A Study

On

Retail Industry
 TABLE OF CONTENT

Sl. No. Particulars Page No.

1. INTRODUCTION

2. INDUSTRY PROFILE AND COMPANY PROFILE.

3. THEORETICAL BACKGROUND OF THE STUDY

4. DATA ANALYSIS AND INTERPRETATION.

5. FINDING, SUGGESTIONS AND CONCLUSION

BIBLOGRAPHY

LIST OF TABLE

Sl. No. Particulars Page No.

1. Table Showing Type of Store

2. Table Showing Type of Pricing Strategies Applied

3. Table Showing Type of Product

4. Table Showing Group of consumer

5. Table Showing Promotional Activities

6. Table Showing Preferred type of advertising channel

7. Table Showing what you concentrate more on?

8. Table Showing Factors affecting Pricing policy

9. Table Showing Reason for coming to the store

10. Table Showing Shopping daily items apart from behtar supermarket.
 LIST OF CHART

Sl. No. Particulars Page No.

1. Chart Showing Type of Store

2. Chart Showing Type of Pricing Strategies Applied

3. Chart Showing Type of Product

4. Chart Showing Group of consumer

5. Chart Showing Promotional Activities

6. Chart Showing Preferred type of advertising channel

7. Chart Showing what you concentrate more on?

8. Chart Showing Factors affecting Pricing policy

9. Chart Showing Reason for coming to the store

10. Chart Showing Shopping daily items apart from behtar supermarket.
 CHAPTER 1: INTRODUCTION

RETAIL INDUSTRIES

Retail is India’s largest industry, accounting for over 10 per cent of the country’s GDP
and around eight per cent of the employment. Retail industry in India is at the crossroads. It
has emerged as one of the most dynamic and fast paced industries with several players
entering the market. But because of the heavy initial investments required, breakeven is
difficult to achieve and many of these players have not tasted success so far. However, the
future is promising; the market is growing, government policies are becoming more
favourable and emerging technologies are facilitating operations. Retailing in India is
gradually inching its way toward becoming the next boom industry. The whole concept of
shopping has altered in terms of format and consumer buying behaviour, ushering in a
revolution in shopping in India. Modern retail has entered India as seen in Sprawling
shopping centres, multi-storied malls and huge complexes offer shopping, entertainment and
food all under one roof. The Indian retailing sector is at an inflexion point where the growth
of organized retailing and growth in the consumption by the Indian population is going to
take a higher growth trajectory.

The Indian population is witnessing a significant change in its demographics. A large

young working population with median age of 24 years, nuclear families in urban areas, along
with increasing working-women population and emerging opportunities in the services sector
are going to be the key growth drivers of the organized retail sector in India.

Retailing is the final step in the distribution of merchandise - the last link in the
Supply Chain - connecting the bulk producers of commodities to the final consumers.
Retailing covers diverse products such as foot apparels, consumer goods, financial services
and leisure.

A retailer, typically, is someone who does not affect any significant change in the
product execs breaking the bulk. He/ She are also the final stock point who makes products or
services available to the consumer whenever require.

Hence, the value proposition a retailer offers to a consumer is easy availabilities of the
desired product in the desired sizes at the desired times.
 In the developed countries, the retail industry has developed into a full-fledged
industry where more than three-fourths of the total retail trade is done by the organized
sector. Huge retail chains like Wal-Mart, Carr four Group, Sears, K-Mart, McDonalds, etc.
have now replaced the individual small stores. Large retail formats, with high quality
ambiance and courteous.

Retailing is the interface between the producer and the individual consumer buying
for personal consumption. This excludes direct interface between the manufacturer and
institutional buyers such as the government and other bulk customers. A retailer is one who
stocks the producer’s goods and is involved in the act of selling it to the individual consumer,
at a margin of profit. As Such, retailing is the last link that connects the individual consumer
with the manufacturing and distribution chain.

RETAILING IS MORE THAN SELLING GOODS:

Retailing consists of the sale of goods or merchandise, from a fixed location such as a
department store or kiosk, in small or individual lots for direct consumption by the purchaser.
Retailing is a well-recognized business function which compromises making available
desired product in the desired quantity at the desired time. This creates a time, place and form
utility for the consumer. The success of retailing is highly dependent on an efficient supply
chain management. A well-developed supply chain reduces wastages and transaction cost
there by reducing the cost of inventories to be maintained by the producers and the traders. A
reduction in the cost of inventory management leads to a reduction in the final price to the
consumer.

Retailing has been identified as a thrust area for promotion of textiles, processed
foods, agricultural and horticultural produce. Retail Sector can be divided into organized and
unorganized sectors.
UNORGANIZED RETAIL:

Unorganized retailing is characterized by a distorted real-estate market, poor

infrastructure and inefficient upstream processes, lack of modern technology inadequate
funding and absence of skilled manpower. Therefore, there is a need to promote organized
retailing.

EVALUATION OF ORGANIZED RETAILING:

American mass retailing began in the late 1800s with Montgomery Ward marketing
its products through general merchandise mail order catalogs,which was very effective at that
time for reaching a largely rural society. In the 1940s, the population began its movement to
the suburbs as the economy shifted from an agricultural base to an industrialized nation. The
first shopping centre was opened, which would eventually be a significant factor in the
decline of downtown Retailing in the 1960s and 70s. JC Penney and Sears began their
national mass retailing expansion, and the use of credit cards as Major retail chains began.

The 1950s witnessed the reaffirmation of the traditional family. The first planned mall
and franchised food restaurant opened. As people continued to flock to the suburbs, the
downtown areas began to decline. Larger suburban malls were created and anchored by
traditional downtown department store merchants. Freeways were expanded and the sales of
private automobiles grew, giving the consumer a wider accessible area in which to shop.
Discounters were born, Korvetta being one of the firsts.

The 1960s witnessed the growth of enclosed shopping centers, with department stores
anchors and specialty retail chains. The baby boomers were teenagers at this point, leading to
the growth of juniors-oriented stores and vendors. Women became targets not just as mothers
or wives as they entered the workforce and consumers became more demanding in their
expectation of quality and service.

In the 1970’s , promotional pricing started to pick up the department stores as off-
price retailer emerged. The growth of retail space slowed, as sales increase came at the
expense of competition, not of market growth. This competitive market led to the
underperformance of several retailers as gross margins experienced downtown pressure from
increased competition. Retailers in large upscale markets recognized the time shortage created
by dual-career families and began to offer more services to assist in saving time.
 The 1980s witnessed the growth of off price retailing as a distinct, enduring retail
format. Retailers began to drop low profit lines. Acquisitions and mergers were actively
utilized as growth strategies, private brands were redeveloped to enhance uniqueness and
margins and offshore sourcing was developed to compensate for margins.

Broadly the organized retail sector can be divided into two segments, In-Store
Retailers, who operate fixed point-of-sale locations, located and designed to attract a high
volume of walk-in customers, and the non-store retailers, who reach out to the customers at
their homes or offices.

It was only in the year 2000 that the economists put a figure to it: Rs.400, 000 crore
(1crore = 10 million) which is expected to develop to around Rs.800, 000 crore by the year
2005 – an annual increase of 20 per cent. Retailing in India is unorganized with poor supply
chain management perspective. According to a recent survey by some of the retail consulting
bodies, an overwhelming proportion of the Rs.400, 000 crore retail markets are
UNORGANISED. In fact, only a Rs. 20,000crore segment of the market is organized. As
much as 96 per cent of the 5 million-plus outlets are smaller than 500 square feet area. This
means that India per capita retailing space is about 2 square feet (compared to 16 square feet
in the United States). India’s per capita retailing space is thus the lowest in the world (source:
KSA Technopak (I) Pvt Ltd, the India operation of the US-based Kurt Salmon Associates).

Currently the retail landscape is filled with Supermarket chains with over1000 outlets
all over the country to increase to around 5000 by the 2005. The success of a couple of hyper
mart’s indicating the evolution of hypermarkets in the country prominent among them is
Giant, Metro, Big Bazaar models. While the average bill value at a supermarket is in the
range of Rs.300 per bill, the average bill amount at a Hypermarket is in the range ofRs.750-
1000, indicating that the model is in tune with the global models where the average spend is
increasing with the shopping experience.

IMPACT OF ORGANIZED RETAIL:

Organized retailing is spreading and making its presence felt in different parts of the
country. The trend in grocery retailing, however, has been slightly different with a growth
concentration in the South. Though there were traditional family owned retail chains in South
India such as Nilgiris as early as 1905, the retail revolution happened with the RPG group
starting the Food world chain of food retail outlets in South India with focus on Chennai,
Hyderabad and Bangalore markets, preliminarily. The experiment has reaped rich dividends
and the group is now foraying into other territories as well. Owing to the success of Food
world model of RPG group, several new models such as Trinethra, Subhiksha, Margin Free
and others have made their foray into this sector albeit at regional levels. 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% y-o-y.
To be successful in food retailing in India essentially means to draw away shoppers from, the
roadside hawkers and kirana stores to supermarkets. This transition can be achieved to some
extent through pricing, so the success of a food retailer depends on how best he understands
and squeezes his supply chain. The other major factor is that of convenience shopping which
the supermarket has the edge over the traditional kirana stores. On an average a supermarket
stocks up to 5000 SKU’s against few hundreds stocked at an average kirana stores. In the
organized retail industry, the gestation periods are long, institutional funding is difficult, and
there is none or little Government support. But the belief among top retailer chains in the
country is that the industry will see large investments coming once the current ban on foreign
direct investment is lifted. But that could be two-three years away. 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. For example,

The next-door grocery shopkeeper is smart and delivers good customer service,
though not value.

As of now, while Chennai has about five organized food and grocery retail chains,
other big cities such as Delhi, Bangalore, and Mumbai average only two-three such chains.
Almost all food retail players have been region-specific as far as geographical presence is
concerned in the country. To illustrate with examples, the RPG Groups Food World, Nilgiris,
Margin Free, Giant, Varkeys and Subhiksha, all of which are more or less spread in the
Southern region; Sabka Bazaar has a presence only in and around Delhi names such as Haiko
and Radhakrishna Food land are Mumbai-centric; while Adani is Ahmedabad-centric.
Industry topography in India is such that spreading presence across cities is a tough call. As
pointed out by many experts, organized food and grocery retailing chains going national
requires significant investments. Retailing within this sector is not just about the front-end,
but involves complex supply chain and logistics issues as well.
The trend and mind set of the present retailer chains in India can be best understood by
studying Food World as an example, which came in first in the food and grocery retailing
sector. The chain has no plans to venture beyond the Southern region just yet. Current plans
are to focus on the Southern markets and achieve saturation. The intention is that by 2005,
they could look at the other regions. Subhiksha, a Chennai based discount chain, too wants to
be the principal store of purchase for at least 40 per cent of all consumers living within 500-
750 meters of the store, that is, within walking distance. 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.

It can be explained that the obstacles of looking at a pan-India model for grocery are
several. Given the federal nature of the country, the weak infrastructure and the major
variances in eating habits in different parts of the country, one will have to replicate the retail
administration costs for at least each region and therefore the gestation period of the project
becomes huge. However, if a model is in place where the upfront store revenues scale very
rapidly, then it is possible. Therefore, if one is to attempt a pan-Indian grocery foray, it will
have to be in the hypermarket format with it’s attend ant investment numbers and risk profile.

If a close look is taken at the nature of the Indian Retail Markets, it can be seen that
there is so much potential to extract from individual regions that players are in no tearing
hurry to spread out. Based on a recent study by a renowned government institution in India, in
the six major metros, Delhi has the highest per capita consumption of food and grocery,
among supermarkets. Chennai, “the Mecca of retailing”, comes at fourth place. This shows
the high potential the sector presents. Chennai has some five supermarket chains, and each of
these is doing well for themselves. So there is enough scope to expand even in one single city
in India.

Sabka Bazaar, a supermarket chain restricted to Delhi alone, is now generating sales
of about Rs.11 crore from its 19 stores which best illustrates the potential of each individual
city. This explains the reason for delay in intentions of retailers to spread far and wide.
BENEFITS OF RETAILING:

Retailing is good for national economies where it has positive influence on influence on
inflation and product availability. It also creates fortunes for its owners and is a tremendous
source of employment. INDIA has been virtually the only developing country in the world
that has been extremely slow in adopting this organized pattern of retailing.

 Better quality products

 Employment opportunities
 Better social infrastructure
 Enhanced foreign exchange
 Benefit to tourism
 Better showcase for exports
 Better realization of taxes

STATEMENT OF PROBLEM

For a retailer, it is very difficult to retain the potential buyer, because the buyers are scattered
according to their convenience of purchasing. In order to keep possession of their sales
volume, the retailer has to face a stiff competition in the retail business. Majority of functions
have to be performed by owners themselves due to limitation of resources. So the researcher
made sincere attempt to analyse the Problems and Prospects faced by retailer in the study
area, during the course of starting and managing their enterprise.

OBJECTIVE:

 To find out the awareness level.

 To find the strategies of both the sectors of retail industry.
 To evaluate the causes of problems in retail business
 To identify the satisfaction level of customers towards retailing services
 To analyse the problems faced by the customers in retail marketing
METHODOLOGY

Research Design:

The research conduct is descriptive, this is descriptive in nature because the study is focused
on fact investigation in a well-structured form and is based on primary data

Primary data:

The study is largely based on the primary data which has been collected through the
structured Questionnaire Method.

Secondary data:

This type of data has already been collected by someone else and has already passed through
statistical process. This type of data has been collected from the following

Sampling Techniques:

Simple Random Sampling method is used for this study.

Sample Size = 100

SCOPE OF THE STUDY:

The scope of the Indian retail market is immense for this sector is poised for the
highest growth in the next 5 years. The India retail industry contributes 10 per cent of the
country’s GDP and its current growth rate is 8.5 per cent. In the Indian retail market the scope
for growth can be seen from the fact that it is increased to US$ 608.9 billion in 2009 from
US$ 394 billion in 2005.

The organized retailing sector in India is only 8 per cent and is expected to rise to 25-
30 per cent by the year 2012. There are under construction at present around 325
departmental stores, 300 new malls, and 1500 supermarkets. This proves that there is a
tremendous scope for growth in the Indian retail market.

The growth of scope in the Indian retail market is mainly due to the change in the
consumer’s behaviour. For the new generation have preference towards luxury commodities
which have been due to the strong increase in income, changing lifestyle, and demographic
patterns which are favourable.
LIMITATION

 Some of the respondents may not give accurate information, as they may not like to reveal
their actual identity, income etc.;
 There may be some positive and negative biases of the respondents;
 Shopper’s may not have the patience to answer all the questions accurately;
 Consumers would like to portray themselves as trendy and elite and may not give their
 actual preferences; and
 Promotions and sales may temporarily draw the attention of price conscious customers
who otherwise may go for unbranded apparels from smaller unorganized retailers.

REVIEW OF LITERATURE:

Barry Berman and Joel R Evans gave an overview on the impact of Retailing on the
economy .They stated that retailing is a major part of U.S. and world commerce. According to
them Retail sales and employment are vital economic contributors and retail trends often
mirror trends in a nation‘s overall economy. According to the Department of Commerce,
annual U.S. retail store sales exceed $4 trillion representing one-third of the total economy.
Telephone and mail-order sales by non-store retailers, vending machines, direct selling, and
Web generate hundreds of billions of dollars in addition to yearly revenues, and apart from
this the other services like personal consumption expenditures on financial, medical, legal,
educational etc. account for another several hundred billion dollars in annual retail revenues.
Outside the United States, retail sales are several trillions of dollars per year.

Rugman and D‘Cruz developed a stream of research that potentially links international
business to globalization theories, pointing to the essentially, regional ‟ rather than, global‖
level of activity in the early 21st century. This theoretical route again has difficulties when
applied to retailing because of the different nature of the international organization of
investment in retailing and the importance of the local market, and adoptions to it, for
retailers. The globalization studies start from an economic perspective, as in Spulber‘s (2007)
study of Dairy Farm and so do not address the issues of social change that have become
explicit in the recent activity of international retailers.
Raff Horst and Schmitt Nicolas investigated the implications for international markets of
the existence of retailers/wholesalers with market power. Two main results were shown. First,
in the presence of buyer power, trade liberalization may lead to retail market concentration.
Due to this concentration, retail prices may be higher and welfare may be lower in free trade
than in autarky, thus reversing the standard effects of trade liberalization. Second, the pro-
competitive effects of trade liberalization are weaker under buyer power than under seller
power.

Loudon and Della identified that the function of several variables involve the customer‘s
motive for store choices. These determinants include factors like store design, store
personnel, advertising and sale promotion, merchandise assortment, physical facilities,
customer services and clientele (social-class membership) which have a larger impact on the
store choice. Sinha Piyush and Banerjee Arindam102 also defined that the product variety
and convenient timings seem to be the utilitarian aspects about the store, which forms an
initial impression on the consumers.
 CHAPTER 2: INDUSTRY PROFILE AND COMPANY PROFILE.

INDUSTRY PROFILE

The Indian retail industry has emerged as one of the most dynamic and fast-paced
industries due to the entry of several new players. Total consumption expenditure is expected
to reach nearly US$ 3,600 billion by 2020 from US$ 1,824 billion in 2017. It accounts for
over 10 per cent of the country’s Gross Domestic Product (GDP) and around 8 per cent of the
employment. India is the world’s fifth-largest global destination in the retail space.

Market Size

Retail market in India is projected to grow from an estimated US$ 672 billion in 2017
to US$ 1,200 billion in 2021F. Online retail sales are forecasted to grow at the rate of 31 per
cent year-on-year to reach US$ 32.70 billion in 2018.

India is expected to become the world’s fastest growing e-commerce market, driven
by robust investment in the sector and rapid increase in the number of internet users. Various
agencies have high expectations about growth of Indian e-commerce markets.

Luxury market of India is expected to grow to US$ 30 billion by the end of 2018 from
US$ 23.8 billion 2017 supported by growing exposure of international brands amongst Indian
youth and higher purchasing power of the upper class in tier 2 and 3 cities, according to
Assocham.

Investment Scenario

The Indian retail trading has received Foreign Direct Investment (FDI) equity inflows
totalling US$ 1.66 billion during April 2000–March 2019, according to the Department of
Industrial Policies and Promotion (DIPP).

With the rising need for consumer goods in different sectors including consumer
electronics and home appliances, many companies have invested in the Indian retail space in
the past few months.
 India’s retail sector investments doubled to reach Rs 1,300 crore (US$ 180.18 million)
in 2018.

Walmart Investments Cooperative U.A has invested Rs 2.75 billion (US$ 37.68
million) in Wal-Mart India Pvt Ltd.

Government Initiatives

The Government of India has taken various initiatives to improve the retail industry in
India. Some of them are listed below:

The Government of India may change the Foreign Direct Investment (FDI) rules in
food processing, in a bid to permit e-commerce companies and foreign retailers to sell Made
in India consumer products.

Government of India has allowed 100 per cent Foreign Direct Investment (FDI) in
online retail of goods and services through the automatic route, thereby providing clarity on
the existing businesses of e-commerce companies operating in India.

Road Ahead

E-commerce is expanding steadily in the country. Customers have the ever increasing
choice of products at the lowest rates. E-commerce is probably creating the biggest revolution
in the retail industry, and this trend would continue in the years to come. India's e-commerce
industry is forecasted to reach US$ 53 billion by 2018. Retailers should leverage the digital
retail channels (e-commerce), which would enable them to spend less money on real estate
while reaching out to more customers in tier-2 and tier-3 cities.

It is projected that by 2021 traditional retail will hold a major share of 75 per cent,
organised retail share will reach 18 per cent and e-commerce retail share will reach 7 per cent
of the total retail market.

Nevertheless, the long-term outlook for the industry is positive, supported by rising
incomes, favourable demographics, entry of foreign players, and increasing urbanisation.
COMPANY PROFILE

Introduction

A one stop solution to find products of everyday use, this highly rated outlet goes to lengths
to make sure you have a plausible shopping experience. Providing the visitors with the
opportunity to pick from a variety of products, they are constantly pushing the boundaries and
innovating their services. They make sure you have an overall pleasurable experience.

Behtar Supermarket is a leading player in the Indian retail industry, is a pioneer in discount
retailing. It has a strong presence in large variety of FMCG products. The company has pan-
India presence with 108 mid-sized hypermarket format stores as on April 28, 2008 covering
about 2.3mn sq ft retail space area. Situated in the state capital Bangalore this store boasts of
the single largest collection of goods and commodities sold under one roof in Bangalore. The
group had a turnover of Rs. 1463.12 million for fiscal 2005. The group had of turnover Rs
2884.43 million for fiscal 2006 and Rs. 6026.53 million for fiscal 2007.The group’s prime
focus is on retailing. The stores offer affordable family fashion at prices to suit every pocket.
The group’s philosophy is integration and towards this end has initiated backward integration
in the field of high fashion by setting up a state of the art manufacturing facility to support its
retail endeavours.

Company Background:

Vishal Retail was incorporated on July 23, 2001 as Vishal Retail Private Limited as a retailer
of ready-made apparels in Bangalore in 2001. In 2003, the company has acquired the
manufacturing facilities from Behtar Fashions Private Limited and M/s Behtar Apparels.
Behtar is one of fastest growing retailing groups in India. Its outlets cater to almost all price
ranges. The showrooms have over 70,000 products range which fulfils all your household
needs, and can be catered to under one roof. It is covering about 2059292 lac sq. ft. in 18
states across India. Each store gives you international quality goods and prices hard to match.
The cost benefits that are derived from the large central purchase of goods and services are
passed on to the consumer. Investment Rational com Behtar Retail sells ready-made apparels
(including its own brands) and wide range of household merchandise and other consumer
goods such as footwear, toys, watches, toiletries, grocery items, sports items, crockery, gift
and novelties. Behtar is value Retail Company catering to middle and lower middle income
groups. As Apparel segment contributes 63 percent; it has plans to focus more on FMCG. To
reduce cost, Behtar does in-house production of apparels, Procurement of goods directly
procurement of goods from the small and medium size vendors and manufacturers. Efficient
Logistics and distribution system along with customized product mix at stores depending on
the regional customer behaviour and preferences. Plans of penetrating deeper into Tier 1 and
Tier 2 cities to bank upon early mover advantage, where organized retail is yet to make a
significant mark, which will help establish and build customer loyalty prior to other players.
Higher margins of around 5-6 percent in private labels which account for 10 percent of sales
in FY07.

Vision

The past 2-3 years have seen a number of developments in the retailing business in India. The
entries of corporate houses like RPG, Tata’s and Piramals have increased the capital
availability in the market. Bigger players like Shoppers Stop are in a position to take
advantage of their sizes in dealing with the manufacturers. Despite a slowdown in the
economy, queues at the stores are not decreasing. Retail sector is bound to grow in the
coming years. But how much and in what direction are the questions that need to be
evaluated. Various agencies have made different estimates of the size of organized market.
The one thing in common amongst these estimates is that the Indian organized Retailing
industry will be very big. The status of the industry will depend a lot on external factors like
Government regulations and real estate prices, besides activities of the retailers and demands
of the customers. Based on our analysis of present trends, and development of retailing
elsewhere, we present our perspectives and snapshots of organized retailing, as it would exit
in upcoming years.
 CHAPTER 3: THEORETICAL BACKGROUND OF THE STUDY

Despite the importance of India as a country that produces many specialty goods, such
as seasonings, that are traditionally exported, the retail sector was long directed primarily to
satisfy the basic needs of the Indian people. Thus, the supplying of grains and pulses at low
prices was the main concern of retail companies. To compensate for the shortcomings of a
planned economy, the government was predominately engaged in the distribution of goods.
Because of this limited focus on consumers and the sheer size of the country, most Indian
consumers buy products to meet their daily needs in small stores (kirana stores), at wet
markets and in bazaars near their living and working areas (Sengupta 2008). For decades,
large retail formats such as supermarkets or malls were nearly unknown. Instead,
government-run public distribution stores (PDS), fair price shops and co-operative stores
have long been the prevailing retail formats, especially in rural India.

In PDS, chiefly wheat, rice, sugar and kerosene are sold. These stores are more or less
sufficient instruments of the government’s economic policy for ensuring the availability of
staple foods to the public at affordable prices (Ahluwalia 1993; Howes/Jha 1994). Regardless
of whether this retail model is considered to be old-fashioned, food shortages and inflation of
food prices in recent years have led the government to reinforce its endeavours to strengthen
the PDS system. Other important retail formats for Indian consumers have included paan-bidi
shops, traditional convenience stores, street vendors and mobile vendors (Sengupta 2008).
The history of modern retailing and organised retail in India began earlier than is often sup-
posed. In 1971, India’s first “supermarket” was opened, in the form of Nilgiris at Bengaluru
(Sengupta 2008). Modern Indian retail incorporates the concept of self-service and includes a
chain of stores that are operated with modern management techniques. In the late 1970s, the
number of brands, especially of daily cosmetics and sanitary articles, increased sharply
(Sengupta 2008). This widening of the product range has intensified competition among
manufacturers for shelf space in all retail formats.

Apart from these early attempts, the modern retail sector in India took shape mostly at
the beginning of the 21st century, when some domestic retailers set up their supermarket
concepts. The sector gained significant momentum in 2006, when the Indian retail market
was opened for FDI. In January 2006, the Indian retail market was opened for foreign
companies to own up to 51 % in single-brand retail and 100 % in wholesale and cash and
carry. For several years, multi-brand retail for foreign firms was restricted, leading to
operations through franchises with Indian partners, such as Wal-Mart with Bharti Enterprises.
In summer 2010, paramount steps were taken. In the near future, foreign retailers will be
permitted to hold 49 % of multi-brand retail in India. This change resulted from the
expectation that further liberalisation might improve the disastrous existing infrastructure. In
August 2010, the Consumer Affairs Ministry recommended that “A significant chunk of
investments should be spent on back-end infrastructure, besides logistics and agro-
processing” (Menon 2010). There are no reliable sources by which to assess the development
of retail sales and retail formats since 2000, but it can be said that some retail formats, such as
supermarkets, have increased their store numbers tenfold between 2001 and 2006

In spite of the partial liberalisation of the market, the subsequent market entry of
several retailers and new options for purchases, the buying patterns of the Indian consumer
have not changed completely. In fact, the typical Indian consumer still buys in small shops in
his/her neighbourhood (Anonymous 2007). Only 10 % are willing to travel more than five
kilometres to purchase apparel. This pattern is reflected by the low share of organised retail.
The key question is whether organised retail will be able to raise its market share
considerably. The success of this attempt is correlated with the progressive adoption of new
retail formats by Indian consumers. However, it is unclear whether they will adopt the new
retail formats. One empirical study has focused on the question of whether Indian consumers
are likely to move from kirana stores to organised retail (Goswami /Mishra 2009). The study
concluded that customer patronage of grocery stores is positively related to location, home
shopping options, cleanliness and special offers.

To sum up, since liberalisation in 2006, the Indian retail market has experienced a
remarkable shift from small stores to modern large-scale formats such as
supermarkets/hypermarkets, specialty stores, department stores, factory outlets and
discounters. All of these concepts can be summarised under the label “organised retail”.
Despite the enduring dominance of small stores in India, these new retail formats have
increased their market shares. Although the global financial crisis has lowered the optimism
of both domestic and foreign retailers, they are still confident that they will succeed, at least
in the medium term.
INDIAN RETAIL SCENARIO:

Retailers in India have to experiment with formats maintaining scalability in terms of

segments, along with deepening penetration levels.

Traditionally Indian Retail can be traced back from Weekly Markets, Meals, and
Village Fairs in Small towns and villages to Kirana stores, PDS outlets, Khaki Bhandaar, co-
operative stores in urban cities. The wave of retail began with various textile manufactures
like Bombay Dyeing, Raymond’s, SKumar’s, and Grasim foraying into selling the product
through their outlets and competition among FMCG players driving the forces towards
retailing. The evolution of retailing lead to an emergence of various formats like Shopping
malls, Super-marts, Hyper-marts, Departmental Stores, Apparel Stores, etc. catering to
majority all sectors of society providing the all-important 3Vs – Value, Variety and Volume.

India is the country having the most unorganized retail market. Traditionally it is a
Family’s livelihood, with their shop in the front and house at the back, while they run the
Retail business. More than 99% retailers function in less than 500 square feet of shopping
space. Global retail consultants KSA Technopak have estimated that organized retailing in
India is expected to touch Rs 35,000 crore in the year 2005-06. The Indian retail sector is
estimated at around Rs900,000 crore, of which the organized sector accounts for a Mere 2 per
cent indicating a huge potential market opportunity that is lying in the waiting for the
consumer-savvy organized retailer .Purchasing power of Indian urban consumer is growing
and branded merchandise in categories like Apparels, Cosmetics, Shoes, Watches, Beverages,
Food and even Jewellery, are slowly becoming lifestyle products that are widely accepted by
the urban Indian consumer. Indian retailers need to advantage of this growth and aiming to
grow, diversify and introduce new formats have to pay more attention to the brand building
process. The emphasis here is on retail as a brand rather than retailers selling brands.

The focus should be on branding the retail business itself. In their preparation to
face Fierce competitive pressure, Indian retailers must come to recognize the value of
building their own stores as brands to reinforce their marketing positioning, to communicate
quality as well as value for money. Sustainable competitive advantage will be depended on
translating core values combining products, image and reputation into a coherent retail brand
strategy.
 CHAPTER 4: DATA ANALYSIS

Table 1: Type of Store

Type Percentage
organized 32%
unorganized 68%

Chart 1: Type of Store

32%

organized
unorganized

68%

Interpretation:

From the above graph it is observed that 68% of the retailer manage unorganized store and
32% manage organized store.
Table 2: Type of Pricing Strategies Applied

Pricing Strategy Percentage

Psychological 46%
Geographical 32%
Discriminating 22%

Pricing Strategy

46%
50%

40% 32%

30% 22%

20%

10%

0%
Psychological Geographical Discriminating

Interpretation:

From the above graph is it observed that, the industry use 46% of psychological strategy,
32% of geographical strategy and 22% of discriminating strategy for pricing.
Table 3: Type of Product

Types of
product Percentage
FMCG 65%
Durable Goods 35%

Types of product

35%

FMCG
65%
Durable Goods

Interpretation:

From the above graph it is observed that, 65% of the stores deal with FMCG products and
35% deal with durable goods.
Table 4: Group of consumer

Consumer Group Percentage

High Income 26%
Middle Income 41%
low Income 33%

Consumer Group

41%
45%
40% 33%
35%
26%
30%
25%
20%
15%
10%
5%
0%
High Income Middle Income low Income

Interpretation:

From the above graph it is observed that, the industry mainly concentrate on middle income
group of people i.e. 41%, 33% of it is concentrated on low income group of people and 26%
is concentrated on high income group of people.
Table 5: Promotional Activities

Promotional Activities Percentage

Advertising 46%
personal selling 32%
Sales promotion 22%

Promotional Activities

46%
50%

40% 32%

30% 22%

20%

10%

0%
Advertising personal selling Sales promotion

Interpretation:

From the above graph it is observed that, 46% advertise is carried out, 32% personal selling
and 22% sales promotion is done as promotional activities.
Table 6: Preferred type of advertising channel

Preferred Channel Percentage

Print Media 40%
Broadcasting media 60%

Prefered Channel

Broadcasting media 60%

Print Media 40%

0% 10% 20% 30% 40% 50% 60%

Interpretation:

From the above graph it is observed that, 60% prefer broadcasting media and 40% prefer
print media for advertising
Table 7: what you concentrate more on?

Concentration percentage
customer satisfaction 79%
profit making 21%

Concentration

21%

customer satisfaction
profit making

79%

Interpretation:

From the above graph it is observed that, 79% of the supermarket concentrates on customer
satisfaction and 21% on making the profit
Table 8: Factors affecting Pricing policy

Factors affecting Pricing policy Percentage

Compititor 48%
Demand 34%
Technology 18%

Factors affecting Pricing policy

18%

Compititor
48%
Demand
Technology
34%

Interpretation:

From the above graph it is observed that, 48% of competitors, 34% demand, 18% technology
affect the pricing policy.
Table 9: Reason for coming to the store

Reason Percentage
Value for money 10
Discounts 20
Product range offerd 15
Nearby 40
Saving of time 12
Other 3

Reason
40%
40%
35%
30%
25% 20%
20% 15%
12%
15% 10%
10% 3%
5%
0%
Value for Discounts Product Nearby Saving of Other
money range time
offerd

Interpretation:

From the graph it is observed that, maximum numbers of respondents are coming to the store
because it is near to their home.
Table 10: Shopping daily items apart from behtar supermarket.

Other Place Percentage

Big bazar 32
Globus 7
Shopper's stop 8
Subiksha 6
local markets. 38
other. 9

Other Place
38%
40%
32%
35%
30%
25%
20%
15% 9%
7% 8%
10% 6%
5%
0%
Big bazar Globus Shopper's Subiksha local other.
stop markets.

Interpretation:

From the above graph it is observed that, maximum of them shop from local market i.e. 38%,
35% shop from big bazar.
 CHAPTER 5: FINDING, SUGGESTION AND CONCLUSION

FINDINGS:

 In this study we found that in today’s world more than 50% of the total population is
interested in shopping from organized retail stores.
 48% of competitors, 34% demand, and 18% technology affect the pricing policy.
 79% of the supermarket concentrates on customer satisfaction and 21% on making the
profit
 Organized sector is adopting better and planned marketing strategies to attract its
customers.
 Various strategies are also adopted by the unorganised retail group but it is not up to
the mark or we can say it is less attractive as compared to organized marketing
strategies.

SUGGESTION:

 As organized retailers are using the marketing strategies unorganized sector should
also concentrate on their marketing strategies so that customer could attract towards
them.
 Customers generally prefer multi-brands counter because lots of product can e seen at
on one place, so unorganized could also adopt this technique.
 Unorganized retailers should also concentrate on the need and satisfaction of the
customer.

More intense research work should be initiated, studying the specific needs and attributes
sorted by the customer for different kinds of product categories.
CONCLUSION:

Finally it is important to note that these strategies are not strict independent of each other ;
Value is function not just price , quality and services but can also be enhanced by
personalization and offering a memorable experience. In fact, building relationships with
customer can itself increase the quality of overall customer experience and thus the perceived
value. But most importantly for winning in this intensely competitive marketplace, it is
critical to understand the target customer’s definition of value and make an offer , which not
only delights the customer but also difficult for competitors to replicate.
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https://www.slideshare.net/hemanthcrpatna/a-project-report-on-retail-industry-in-india

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