8 months. 13 . Trent. Crossroads. After partition. Lifestyle. Pantaloons and West sides in coming years have will face stiff competition. On the other hand.000cr.

many companies started pouring in the retail industry in India like Bombay Dyeing. 14 . STRUCTURE OF RETAIL INDUSTRY The retail industry continued in India in the form of Kiranas till 1980. Grasim etc. the Indian retail industry has finally begun to move towards modernization.3 Organized Retail Market Have had localized operations. modernization is the catch phrase and the key to understanding retail in the next decade. Soon.  Organized Retail Sector After 50 years of unorganized retailing and fragmented Kiranas stores. following the modernization of the retail sector in India. New geographies help them sustain top line growth in Addition to Page No. This localized nature of the industry is Changing as retailers face lower growth rates and threatened profitability in home Markets. Traditionally retailers 2006-07 1. Today. As has been mentioned earlier the retail sector in India can be widely split into the organized and the unorganized sector. Systematization and consolidation.

Organized retail formats prevalent globally Supermarkets: Self-service 4000-20000 sq ft stores with shopping carts typically focused on regular groceries. household goods and personal care Hypermarkets: Huge stores over 40000 sq ft situated outside the town with ample parking space aimed for bulk purchases stocking electronics. 15 . furniture and clothing. More and more players are entering the retail business in India to introduce new formats like malls. and furnishing stores. Carrefour is the global major in this format. supermarkets. chemist shops. discount stores. Makro and Sam's Club are leading players in this format. Page No. department stores and even changing the traditional looks of bookstores.enabling global sourcing and encasing on global advantages of getting the best products at optimum prices. They have cross-country chain operations with centralized sourcing and a hub-and-spoke distribution. Mass merchandisers: Large destination stores that sell everything at competitive prices. There has been a boom in retail trade in India owing to a gradual increase in the disposable incomes of the middle class households. Service and Infrastructure sectors. as a result of good performance of IT.

Page No. This sector constitutes about 98% of the total retail trade. hence this form of retailing is widely seen in those areas and of course to some parts of the urban. but government can not neglect the interests of small players. Aldi is the world leader in this format. Convenience Stores: Small stor es located at convenient points like petrol stations working round the clock.Discounters: Aimed at bargain buyers offering less choice but deep discount on bulk sourcing deals through controlled inventory. 16 .1 Growth of Retail Industry  Unorganized Retail Sector The unorganized retail sector basically includes the local Kiranas. 1. There is a lot of hue and cry in the sector for opening of sector for direct investment from the foreign players. the vendors on the pavement etc. As 70% of the employment is generated in Agriculture sector. hand cart. One of main reason of not opening this sector to FDI is it may shrink the employment in the unorganized sector and expand that in the organized.

the Mumbai books retailer Crossword.000 sq ft and above. RPG's Music World and the Times Group's music chain Planet M. Among these. ft) across India and even has its own in store brand for clothes called Stop. in proximity to urban outskirts. Pyramid.RETAILING FORMATS IN INDIA  Malls: The largest form of organized retailing today. Page No.  Discount Stores: As the name suggests. the biggest success is K Raheja's Shoppers Stop. are focusing on specific market segments and have established themselves strongly in their sectors. offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season.000 sq. Ranges from 60. all under a common roof. 17 . Examples include Shoppers Stop.00. The product category can range from a variety of perishable/ non perishable goods  Department Stores: Departmental Stores are expected to take over the apparel business from exclusive brand showrooms.000 sq ft to 7. which started in Mumbai and now has more than seven large stores (over 30. Located mainly in metro cities. service and entertainment. and Pantaloon  Specialty Stores: Chains such as the Bangalore based Kids Kemp. discount stores or factory outlets. They lend an ideal shopping experience with an amalgamation of product.

000 sq.  Mob's : Multi Brand outlets. seven days a week. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day. having a strong focus on food & grocery and personal sales. 1.000 sq ft.000 sq ft and large supermarkets ranging from of 3. Super Markets can further be classified in to mini supermarkets typically 1.  Convenience Stores: These are relatively small stores 400-2.000 sq ft to 2.4 Growing Format in India Page No. These are located in or near residential high streets. also known as Category Killers.500 sq ft to 5. 18 . These usually do well in busy market places and Metros. Prices are slightly higher due to the convenience premium. offer several brands across a single product category. catering to varied shopper needs are termed as Supermarkets. Hyper marts/Supermarkets: Large self service outlets. These stores today contribute to 30% of all food & grocery organized retail sales.

RETAILING MAP IN INDIA 1.5 Retailing Map Page No. 19 .

one of the largest sectors in the global economy. especially in the urban areas. Second. the corner grocery store was the only choice available to the consumer. the modern retailing trend. this trend is already visible with the emergence of stores with an essentially `value for money' image. 20 . the boom in retailing has been confined primarily to the urban markets in the country. First. For a long time. Even there. The traditional food and grocery segment has seen the emergence of supermarkets/grocery chains. probably not looked at the other markets as seriously. EVOLUTION OF RETAILING Retailing. have tried to redefine themselves. The traditional grocers. This is slowly giving way to international formats of retailing. despite its cost-effectiveness. retail stores would have to identify with different lifestyles. convenience stores and fast-food chains. large chunks are yet to feel the impact of organized retailing. In order to appeal to all classes of the society. has come to be identified with lifestyles. In a sense. the modern retailer is yet to feel the saturation' effect in the urban market and has. by introducing self-service formats as well as value-added services such as credit and home delivery. There are two primary reasons for this. is going through a transition phase in India. therefore. However. The attractiveness of the other stores actually appeals to the existing affluent class as Page No.

an overwhelming proportion of the Rs. only a Rs. It was only in the year 2000 that the economists put a figure to it: Rs. 21 .000 crore which is expected develop to around Rs. 400. Page No. Retailing in India is unorganized with poor supply chain management perspective.000 crore segment of the market is organized.000 crore by the year 2005 – an annual increase of 20 per cent. 20. Hence. 1. 400. one can assume that the retailing revolution is emerging along the lines of the economic evolution of society.Well as those who aspire to be part of this class. According to a recent survey by some of the retail consulting bodies. In fact. As much as 96 per cent of the 5 million-plus outlets are smaller than 500 square feet area. India's per capita retailing space is thus the lowest in the world. This means that India per capita retailing space is about 2 square feet in comparison to 16 square feet in the United States.6 Journey of Organized Retail 800.000 crore retail markets are UNORGANISED.

7 percent. retailing in India is superior to those of its contenders. 22 .900 crore is the largest of the different types of retail industries present in India. This has led to the generation of Page No. 12.000 crore($270 billion) and the annual growth rate is 5.43. Retail market for food and grocery with a worth of Rs.the rise in the per capita income in the last few years has been magnificent.00. Rise in the purchasing power of Indians. There are many factors that have stimulated the rise of the shopping centers and multiplex-malls in a jiffy. Some of them can be listed as follows: 1. INDIAN SCENARIO OF RETAIL INDUSTRY The present value of the Indian retail market is estimated by the India Retail Report to be around Rs. Retail sector is a sunrise industry in India and the prospect for growth is simply huge. The contribution of retail sector to GDP has been manifested below: Country India USA China Brazil Retail Sector's share in GDP (in %) 10 10 8 6 1.2 Continuation to GDP As can be clearly seen. 7. Furthermore around 15 million retail outlets help India win the crown of having the highest retail outlet density in the world.

insatiable wants of the upper and middle class. The retail industry is the second largest employer in India. Use of credit. a major concern among policy makers. The government must also make an attempt to ameliorate the situation as political instability and infrastructure namely power and roads are the major roadblocks in the path of smooth functioning of the market. This is led to shift of the consumer base towards supermarkets and make the payments in the form of credit. Only 4. 2. Chidambaram's recent statement “salaries ought not to be legislated” is a welcome move as most of the organized retail is in private hands. People and kids prefer to shop in an air conditioned.a visit to a retail store appears to be more soothing for the generation-Y.000 crore ($12. Favorable to farmers.4 billion). The demand of new as well as second hand durables has risen throughout the country thus providing the incentive for taking up retailing. The major and minor players desperately need to work hard in this direction so that next time the figures look more decent.6% of the total retail trade is into organized sector. Comfortable Atmosphere. This is a new revolution in the agricultural sector in India and will go a long way in amending the condition of agriculture.55.retailing has helped in removing the middlemen and has thus enhanced the remuneration to farmers. It currently employs about 7 percent of the total labor force in India. Finance Minister P. 3. Page No. 23 . 4.a typical Indian is most conversant with using credit cards than carrying money. It generates about Rs.

000 cores * Organized market: Rs.7 Total Retail Sales 2007 Page No.000 sq. ft.000 shoppers walk through their doors every week * 47 global fortune companies & 25 of Asia's top 200 companies are retailers * Biggest player in India is Pantaloon Retail India Limited * Growth in organized retailing on par with expectations and projections of the last 5 Years: on course to touch Rs. 000 cores * 5X growth in organized retailing between 2000-2005 * Over 4.PRESENT INDIAN SCENARIO * Unorganized market: Rs. 583.000.5.000 sq. 24 .000 new modern Outlets in the last 3 years * Over 5. 35. of mall space under development * the top 3 modern retailers control over 750.000 corers (US$ 7 Billion) or more by 2005-06 1. of retail space * Over 400. ft.

Japan. The Chinese retail market is expected to reach new highs as the population of strong middle class is expected to double by 2020 and mergers and acquisitions among retailers are3 going in great guns. Beijing Gome Electric. Wuhan Zhongbai Group. The registered sales of department stores grew by 25. and China Paradise Electronics Retail.the total sales from retail market in China reached US$755 billion in 2005. 25 . The year 2002 to 2004 the annual sales per store increased by 3. Carrefour. The WTO restrictions are also expected to have a favorable impact on its retail sector.738 specialty superstores.total annual sales for the Japanese retail industry for 2003 amounted to JPY 133. The organized retail sector in Japan couldn't perform at its full efficiency because of collapse of the 'bubble economy' in the early 90s Page No. However organized retailing in China accounts for only 20% of it.2 million retail establishments in June 2004 and there were 42.5% in 2005. Japan had 1. Wal-Mart Stores. Key Players Analyzed This section covers the key facts about players currently operating in the China retail industry including Shanghai Bailian Group.273 billion. RETAIL : WORLDWIDE SCENARIO China.5% of the total market. The growth was mainly driven by the grocery superstores but the number of superstores specializing in clothes gradually came down.7% and that of convenience stores grew by 36. Also the fragmentation of China's retail market is so high that top 100 retailers make up for only 10.8%.

and Gamesa. CEPS Group.3 World Trade Organization United State. Key Findings § Spain is a net energy importer.S.S. Repsol YPF.5%) & Natural Gas (19. Fossil fuels are the major sources for energy in Spain especially Oil (49.Spain Energy Industry Spain energy consumption is estimated to have reached 165 Million Tons of Oil Equivalent in 2006. with imports accounting for 99% of its total annual oil and natural gas consumption and 50% of its coal consumption key players in Spain energy such as Gas Natural Group. renewable sources are expected to grow at rapid pace.Retail is the second-largest industry in the U. 26 . by number of businesses and number of employees. 1. and clean energy sources.A. With the Spanish objective of energy security & diversity.9%). Endesa S. Retail sales in the U. (total retail sales 1.8 US Retailing Format Page No.Spain.

Brazil.9 Penetration of Retail Page No. A process of consolidation of the retail industry has been underway but overall.494 (Approx). 1 Brazil Real (BRL) = US$ 0. The sales in the industry have been growing strongly since 2003 and are expected to continue at this momentum only over the next few years as constantly declining inflation rate allows for continued expansion of real incomes (increasing demand for non durable consumer goods) and credit conditions ease (sustaining demand for durable goods).Emerging as one of the world's largest retail markets. the market remains relatively fragmented.include the categories of gasoline.49 trillion (Plunkett Research estimate). to $4. All the market values have been converted to US$ at May 2007 exchange rate where. and food service) were up about 3. The top five supermarket chains account for approximately 40% of total sales. The 2007 growth was driven partly by higher gasoline costs as well as by deep price discounting during the Christmas season by mass merchandisers and year-long discounting by automobile dealers. indicating substantial scope for the larger players to grow their market share in future. automobiles. 27 . 1..8% in 2007.

This sector contributes 10% of India's GDP and the current growth rate is 8. CEOs. The present size of the organized retailing sector is approximately 3% and is expected to grow to 2530% by the year 2010. There is no denying the fact that most of the developed economies are very much relying on their retail sector as a locomotive of growth. as both the present players and new entrants are gearing up to explore the market. The sector is set for a revolution. 1500 supermarkets and 325 departmental stores currently under construction. There are about 300 new malls. due to which the present 12 million mom-and-pop shops and Kiranas stores fear losing their business. It is the second largest industry in the United States of America in terms of numbers of employees and establishments. the largest retailer in the United States is also the largest employer in the United States with annual sales over $ 284 Billion.2  OBJECTIVES & ROLE OF RETAIL INDUSTRY Retail is clearly the sector that is poised to show the highest growth in the next five years. Many players are coming up with huge investments.Part 1.5%. 28 . Wal-Mart. and others are using consumer spending and consumer confidence data originating from the retail sector as an indicator to gauge the status of the economy Page No. Most predictions say that the sector might reach to US$ 400-600 billion by the year 2010 The retail sector has played a phenomenal role throughout the world in increasing productivity of consumer goods and services. Analysts.

It is up to us retailers to evolve with consumers.3  CHALLENGES OF RETAIL INDUSTRY The big challenge for the Indian retailing industry is the heterogeneity of the market. My vision is to capture where this new. 29 . predict where and what they will spend on.Part 1. young and emergent India is going to spend and capture as close to 100% of their shopping. Consumer mindset and behavior is changing in these cities. So far. At Panta-loon. internet and mobile communication available in smaller cities. we touch 52% of the customer‟s wallet. people are increasingly exposed to how the „West‟ lives. 1.10 Challenges in Retail Market maybe. However. Tier-II and tier-III cities present an enormous growth potential over the next five years and are the future of modern retail in India Page No. A growing base of affluent. through our delivery formats. modern-format retail has scaled up its presence in the metros and a few cities. be there and take the highest share of their wallet and use this last leg of the economic chain to build India. With satellite television. upwardly mobile consumers have similar needs and desires as their urban counterparts and they are looking for instant gratification. the future will see tier-II and. even tier-III cities attract more retail outlets.

But unfortunately the foible taste bias for 'wet market' (i. The parallel operation of convenience stores. India has a high density retail structure of 1 retail outlet per 90 people and is the 9th largest retail market in the world. So it is obvious that this is the most preferred section of retailers. certain loopholes in one of the forms of marketing can get communicated to other forms also.According to TATA Strategic Management Group. 2. fresh food available through hawkers) has marred this prospect also. According to researches. 41 percent of total consumption expenditure goes to the segment of food and groceries and it accounts for 77 percent of total retail sales. But the structure of the retail industry in India is in utter jumble. Therefore supply chain management.Another bemusement is the category of items to be offered. mobiles and computers can mitigate the losses. supermarkets. According to the 'Wheel of Retailing Theory'.MAJOR CHALLENGES 1. hypermarkets and specialty stores in the economy is bewildering. What to sell. if any from food marketing and also broaden the reach to consumers. 30 . Amalgamation or Confusion. Page No. storage of fresh perishable foods and persuading the customers that the food is inexpensive despite being fresh are genuine challenges to the newcomers.e. furniture‟s. Diversifying the product base to consumer products such as readymade garments.

good behavior etc. This problem is difficult to deal with as it demands a change in long-formed mindset.the concern for insufficient manpower in the industry has been in news for the last few months. MINOR CHALLENGES 1. Human resource crunch. Information Technology. This fear is somehow unfounded. The retail industry according to recent reports is growing at a rate of 100 percent. Nostalgia. Kishore Biyani's Future Group i. Besides. Organized retail outlets can overcome this problem by employing eligible local peoples who can interact in vernacular language and win the confidence of people. fair price.e. 31 .This is a major problem and India must act fast if it wishes to create a smooth field for organized retailing.Indian shopping habits are no different.3. They find no reason to go to a distant megaspore without any genuine reason.000 people and is planning Page No. the Big Bazaar chain of retail outlet alone provides employment to more than 18. it will generate easier payments option for customer and easier money movement for the CEOs of these highly diversified malls. 4. People tend to attach qualities like honesty. to shopkeepers with whom they have been dealing right from childhood. Digitization of services will make transfer of goods easy and an improvement in supply chain management will definitely play a significant role in attracting more consumers and less consumer grievances.

The fear is baseless because of the reasons mentioned above.000 by June 2008. Instead the limiting move will send wrong signals to the investors and will ward off investments when the states need it most. Page No. trade of stocks and building of relationships. a graduation will suffice. Allowing 51 percent retail FDI in single brand retailing is a welcome move in this direction.Some political parties want the government to amend laws and improve curbs so that the mega players can't openly decimate the unorganized retail sector. This is a conclusion based on a myopic outlook and must be amended for a long term strategy. Nowadays many institutes also provide post-HSC and post-graduate retail-specific courses. 32 . Since most of the openings are for front line shop people. The mega stores will no doubt provide employment to the less educated masses. It is expected that the government will create further opportunities for the organized retail to come up as home grown investment is always sweeter than foreign investment. Retailing mainly deals with hard-selling of space. If we add to this the foray by mega players like Reliance and Bharti-Walmart then the fear can surely turn into a misperception.to expand its employment base to 34. 2. Also taking business away especially from small food vendors is more easily said than done. Hindrances from government.

Right choice" Location is the most important ingredient for any business that relies on customers.OTHER CHALLENGES: (1) LOCATION: "Right Place. * Determine the type of desirable store location * Evaluate alternative specific store sites 2) MERCHANDISE: The primary goal of the most retailers is to sell the right kind of merchandise and nothing is more 1. 33 . When formulating decision about where to locate. and is typically the prime consideration in a customers store choice. Locations decisions are harder to change because retailers have to either make sustainable investments to buy and develop real estate or commit to long term lease with developers. Page No. Merchandising consists of activities involved in acquiring particular goods and services and making them available at a place. time and quantity that enable the retailer to reach its goals. the retailer must refer to the strategic plan: * Investigate alternative trading areas.11 Retail Challenge central to the strategic thrust of the retailing firm.

4) TARGET AUDIENCE: "Consumer the prime mover" "Consumer Pull". The cost of business operations is very high in India. with the influencing the retail industry to a great extent. however. It is one of the challenges that the Indian retailers are facing. 5) SCALE OF OPERATIONS: Scale of operations includes all the supply chain activities. the most important function for any retail organization. a variety of other factors also seem to fuel the retailing boom. 34 . as it decides what finally goes on shelf of the store. which are carried out in the business.Merchandising is perhaps. The importance of pricing decisions is growing because today's customers are looking for good value when they buy merchandise and services. The purchasing power of the customers has increased to a great extent. Page No. Price is the easiest and quickest variable to change. 3) PRICING: Pricing is a crucial strategic variable due to its direct relationship with a firm's goal and its interaction with other retailing elements. seems to be the most important driving factor behind the sustenance of the industry.

The Times of India Page No.FICCI  India‟s retail industry.Indian Council of Research in International Economic Relations (ICRIER)  Modern Retailing Comprehensive policy vital.The Hindu  Retail boom triggers ancillary industry growth. 35 . SOME PUBLISHED ISSUE OF RETAIL INDUSTRY  The retail industry is expected to grow into a USD 427 billion industry by 2010. has already scripted success stories fit to be the subject of a Bollywood film-Business Standard  The impact of organized retailers that have seen swarming of malls lately. on the “mom-n-pop stores” in 20 Indian cities. which is in the middle of rapid growth.

The journey of retailing in India has been riveting and the future promises further growth. Be it our daily groceries or fashion accessories and everything in between. The evolution was being witnessed at various levels and the people of India were learning to play different roles as businessmen and consumers.Part 1.4  PAST/ PRESENT/ FUTURE OF RETAIL INDUSTRY Before the decade of eighties. present and future trends of Indian Retail Market. India in the 21st century emerges as a highly potential retail market. is a very important aspect of every city. It is widely accepted that the retail industry has undergone a drastic change in last five years and there is yet more to come. Though organized retailing industry began much earlier in the developed nations. Let us compare the image of Indian retailing in 2004-05 to that of its status in 2007-08 in the following table: Page No. However with its vast expanse and young population. India with hundreds of towns and cities was a nation striving for development. Without a well organized retail industry we would not have our necessities and luxuries fulfilled. India had not actively participated. retail industry brings us the blissful experience of shopping. 36 . Retail-which literally means to put on the market. Here is a complete picture deciphering the past.

Magnification of the Indian Retail Industry
Yardstick Value of retail sales Annual growth rate Value of organized market Share of organized market in the sector Forecasts (after 5 years) about Over Rs. 1,00,000 size of organized retail market Forecasts about growth rate of organized retail market 1.4 Comparison of Retail Industry The above table clearly shows that the retail market as well as the mindset required for it has experienced a thorough revisal in the last three years. This is just the beginning and Indians are sanguine that the sector will see rosy days in the future. This confidence has helped India acquire the No.1 position among 30 most attractive retailing destinations in the world according to the Global Retail Development Index of 2005 (by AT Kearney, India). Among emerging markets, India holds the second position after China in the list of most favored retail destinations crore Around 30% Around 40% Rs. 2,00,000 crore Situation in 04-05 Situation in 07-08

Rs. 10,20,000 crore Rs 12,00,000 crore 5% Rs 35,000 crore 3.4% 5.7% Rs 55,000 crore 4.6%

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Past – Retail Industry in India
Before the decade of eighties, India with hundreds of towns and cities was a nation striving for development. The evolution was being witnessed at various levels and the people of the nation were learning to play different roles as businessmen and consumers. The foundation for a strong economy were being laid, youth were beckoning new awareness in all spheres. And this brought in an opportunity for retail industry to flourish. First in the metros and major cities later to impact sub urban and rural market as well. Retailing in India at this stage was completely unorganized and it thrived as separate entities operated by small and medium entrepreneurs in their own territories. There was lack of international exposure and only a few Indian companies explored the retail platform on a larger scale. From overseas only companies like Levi's, Pepe, Marks and Spencer etc. had entered targeting upper middle and rich classes of Indians. However as more than 50 % population was formed by lower and lower middle class people, the market was not completely captured. This was later realized by brands like Big Bazaar and Pantaloons who made their products and services accessible to all classes of people and today the success of these brands proves the potential of Indian retail market. A great shift that ushered in the Indian Retail Revolution was the eruption of Malls across all regional markets. Now at its peak, the mall culture actually brought in the organized format for Retailing in India which was absent

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earlier.To your surprise there was not a single mall in India a decade before and just a few years ago only a handful of them were striving, today there are more than 50 malls across different cities and 2 years from now around 500 malls are predicted to come up.

Present – Retail Industry in India
At present the Retail industry in India is accelerating. Though India is still not at an equal pace with other Asian counterparts, Indian is geared to become a major player in the Retail Market. The fact that most of the developed nations are saturated and the developing ones still not prepared, India secures a great position in the international market. Also with a highly diverse demography, India provides immense scope for companies brining in different products targeting different consumers. According to the Global Retail Development Index, India is positioned as the foremost destination for Retail investment and business development. The factor that is presently playing a significant role here is the fact that a large section of Indian population is in the age group of 20-34 with a considerably high purchasing power; this has caused the increase in the demand in the urban market resulting in consistent growth in the Retail business. And though the metros and other tier 1 cities continue to sustain Retail growth, the buzz has now shifted from these great cities to lesser known ones. As the spending power is no longer limited to metros, every tier 2 city in the

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country has good market for almost every product or service. Due to this, tier 2 cities like Chandigarh, Coimbatore, Pune, Kolkatta, Ahmedabad, Baroda, Hyderabad, Cochin, Nagpur, Indore, Trivandrum etc. provide a good platform for a brand to enter Indian market. However there are a few precautions for every brand that explores Indian market. As Indian consumers are very curious and have a broad perspective, they respond well to a new product or concept and there are very fair chances of a brand surviving well, but every Indian consumer be it an urbanite or a small town dweller needs a feeling of value for money. Although labeled as tight fisted, Indian consumers are great spenders once they realize that they are getting value for their money. Also new product /service concepts from the western world are better adopted first by the urban Indians, the smaller markets respond well to the need based retailing rather than luxury concepts. As the Indian retailing is getting more and more organized various retail formats are emerging to capture the potential of the market. * Mega Malls * Multiplexes * Large and small supermarkets * Hypermarkets * Departmental stores are a few formats which flourishing in the both big and small regional markets.

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Growth in India Real estate sector is also complementing the Retail sector and thus it becomes a strong feature for the future trend. The Retail sector in the small towns and cities will increase by 50 to 60 % pertaining to easy and inexpensive availability of land and demand among consumers. As the market becomes more and more organized the Indian retail industry will gain greater worth. Catering to these consumers will bring tremendous business to brands from every sector. However with growing real estate sector space constraint will not be there to meet this demand. 41 . With this the organized retail which Page No. Future – Retail Industry in India According to a study the size of the Indian Retail market is currently estimated at Rs. 704 crores which accounts for a meager 3 % of the total retail market. the future of the Indian Retailing industry lies in the rural regions. Over a period of next 4 years there will be a retail space demand of 40 million sq. However as the market expands companies entering India will have to be more cautious with their strategic plans. ft. The growth in the retail sector is also caused by the development of retail specific properties like malls and multiplexes. According to a report.As the major cities have made the present retail scenario pleasant. from the year 2003 to 2008 the retail sales are growing at a rate of 8.3% per annum.

consumers are now aware of the global products and it helps brands to build themselves faster in a new region However despite these factors contributing to the growth of Indian retail Industry.  The infrastructure is improving greatly in all regions is benefiting the market.  Another great factor is the internet revolution. which is allowing foreign brands to understand Indian consumers and influence them before entering the market. Factors that are playing a role in fuelling the bright future of the Indian Retail are as follows:  The income of an average Indian is increasing and thus there is a proportional increase in the purchasing power.currently has only 3% of the total market share will acquire 15-20 % of the market share by the year 2010. Foreign direct investment is not allowed in retail sector. 42 . Along Page No.  Indian population has learnt to become a good consumer and all national and international brands are benefiting with this new awareness. Due to the reach of media in the remotest of the markets. But Franchise agreements circumvent this problem.  Indian economy and its policies are also becoming more and more liberal making way for a wide range of companies to enter Indian market. there are a few challenges that the industry faces which need to be dealt with in order to realize the complete scope of growth in Indian market. which can be a concern for many brands.

with this regulations and local laws and real estate purchase restrictions bring up challenges. And with Good Planning. Page No. 43 . Timely Implementation and a media campaign that touches Indian consumers any brand can go far ahead in the Indian Retail Revolution.

several new models such as Trinethra. On an average a Page No. so the success of a food retailer depends on how best he understands and squeezes his supply chain. Owing to the success of Food world model of RPG group. The Experiment has reaped rich dividends and the group is now foraying into other Territories as well as. Subhiksha. Though there was traditional family owned retail Chains in South India such as Nilgiri‟s as early as 1905. This transition can be achieved to some extent through pricing. The trend in grocery retailing however. The other major factor is that of Convenience shopping which the supermarket has the edge over the traditionalKiranas Stores. 44 . Today the food retail sector in India is about Rupees Ten Lakh Crores (USD 200 billions) of which the organized food retail segment is about 1 per cent and increasing at a pace of over 20% year to year. IMPACT OF RETAIL INDUSTRY IN GLOBAL WORLD Organized retailing is spreading and making its presence felt in different parts of the Country. the roadside hawkers and Kiranas stores to supermarkets. Hyderabad and Bangalore markets. To be successful in food retailing in India essentially means to draw away shoppers from. has been slightly different with a Growth concentration in the South. the retail revolution happened With the RPG group starting the Food world chain of food retail outlets in South India With focus on Chennai. Margin Free and others have made their foray into this sector albeit at regional levels. preliminarily.

The current ban on foreign direct investment is lifted. This is the main reason as to why the successful retail chains in the Countries today operate at regional segments only and are not aiming at nation wide Presence. But that could be two-three years Away.supermarket stocks up to 5000 SKU‟s against few hundreds stocked at an average Kiranas stores. But the belief among top Retailer chains in the country is that the industry will see large investments coming once. In the organized retail industry. though not value. the gestation periods are long. India poses a complex situation for a retailer. In order to appeal to all classes of the society. Hence we may find more of Regional players and it would take enormously long time before nation wide successful Retail chains emerge. 45 . For example. as this is a Country where each State is a mini-Country by itself. and there is none or little Government support. retail Stores would have to identify with different lifestyles. Food and grocery retailing is a tough business in India with margins being very Low and consumers not dissatisfied with existing shops where they buy. at least for the time being. the next-door grocery shopkeeper is smart and delivers good customer service. institutional funding is Difficult. Page No. Though with excellent potential. The demography‟s of a region Vary quite distinctly from others.

a Chennai based discount chain. Giant.As of now. organized food and grocery retailing chains going national requires significant investments. names such as Haiko and Radhakrishna Food-land are Mumbai-centric. while Adani is Ahmedabad-centric. other big cities such as Delhi. 46 . while Chennai has about five organized food and grocery retail chains. Bangalore. To illustrate with examples. they could look at the other regions. Nilgiri‟s. Sabka Bazaar has a presence only in and around Delhi. Retailing within this sector is not just about the front-end. Industry topography in India is such that spreading presence across cities is a tough call. too wants to be the principal store of purchase for at least 40 per cent of all consumers living within Page No. all of which are more or less spread in the Southern region. The chain has no plans to venture beyond the Southern region just yet. Almost all food retail players have been regionspecific as far as geographical presence is concerned in the country. Current plans are to focus on the Southern markets and achieve saturation. The trend and mindset of the present retailer chains in India can be best understood by studying Food-World as an example. Varkey's and Subhiksha. Margin Free. The intention is that by 2005. As pointed out by many experts. the RPG Group's Food World. and Mumbai average only two-three such chains. which came in first in the food and grocery retailing sector. but involves complex supply chain and logistics issues as well. Subhiksha.

the way a basic grocery retailing model works is that the high set-up costs in terms of setting up buying/ distribution infrastructure is gradually amortized over a larger number of stores. the RPG group plans to take its new formats such as Giant Hypermarkets national over the next three years. To elaborate on the hurdles of going panIndian. This makes the point very clear that the strategy among most existing retail chains of various formats is to completely saturate the markets where they are already established players and then move on to virtually untouched areas where the challenge of sourcing resources and extending their supply chain model to best suit the size and expanse of the market would be a challenging task.500-750 meters of the store. fundamentally. should stabilize at around 2. that is. Meanwhile. Page No. or what in retail jargon is called retail administration costs. The back-end costs without distribution centre costs.5 per cent to 3 per cent of sales. 47 . but not the only one. Grocery is a large component of this format. within walking distance.

in Indian. Supply chain problems: As suppliers are not properly organized in the country.Part-1. the 23 largest cities. Thus. In India. branding was almost not-existent in convenience products until recently. the purchases are spread better over the month. Inadequate growth of brands: Inadequate growth of brands is another factor. Whereas in the west. in India. Today.5 There are many problems face by Retail industry in Indian Market. it does not suit the rural areas in a country like India. The scattered location of consumers has been the main deterrent to the rapid spread of the idea in the rural areas. organized retailing is confined to class A cities. Theirs perhaps has a correlation to patterns of payment of wages. the top 10 cities account for 94 per cent of all organized retailing in India. 48 . About 82 per cent of organized retailing comes form the top six cities and another 12 percent from the next four. the purchasing patterns of the Indian consumers differ form those of westerners. Source development also poses special problems. Purchasing patterns differ also because of the difference in the eating habits of people. this has naturally inhibited retailing through sophisticated chains. replenishment of stock poses problems for large chains. Purchases are by and large made in the first week of the month. Purchasing patterns not very conducive: Even in urban centers. Page No. They are following:The format does not suit rural India: While the format suits the urban areas.

Once the father grew old. That is why groups that have been in real estate and hotel businesses are more comfortable in branching off into retailing. It has big sales volumes and multiple locations. 49 . Real estate is an integral requirement of large scale chain store operation. And. it had just three showrooms. family businesses usually have a limitation in expansion. it remained rather small because of its family character. ) of Chennai. and because there were three sons engaged in the business. big chains have to operate in several cities. is an example. Real estate problems. a single store outfit. Fro other firms. now it is actually the largest consumer durable chain in the country. Yet another reason for the slow pick up of mega retailing idea in India is that all along retail enterprises have been family concerns. In recent years. as it has shed its family business character. During the three decades from 1965 to 1995. they don not command property in prime locations. the sons started managing the business. Real estate thus becomes crucial. managed by the father and assisted by his three sons. real estate development are a problem. the enterprise went in for three showrooms. Page No. retailing enterprises have limitation in expansion. it has emerged as a major chain. For the past several years. Also. however. One needs a large number of stores in each city to achieve optimum scale. It was a family concern and remained for a long time. The Vivek‟s (Formerly Vivek‟s & Co.Being family businesses. Example of Vivek‟s.

power shortages and insufficient storage spaces  The retail industry loses to the tune of US$120 to US$130 million every year in frauds .  A very high stamp duty on transfer of property affects the industry.  Inadequacies in infrastructure such as lack of high quality road networks.  Shortage of retail space in central and downtown locations also hinders the growth of retail industry.  Opposition to Foreign Direct Investment from small traders affects retail industry. Page No.  There is a shortage of quality real estate and infrastructure requirements in our country.Other Limitation of Retail Industry  The organized retail industry in India is faced with stiff competition from the unorganized sector.  Non residents are not allowed to own property except they are of Indian origin. shop lifting. vendor frauds or inacc urate supervision despite using standard and modern security features.thefts and employee pilferage. it consumes lot of time.  For settling property disputes. 50 .  Presence of strong Pro-tenancy laws makes it difficult to evict tenants and this is posing problems.  Land-use conversion is time consuming and becoming complex.

Primary Source and Secondary Sources.6  SOURCE OF DATA Data‟s are the useful information or any forms of document designed in a systematic and standardize manner which are used for some further proceedings. Some time the data are available readily in one form or the other and some time the data are collected afresh.the secondary data was collected through the following: Online Research material of the Various Institution/Outlets directly or indirectly involved with Retail Industry. 51 . Secondary Data used in External Source of Information Like internet.Part 1. magazine. Primary Dataactivities: the primary data was collected through the following Filled the Retail Industry related questionnaire to managers of a select group of companies And Paper Conversation Secondary Data. paper cutting Page No. One of the important tools for conducting marketing research is the availability of necessary and useful data. The sources of Data fall under two categories.

and through access to access to more than 3000 paid databases. Page No. government agencies. 52 . Judgmental Forecasting and Cause and Effect Analysis etc. and white papers. OTHER SOURCE  Information Sources Information has been sourced from namely.  Analysis Method The analysis methods include the following: Ratio Analysis. newspapers. trade journals. trade associations. industry portals. Historical Trend Analysis. monitoring industry news and developments. books. Linear Regression Analysis using software tools.

Chapter (2) Page No. 53 .

AT Kearney has constructed the Global Retail Development Index which has helped the western retailers to identify the countries in which investments could be made. Euroset. Opportunities in India have attracted the western retailers like Wal-Mart. It is highly possible that there are potentials in the market but the consumer preferences are skewed against the products that are offered. the companies keep into account the timing factor that is whether the consumers are ready to accept the products that are offered by them. 54 .1  OPPORTUNITIES OF THE WESTERN RETAILERS IN INDIA The retail industries in the western countries have reached a point of saturation and there is no way of expanding. and Supervalu who have plans to enter as single branded retailers. In this backdrop the retail giants are trying to make their mark in the retail market of countries that still have untapped potential of expansion.Part 2. India happens to be one of them. Page No. In gauging whether to enter.

On the other hand. expansion of telecom sector etc.Part 2. Traditional retailers can use this situation in their favor by taking franchisees of the mega players of this industry. Secondly the indirect benefits like better roads. mechanics etc. Last but not the least the huge tax revenue generated from these retail biggies and collected in government coffers will gradually wipe out the ugly looking fiscal and revenue deficits. Besides the transaction in foreign currencies by these MNCs will create a balance in exchange rate and will bring in stable funds in the economy as opposed to FII's Page No. 55 . will give a 'big push' to other sectors including the rural one itself. online marketing.2  CONTRIBUTION OF „FDI‟ IN RETAILING Permitting Foreign Direct Investment in the retailing sector can have immense benefits. It also stems out an indirect employment generation channel by training and employing people in the transportation and distribution sectors such as drivers. It is also evident that real estate is a genuine challenge for organized retailing. The retail sector is highly dependent on the rural sector. Thus it can facilitate the improvement of the standard of living of farmers by purchasing commodities at a reasonable cost. the consumer gains from the wide variety of choices and a more diversified basket of prices available under one roof. It can generate huge employment for the semi-skilled as well as illiterate population which otherwise can't be employed in the already confined rural and organized sector.

3  BENEFITS TO THE INDIAN CONSUMER: One has to agree that the entrance of big players will ensure the higher quality of service and produce being sold to the consumers. There are other indirect benefits in terms of choice and pricing that will be passed along to the consumers as the big retailers will compete with each Other for greater share of the market.hot money. Page No. Part 2. This will in turn act as a boost to the developing (or 'transforming'. as suggested by the USAID) economy of India. 56 .

57 .Chapter (3) Page No.

close to $200 billion. and a steep rise in rural consumption. thanks to the nascent stage of modern retail and the „malling‟ of India. It has further been predicted that the retailing industry in India will amount to US$ 21. This $200 billion should become $300 billion in the next five to six years.5 million people by the year 2010. India retail industry is one of the fastest growing industries with revenue expected in 2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. It is expected that by 2016 modern retail industry in India will be worth US$ 175. Organized retail in India is expected to grow at 40% for the next five years. And A KPMG report says that the organized retail would grow at a higher rate than GDP in the next five years Page No. This is a time when organized retailing is just getting into full steam and the opportunity is huge.Part 3. says an analysis by Ma Foi Management Consultants Ltd. The retail sector would generate employment for more than 2.5 billion.5 billion by 2010 from the current size of US$ 7. rising incomes. retail in India is huge. A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in urban areas.200 billion. of which organized retail accounts for just $6 billion.1  LATEST TRENDS IN RETAIL SECTOR Today. 58 .

Recent Trends & Changes  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  Multiple drivers leading to a consumption boom:  Favorable demographics  Growth in income  Increasing population of women  Raising aspirations : Value added goods sales 3. 59 .1 Retail Analysis  Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number of double-income households. Page No.

25 billion over the next 3.89 million  DLF plans to invest US$ 4.02 billion over four years to develop about 20 large shopping malls across the country  Israeli mall developer Plaza Center NV plans to invest US$ 1. five-seven years to  Reliance Retail is going ahead with plans worth an investment of US$ 3.com to offer products on the web  Spencer's is also planning to set up 500 more stores by June 2008 with an investment of nearly US$ 125. Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across most categories of consumption.  Companies using their own web portal or tie-sups with horizontal players like Rediff. 60 .com to eBay to radically change buying behavior across the globe Page No.77 billion for setting up 205 stores  IT is a tool that has been used by retailers ranging from Amazon.2 Retail Market Size set up 50 malls in India.com and Indiatimes.

Stores trying to emulate the model of WalMart. sub-urban discount stores. which are backed by the corporate house such as 'Ansals' and 'PVR„ the unorganized sector is getting organized. Ex.3 Retail Segments Page No. Quasi-mall. and malls. RPGs 3. Bombay Bazaar and E-food mart formed which are aggregations of Kiranas. Cash and carry etc  Unorganized retailing is getting organized: To meet the challenges of organized retailing such as large cineplexes. Bombay Bazaar. Big Bazaar. Ex.  Emergence of discount stores: They are expected to spearhead the organized retailing revolution. 25 stores in Delhi under the banner of Provision mart are joining hands to combine monthly buying. Experimentation with formats: Retailing in India is still evolving and the sector is witnessing a series of experiments across the country with new formats being tested out. 61 .

Delhi/NCR and Mumbai are the felicitated regions as the top companies have rated the spending potential of consumers in the vicinity of the national capital and the financial capital as excellent. The countries are expecting a surge in the growth sprint and let‟s hope for the best. It works on the same economy model as Wal-Mart and has considerable success in many Indian cities and Page No.2  MAJOR PLAYER OF RETAIL INDUSTRY The Indian retail sector has been euphoria over the last five years. Reliance. currently with 75 outlets. Chennai.T. 62 .Part 3. Other metros such as Kolkata. Top Companies: An analysis Big Bazaar is a chain of department stores in India. Hyderabad and Bangalore have caught the sight of investors but their fortunes are yet to be illuminated. It is owned by the Pantaloon Retail India Ltd. DLF etc. have shown the way for other to enter. Companies like the Future Group. India topped the A. According to geographical expansion. Kearney's Global Retail Development Index for two consecutive years and this has infatuated Indian as well as foreign retail players to go gaga on the merchandising track. BhartiWalmart. Future Group.

health. communication products. It has a grocery department and vegetable section known as the Food Bazaar and its online shopping site is known as FutureBazaar. wellness and beauty. home solutions and consumer electronics. Later the management agreed to reinstate the sacked workers Pantaloon Retail India Ltd.000 people. fashion products etc. The company owns and manages multiple retail formats catering to a Page No. E-tailing and leisure and entertainment. It is the biggest and the fastest growing chain of department store and aims at being 350 stores by the end of year 2010.com. general merchandise. The real estate fund management company promoted by the Future Group expects to develop more than 50 projects across India covering a combined area of more than 16 million sq. has over 450 stores across 30 cities in India and employs over 18.small towns. Kishore Biyani. Pantaloon founded by Mr. ft. On April 1 2007. Currently Big Bazaar stores are located only in India. The idea was pioneered by entrepreneur Kishore Biyani. fashion. is India‟s leading retail company with presence across food. the CEO of Future Group. books and music. 63 . It offers all types of household items such as home furnishing. Headquartered in Mumbai (Bombay). Big Bazaar had to shut its outlets in Mumbai as the 120 retrenched employees called a strike with the support of Bhatia Kamgar Sena (the trade Union wing of Shiv Sena). utensils.

a hypermarket chain. Pantaloon Retail forayed into modern retail in 1997 with the opening up of a chain of department stores. a supermarket chain. Depot (books. Unilever and Procter & Gamble at consumer discounts of 20-30 per cent.catch him slacking. Collection I (home improvement products). as a garment manufacturing company. In 2001. gifts and stationeries). seamless mall located in the heart of major Indian cities. which opened shop in Mumbai last month through a franchise agreement with local company Normal Lifestyle. The latest to face the wrath of the 43-year-old is South African hypermarket Shop rite.wide cross-section of the Indian society and its width and depth of merchandise helps it capture almost the entire consumption basket of the Indian consumer. And now that he's set himself the task of retaining control of the largest retail space in the country. Some of its other formats include.com. he won't let anyone . Page No. lower than even Biyani's purchase prices in his Big Bazaar and Food Bazaar stores. it launched Big Bazaar. E-Zone (consumer electronics). He has the knack of catching rivals off-guard and striking where it hurts most. music. It went on to launch Central. followed by Food Bazaar. The hypermarket began retailing products from big boys Nestle. all (fashion apparel for plus-size individuals). Pantaloons. Shoe Factory (footwear) and Blue Sky (fashion accessories). 64 . Founded in 1987. It has recently launched its retailing venture. In India's chaotic markets. Kishore Biyani is the unchallenged king of retail. futurebazaar.suppliers or international promoters included . a first of its kind.

The super marts will sell fresh fruits and vegetables. the stores would provide direct employment to 5 lakh young Indians and indirect job opportunities to a million people. The Reliance Fresh supermarket chain is RIL‟s Rs 25. and eventually have a pan-India footprint by year 2011. 2007) opened several "Fresh" outlets in Chennai. Reliance Fresh recently (24th Jan. Reliance is still testing its retail concepts by controlled entry beginning in the southern states Page No. Mumbai. fresh juice bars and dairy products and also will sport a separate enclosure and supply-chain for non-vegetarian products. New Delhi.Reliance Fresh is the retail chain division of Reliance Industries of India which is headed by Mr. groceries. Ludhiana increasing its total store count to 40. The company also has plans to train students and housewives in customer care and quality services for part-time jobs. Chandigarh. Reliance has entered into this segment by opening new retail stores into almost every metropolitan and regional area of India.Mukesh Ambani. Reliance plans to invest Rs 25000 cores in the next 4 years in their retail division and plans to begin retail stores in 784 cities across the country. Jaipur. Hyderabad. according to the company. staples. 65 .000 crore venture and it plans to add more stores across different g. Besides.

it is now present nationally across 1000 outlets and spread across more than 90 cities. Derived from the Sanskrit word. Today. 1997 with an investment of about Rs. It opened its first store in Thiruvanmiyur in Chennai in March. It is also dubbed as India's largest retail chain. without any compromise on quality of goods purchased. He also plans to invest Rs. R. Hariyana. Subhiksha now has even opened Specialized Mobile shops called Subhiksha Mobile where mobiles are sold at a discounted price Subhiksha is India's largest supermarket. It has recently commenced operation in Kerala also. Maharashtra. Karnataka and TN. 5 lakh. professionally managed and vibrant organization. vegetables. Subramaniam. fruits. 66 . It was started and is managed by Mr. 365 days a year. Subhiksha now has the pan Indian presence with stores across Delhi. AP. Started in 1997 as a single store entity in South Chennai. medicines and mobile phones.500 crore to increase the number of outlets to 2000 across the country by 2009. pharmacy and telecom chain. Subhiksham or "giver of all things good". UP. Punjab. The retail chain has seen a considerable growth by offering goods at cheaper rates and there by increasing its customer base. has guided Subhiksha to deliver savings to all consumers on each and every item that they need in their daily lives.Subhiksha is an Indian retail chain with more than 760 outlets selling groceries. IIM Ahmedabad alumni. it is a multi-location. Vision to deliver consistently better value to Indian consumers. You can now locate Page No. Gujarat.

50. Kodai. Pune. Chennai.000 sq ft. Coimbatore. They are slowly transforming into 'lease' and 'revenue share' models. It caught public eye when it launched the 2. the A. Future plans of DLF involve opening up of 100 malls (specialty malls. 67 . Trivandrum and Vellore DLF Retail Developers Ltd. It was started in May 1996 as a division of Spencer & Co. Currently it operates 89 stores in Bangalore. Food world is a chain of supermarket stores. Besides being India's largest real estate developer. DLF is also of the leaders in innovating shopping malls in India.V. is one of the troikas of the DLF Group. Salem. Local players like ITC. Birla Group and Tatas have given the hints to Page No. DLF has plans to invest Rs. In August 1999 it became a separate company. ICICI Venture Capital has a 24% stake in Subhiksha. Pondichery. Till last year the company was involved in building 18 malls out of which 10 were in the NCR region.the nearest Subhiksha store in your area with the Store Locators. big box retailing and integrated malls) across 60 cities in next 8-10 years. a part of the RPG Group. shopping mall in Gurgaon. Secunderabad. Hyderabad. 2000-3000 crore in all the emerging areas from metros to class cities in the next two years. It has brought a dramatic change in the lifestyles and entertainment with its City Centers and DT Cinemas. Erode.

a wholly owned subsidiary of Bharti Enterprises.. Bharti Retail aims to foray every city with a population exceeding 1 million.. The second JV concerns the franchise arrangement. Chairman of the Bharti Group assured that the ventures will use “low prices every day” and “best practices for the satisfaction of the customer”. ft.enter organized retail. France‟s Carrefour SA and Britain‟s Tesco too were recently in news for their future plans to explore the Indian retail market Bharti Retail. It has plans to come up with an investment of more than $2 billion in convenience stores. The first JV ensures cash and carry business. supermarkets and hypermarkets spread over an aggregate 10 million sq. The expansion drive looks ambitious but analysts are worried that Bharti may face stiff competition from Pantaloon and Reliance as they too have sanguine plans to flood the markets with thousands of retail outlets in the coming five years. Has announced two joint ventures (JV)with the international retailing behemoth. Bharti's JV with Rothschild. in which 100 percent FDI is permitted and it can sell only to retailers and distributors. Sunil Mittal. Bharti Telecom also has plans to offer all its fixed and mobile telecom products and services from a single window to the SMB (Small and Medium Business) enterprises under the Bharti Infotel division. Wal-Mart. Processed foods and vegetables will be delivered by Bharti Field Fresh. Page No. 68 .

The company intends to bring the world‟s best retail technology. Gurgaon. the Reid & Taylor Retailer of the Year Award for 2006 and more recently. a Dubai-based retail chain. 1991 by the K. Currently. 5 Home Centers and 1 Baby shop store across Chennai. Bangalore. Lifestyle began operations in 1998 with its first store in Chennai in 1999 and now has 13 Lifestyle stores. Positioned as a trendy. Business World-IMRB Most Respected Company Awards Survey has rated Lifestyle as the Most Respected Company in the Retail Sector in 2003 and 2004. youthful and vibrant brand that offers customers a wide variety of merchandise at exceptional value for money. With over 30 years‟ experience in retailing. Mumbai and Ahmedabad. the Group has become the foremost retailer in the Gulf. Shopper's Stop Page No. 69 . Delhi. they are adding 4 to 5 new stores every year with an immense amount of expertise and credibility. the Lycra Images Fashion Award for the Most Admired Large Format Retailer of the Year in 2006 The foundation of Shopper's Stop was laid on October 27. retail practices and sales to India. Lifestyle has also been awarded the ICICI-KSA Technopak Award for Retail Excellence in 2005. Hyderabad. Raheja Corp.Lifestyle is part of the Landmark Group. group of companies Shoppers‟ Stop aims to position itself as a global retailer.

70 .has become the highest benchmark for the Indian retail industry Shopper's Stop in the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS). The stores offer a complete range of apparel and lifestyle accessories for the entire family. Color Plus. Their motto: “We are responsible for the goods we sell”.000 products range which fulfills all your household needs. Shoppers' Stop retails its own line of clothing namely Stop.. in 18 states across India. and can be catered to less than one roof. The showrooms have over 70. From apparel brands like Provogue. Arrow. Zodiac to cosmetic brands like Lakme. The cost benefits that is derived from the large central purchase of goods and services is passed on to Page No. It is covering about 1996592 lac sq. Chambor. Life. The merchandise at Shoppers‟ Stop is sold at a quality and price assurance backed by its guarantee stamp on every bill. Each store gives you international quality goods and prices hard to match. Le Teint Ricci etc. Shoppers‟ Stop brought international standards of shopping to the Indian consumer providing them with a world class shopping experience. Levi‟s. Scullers. Vettorio Fratini and DIY. With its wide range of merchandise. Its outlets cater to almost all price ranges. Vishal Mega Mart is one of fastest growing retailing groups in India. exclusive shop-in-shop counters of international brands and world-class customer service. Kashish. Shoppers‟ Stop caters to every lifestyle need. ft.

The Vishal stores offer affordable family fashion at prices to suit every pocket.R. 6026. The turn over of the Retail division stands at 100 crore.Home & Beyond has carved its niche with its fashion driven model in the country's major metros. has two models that cater to both. 71 . Our International Home Textiles Company. into diverse businesses.R.L. SPACES. industries.S.53 million for fiscal 2007. Welspun Retail Limited (W.the group‟s prime focus is on retailing. regions and has six companies under the umbrella brand. The group had of turnover Rs 2884. Welspun India Limited (W I L) launched its Indian retail division. $1 billion group.) was established in 2003 as a part of Welspun Group. The Retail brands. under the dynamic leadership of Mr.  W. is the first Retailer of soft furnishing for "Home" in India.43 million for fiscal 2006 and Rs.L. 1463. Page No.12 million for fiscal 2005.the consumer the group had a turnover of Rs. Ram Chandra Aggarwal. while Welhome targets a larger audience with its value for money model.  Launched Spaces -Home & Beyond and Welhome (Welspun Factory Outlet) in the same year. the aspiration clientele and the value for money conscious clientele. one of the fastest growing business conglomerates in India. expected to double in the next 5 years Key Differentiating Attributes  W.L. WRL with an aim to capture the Home Textiles market in 2003.R. Welspun is a U.

Mysore. Delhi. Page No. 79 and Curtains starting at Rs.  Offer specialized products at affordable prices. Pune.6 crores (FY 20052006) and currently operates 22 stores in the major metros and mini metros of India. 357. Chennai. Ghaziabad. Bed sheets starting at Rs. 199. Lucknow. 72 . Phenomenal growth anticipated in FY 2007-08. Ahmedabad. a perception of values. Started in 1998.Westside operates stores in Mumbai. Noida. Vadodara.  Panel of International Designers for the new collections. The foresight of the TATA Group. Nagpur. An international shopping experience. Jaipur.  Design Studio ranks amongst the best in the country. Bangalore. is paying high dividends as retail is one of the booming sectors in India. has created a loyal following for Westside's own brand of merchandise. Gurgaon. Surat. 99 Trent is the retail arm of the TATA group. one of the many growing retail chains in India. Indore. Kolkata. The company has a turnover of Rs. Westside was named the 'Most Admired Large Format Retail Chain of the Year' by the Lycra Images Fashion Awards 2005. and offering the latest styles. towels starting at Rs. Trent operates Westside. Hyderabad. which invested in retail relatively early.

73 . Owns a subsidiary electric company in Texas. Inc. discount department stores. which conducted the research that supported the ads. It has wholly-owned operations in Argentina. 2007. It had 38 stores operating with 1. but it sold its retail operations in South Korea and Germany in 2006 after sustained losses. is an American public corporation that runs a chain of large. Always" slogan. and will possibly move into the power business. it was incorporated on October 31.S.500 employees and sales of $44.. and in Japan as Seiyu. 1969.2 million . It opened its home office and first distribution center in Bentonville. in the UK as ASDA." replacing the "Always Low Prices. It is the world's largest public corporation by revenue. Wal-Mart is the largest private user of electricity in the US. Brazil. On September 12. Puerto Rico. according to the 2007 Fortune Global 500. found that Wal-Mart's price level reduction resulted in savings for Page No. Global Insight. with an estimated 22% share of the toy market. as well as the largest toy seller in the U. Founded by Sam Walton in 1962. Canada.Wal-Mart is the largest grocery retailer in the United States. "Save Money Live Better. Wal-Mart introduced new advertising with the slogan. and the UK. Wal-Mart operates in Mexico as Walmex. Wal-Mart's investments outside North America have had mixed results: its operations in South America and China are highly successful. with an estimated 20% of the retail grocery and consumables business.Wal-Mart Stores. Arkansas. which it had used for the previous 19 years. It is also undertaking a number of environmentally conscious initiatives to reduce energy usage and waste.

Dominican Republic and Colombia. with a global network of outlets. Carrefour means cross-road in French. Discount Store. Carrefour is active in many types of retail distribution: hypermarkets. Cosmetics. 74 . Grocery Stores. It is the second largest retail group in the world in terms of revenue after Wal-Mart. Argentina. Brazil. but also has shops in North Africa and Asia. Carrefour operates mainly in Europe. Recently The $130 billion French retail Carrefour has set up a 100 percent-owned arm to enter the wholesale merchandise business in India and will opt for the franchising route to open multi-brand retail stores in the Page No. The group was created by Marcel Fournier and Denis Deffore in 1957. and Cash & Carry.500 per household 3. which equated to $957 per person or $2.1 World-Wide Retailers Carrefour SA is a French international hypermarket chain. supermarkets.consumers of $287 billion in 2006.

either directly or through its subsidiaries. is “Right Store. Banking. Kroger operated. Page No. fresh food across the country. wine etc…. The slogan of Kroger co. dairy. beer. nearly 800 convenience stores. The company-wide program will increase the number of stores in the Kroger family that donate safe. Right Place”. 579 of which had fuel centers. and 42 manufacturing facilities in 32 states. Kroger‟s goal is to donate 50 million pounds of nutritious. Ohio. we employ a growing family of more than 290. Kroger‟s recently launched Perishable Donations Partnership will bring critically needed perishable food items into the food bank process. Carrefour WC&C India will also enter these areas where the Indian franchisee can get the same technical expertise that go into running the retail trade stores of the French company across the globally. perishable food to Second Harvest food banks that are equipped to safely handle and distribute fresh food. It reported over US$66 billion in sales during fiscal year 2007 and is currently the second-largest grocery retailer in the country by volume and third-place general retailer in the country. with Wal-Mart and The Home Depot filling slots one and two.country. 400-plus jewelry stores. 2. The Kroger Co. 75 .500 grocery stores. founded by Bernard Henry Kroger in 1883 in Cincinnati. respectively.000 associates coast-to-coast and presently Kroger is active in many other Retail Distribution like Bakery. is an American retail supermarket chain and parent company.

According to reports. 3 general retailer behind Wal-Mart and The Home Depot runs all its nearly 2. 76 .Latest News of Retail Market in India  Israeli Giants Enter Indian Retail Sector Israeli mall giants. the company representatives have already met 3-4 prominent real estate companies of India for joint ventures. owners of retail-linked realty assets across the world. Big Shopping Group. is no exception as he went on acquiring shopping centers from market to market Us Retail Major Kroger Plans Entry into Indian Real Estate The $66-billion US based grocery giant. Some prominent sources said that Kroger is primarily interested in jointly developing new FDI-compliant commercial projects or buying into existing ones. America No. at the helm of Gazit Globe. Tel Aviv-based mall giant Gazit Globe has tied up with one of the HDFC funds to pump in $150 million into developing assets. Interestingly. Kroger is all set to enter into Real Estate India. Israeli tycoons and families. have turned their attention to retail assets from Sao Paulo to Macedonia. of Israel‟s biggies has teamed up with Lehman Brothers Real Estate Private equity to set up „open malls‟ in tier I and tier II cities. including supermarket anchored retail play.500 supermarket stores in the US Page No. as mall ownership and management provides attractive 20% plus annualised returns in developing markets. Billionair eChaim Katzman. are buying into India‟s money minting retail sector. which raked in money from core real estate developments in the US.

 Reliance Retail plans to turn Adani outlets into specialty Stores Reliance Retail will be changing the format of its recently purchased Adani Retail stores into specialty stores for jewelry. it will break off all operational ties. home furnishings. ranging from 2. medicines. The company has also taken in some of the executives onto its own team. 77 . telecom and consumer electrical stores. a children‟s wear brand and one of the first brands that Kishore Biyani. Ultimately Pantaloon had to even depute top management. MD of Pantaloon had invested in. the stores cannot be converted to Reliance Fresh stores as they are too small. Pantaloon had invested in the company with the thought that it would “drive business on its own” but unfortunately.000 sq ft. According to a senior executive. eyeglasses. Sources report that while the financial arrangement with Gini & Jony will continue. Source: The Economic Times  Pantaloon Retail pulls out from Gini & Jony Pantaloon Retail India Ltd (PRIL) has officially pulled out of Gini & Jony.000-3.000 sq ft in size. it has not been able to work in a cohesive manner with Pantaloon and become dependant on it. Source: The Economic Times Page No. while most Reliance Fresh stores are around 4. including the CFO to take care of its functioning.

Chapter (4) Page No. 78 .

This was how WalMart had entered joining hands with Bharti Enterprises. (6) On line retailing is still to leave a mark on the customers due to lacunae that we have already mentioned.6% to the total trade. confectionery etc. (3) The retail sector in India contributes 10% to the Gross Domestic Product and 8% to the employment of the country. (8) Hypermarket is emerging as the most favorable format for the time being in India Page No.. The organized sector contributes about 4. This Factor deters the retailers in India from adopting a single retail format. Again they can only enter the market through franchisees. Multi brand outlets are still beyond their reach. the organized and the unorganized. (4) In terms of growth the FMCG retail sector is the fastest growing unit and the retail relating to household care. supermarkets. (5) The foreign retail giants were initially restricted from making investments in India. shopping malls. The organized sector whose size is expected to triple by 2010 can be further split up into departmental stores. But now FDI of 51% is permitted in India only through single branded retail outlets. (2) In terms of value the size of the retail sector in India is $300 billion. have lagged behind. MAJOR FINDINGS (1) The Retail Sector in India can be split up into two. (7) Cultural and regional differences in India are the biggest challenges in front of retailers. 79 .

Therefore. it would be very useful to form a consortium of other such small retailers in that vicinity and take a pro-active approach to pool in resources and improve the overall infrastructure. Intelligence as well as almost real-time customer purchase behavior information. and most commercial areas in India do have this potential. CONCLUSION For a start. and analyze Whether their current market offers a potential redevelopment of the area into a more modern multioption destination. The message. therefore for the existing small and medium independent retailers is to closely examine what changes are taking place in their immediate vicinity. If it does. these retailers need to invest much more in capturing more specific market. the potential for improving retail productivity and cutting costs is likely to decrease. 80 . Re-engineering of product sourcing philosophies-aligned more towards collaborative planning and replenishment should then be next on their agenda. it will become important for retailers to secure a distinctive position in the marketplace based on value. Page No. As the retail marketplace changes shape and competition increases. The next effort should be to encourage retailers to make some investments in improving the interiors of their respective establishments to make shopping an enjoyable experience for the customer. The retailers also need to make substantial investment in understanding/acquiring some advanced expertise in developing more accurate and scientific demand forecasting models. relationships or experience.

value is function of not just price. 81 . In fact.Finally. quality and service but can also be enhanced by Personalization and offering a memorable experience. it is critical to understand the target customer's definition of value and make an offer.5 Retail Touches Economy Page No. it is important to note that these strategies are not strictly independent of each other. But most importantly for winning in this intensely competitive marketplace. which not only delights the customers but also is also difficult for competitors to replicate. building relationships with customers can by itself increase the quality of overall customer experience and thus the perceived value. 3.

Chapter (5) Page No. 82 .

National Retail Federation (NRF)  “The Great Indian Retail Story” –Report by Ernst & Young India  “Indian Retail Industry”.Report by KPMG in Hong Kong.Rocsearch. Delhi  Philips Kotler “Marketing Management” 11th Edition.com  “Global Retail Industry Facts and Figures”.  “Global Powers of Retailing 2006”. Macmillan Business Book. S L Gupta “Sales & Distribution Management”. Delamore Consulting Ltd. Eastern Economy Edition.Report by www. S Namakumari “Marketing Management”.Report by UNEP Page No.Report by Tarun Arora. V S Ramaswamy.Report by CII  “Retail Outlook for China 2005”. Pearson Education  Dr.  Christopher Lovelock “Service Marketing” 5th Edition.Report by Sanjeev Kumar. 83 . Bharti Retail  “Retail Industry -Where does India stand?”. Excel Books  Business and Marketing Magazine “4ps Business & Marketing”  Business Magazine “Business Today”  “Changing Consumer Interface of Market Driven Innovations”. Eastern Economy Edition  Ramanuj Majumdar “Product Management In India” 2nd Edition.  “Retail Scenario in India-Unlimited Opportunity”.Report by Stores Magazine.

nic.fibre2fashion.blogspot.com  http://www. http://www.uk  http://www.com  http://www.com  http://www.htm  http://www.com/articleshow  http://www.deloitte. 84 .in/  http://www.thehindubusinessline.financialexpress.channeltimes.indianretalling.com  http://www.indiainbusiness.indiatimes.com  http://www.com/business-and-economy/retail-industry  http://www.com/2007/10/retail-scenario-in-india.pantaloon.cxotoday.com  http://www.retailspice.com/reports/323895  http://timesofindia.com Special Thanks to: Wikipedia.com  http://www.co.com/industry-article  http://rohanrrao.com  http://www.google.researchandmarkets.MarketResearch.economywatch.rncos.html Page No.com  http://www. the free encyclopedia.

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