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About Us
Spencer’s Retail Limited is a multi-format retailer providing a wide range of quality products to discerning young customers well-travelled citizens of the world, looking out for authentic flavors and experiences in a fun-filled shopping environment. Our brand positioning – Taste the World – embodies this approach, delighting shoppers with the best that the world has to offer in terms of interiors, ambience and merchandise. Part of the Rs 15,500 crore RPG Group, we run about 250 stores (including about 29 large format stores) across 50 cities in India, employing more than 6,000 people. As one of the earliest entrants in the retail space in India, we have been instrumental in introducing Indian consumers to the concept of organized retailing, becoming the country’s first grocery chain back in 1920, and offering the joys of hypermarket shopping in 2001. A “food first” retailer we offer both fresh and packaged foods as well as groceries. We also have a wide selection of electronics and electrical equipment, home and office essentials, garments and fashion accessories, toys, and personal care.

About Us : Heritage

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Heritage
Since 1863, Spencer’s has been a part of the Indian retail landscape. At one time, the Spencer’s Empire stretched from Peshawar to Cochin, from Karachi to Chittagong, spanning the length and width of undivided India. Originally owned by a British gentleman – yes, there was a Mr. Spencer (John William Spencer, to be precise) – it acquired Indian ownership in the 1960s, and became part of the RPG Group in 1989. In 1995, RPG Enterprises, the flagship company of the RPG Group, launched Foodworld as a joint venture with Hong-Kong based Dairy Farm International. The joint venture, which operated supermarkets under thename “Foodworld” and hypermarkets under the name “Giant”, was terminated in 2006. RPG retained 48

of the 93 stores it owned. These were re-furbished and their launch under the brand name, Spencer’s, kicked off a new phase in both the history of the Spencer’s brand, and the retailin India. Since inception Spencer’s has been a consumer-centric brand, constantly innovating, pioneering formats, evolving over time but always keeping consumer needs and satisfaction center-stage. Back in 1920, we were the first grocery chain in India. In 1980, we became the first supermarket chain, and in 2001, we introduced India to the joys of hypermarket shopping. What has remained unchanged almost 150 years is the trust the Spencer’s brand evokes. To the consumer, it carries the promise of innovation, quality, and service; the confidence that they will always be able to find a Spencer’s at a convenient location; that it will have a pleasant ambience; and that it will offer a wide range of products at affordable price

About Us : Differentiators.

Home : About Us : Differentiators

Differentiators
In the Indian milieu, there are only two routes to survival – discounting and differentiation. Most retailers choose to play the price game. We, however, preferred to focus instead on establishing ourselves as the preferred shopping destination for discerning young customers looking for a range of quality products that let them participate in a global lifestyle. Our brand positioning – Taste the World – embodies this unique approach, promising consumers a fun-filled shopping environment with the best that the world has to offer in terms of interiors, ambience and merchandise. The following characteristics distinguish the Spencer’s brand and create memorable 360° shopping experiences for consumers:

• Products – we offer the widest range of food and lifestyle (fashion, home, entertainment) brands, with a special expertise in food • Quality – we lay a huge emphasis on all-round quality: in products, stores, service standards, and customer engagement programs • Heritage – we are India’s oldest retailer, with many firsts to our credit • Multiple Formats – from daily to weekly and specialty shopping, we fulfill every need and provide maximum convenience • Promotions – we seek to offer the right products at the right time at the right price, with promotions carefully designed to suit the buying cycle and shopping basket of the consumers • Brand Imagery – our stores and staff seek to make our customers feel right at home, being international, contemporary, accessible, empathetic and trusted

Differentiators
In the Indian milieu, there are only two routes to survival – discounting and differentiation. Most retailers choose to play the price game. We, however, preferred to focus instead on establishing ourselves as the preferred shopping destination for discerning young customers looking for a range of quality products that let them participate in a global lifestyle.

Our brand positioning – Taste the World – embodies this unique approach, promising consumers a fun-filled shopping environment with the best that the world has to offer in terms of interiors, ambience and merchandise. The following characteristics distinguish the Spencer’s brand and create memorable 360° shopping experiences for consumers:

• Products – we offer the widest range of food and lifestyle (fashion, home, entertainment) brands, with a special expertise in food • Quality – we lay a huge emphasis on all-round quality: in products, stores, service standards, and customer engagement programs • Heritage – we are India’s oldest retailer, with many firsts to our credit • Multiple Formats – from daily to weekly and specialty shopping, we fulfill every need and provide maximum convenience • Promotions – we seek to offer the right products at the right time at the right price, with promotions carefully designed to suit the buying cycle and shopping basket of the consumers • Brand Imagery – our stores and staff seek to make our customers feel right at home, being international, contemporary, accessible, empathetic and trusted

Innovations

Home : About Us : Innovations

Innovations
Throughout its long history (the first ever Spencer’s store opened in 1895), Spencer’s has been a recognized and respected player in the Indian grocery business, synonymous with quality goods and services, trusted by India’s exploding population of the upwardly mobile middle class. Spencer’s has continually helped reshape the retail landscape in India, introducing a host of innovations to make shopping even more convenient and enjoyable for the consumer. These include:

Retail Design Initiatives
The Retail Design team helps Spencer’s deliver its brand promise in a way that is sophisticated, but not snobbish. This results in differentiation without alienation of loyal customers or loss of the brand equity acquired over the years. Central to the retail design strategy is a unique brand position - Taste the World, derived from the consumer’s own transition from a price-conscious purchaser to a global-minded, well-travelled citizen of the world, looking out for authentic international flavors and experiences. Spencer’s has consequently evolved from being a preferred grocery retailer to being a passport to a stimulating world. This is evident in: • Storefront Design – the store entrance resembles that of an entrance arch, leading in the shopper to a world that

An Eiffel Tower and Big Ben here. and red for furniture and home goods) make for easy navigation. and cheese denote the fish counter and delicatessen.Hotspots and focal points around the store carry thematic product displays to welcome shoppers and give them the opportunity to pause and absorb the ambience that constitutes a “Taste the World” experience. blue for electronics and multimedia. the joy of exploring and the convenience of locating what they want • Shopfit Design – from chef’s tables to signage aids. •Edutainment Booklets – Want to serve wine but not sure how? Want a recipe for preparing cheese fondue? Curious to know why organic food is supposed to be better for you? Pick up a booklet and find out. . Kolkata. and expansive feel • Graphics & Signage . and Lighting . the new retail design program is being implemented at all stores. Finishes. breads. right? Wrong. before continuing their journey of exploration. This is evident in: • Feature Displays . cheerful. • Presentation of Merchandise . and lowmaintenance presentation of modern. these tell you a little more about the products on offer and how to use them. our food innovation wing researches world cuisines and develops recipes for a wide range of popular and trendsetting dishes. a Chinese pagoda and Thai hut there .frame highly stylized displays at focal points. space-efficient. while visual metaphors of “farm-fresh” and “Taste the World” drive home our brand promise. an upscale look and feel. and category-specific color arches suspended over zones and departments to provide visual relief and act as navigational aids Originally rolled out at the Spencer’s hypermarket at South City Mall.Category-specific color coding (fresh green for food. Visual Merchandising Initiatives The Visual Merchandising program uses a mix of theatre and edutainment to depict Spencer’s as a “Food First” retailer with a “Taste the World” mindset. While we do stock popular ranges. we go to a great deal of effort to ensure you a unique range of products •Gourmet Centre .from color-corrected lighting warming up the foods and vegetables area. our store interiors have a fresh.Run by an expert Food Scientist cum Cordon Bleu Chef. sophisticated violet for fashion. for those who’d like to prepare the dishes at home. international goods alongside local flavors and product experiences • Innovative Use of Materials. enhanced by bright orange “Heritage boards” that tell the Spencer’s story. pickles and jams.is welcoming and exciting • Interior Design – to ensure that shoppers enjoy a warm and friendly ambience. These form the basis for developing our own range of products. and Swiss coffee. From the story of olive oil to the origins of cocktails. which include delicious cookies and sauces. color palette of bright orange.shopping at Spencer’s is a visual treat. the emphasis is on attractive. Fiberglass models of aquatic food. Ingredients for these dishes are also retailed through our stores. white. to carefully selected veneers and textures that complement the attractive. curved signage featuring the signature “Taste the World” tagline. Product Initiatives All supermarkets and hypermarkets sell the same things.

Seafood lovers. If you want to taste the world then a visit to Gourmet Centre at Spencer’s.Live Counters with Master Chefs preparing gourmet delights are always popular at buffets … we .Kolkata’s first Gourmet store is spread over an area of 1500 sq. 60 variants in vegetarian and non-vegetarian convenience foods. in fact. biscuits. 500 different types of beverages. The store offers a wide range and assortment of gourmet breads. The products serve as ingredients to cuisines of Thailand. be sure to take your pick from the live fish-tanks on display. Indonesia. the first Indian retailer to offer a selection of Wine & Spirits in its stores. • Live Kitchen . 100 variants chilled & frozen food items.•Meat. It is has more than 4000 products to choose from and offers the finest ingredients of gourmet cuisine and recipes to guide in the making of lip smacking delicacies from across the world.Wine ignoramuses or aficionados … we cater to both. ft. Spencer’s was. Chicken. 200 variants of 300 types of cheese. oils and vinegars. and the first to present an in-store wine and cheese tasting experience to shoppers. Italy. South city hyper is a must Store Event Initiatives In-store event initiatives ensure that a visit to Spencer’s is always a memorable experience. 300 types of pastas and noodles. Sri Lanka and UK to name a few. Argentina. exotic and organic fresh fruits and vegetables. Spain. •Gourmet store . •Wine & Spirits . China. Chile. cold-cuts. chocolates. with a wide range of wines expertly selected from as many as 181 countries. France. Fish . America.our counters for fresh non-vegetarian items truly represent the finest fresh cuts a shopper can get.

swirl or savoury. India Retail Forum. Convenience and Express Formats”.• Modern Menu – Footsore and still not done with your shopping? Stop by at our food court and treat yourself to a shake. Awards VMRD award Food Forum of India India Retail Forum Spencer’s was awarded the first runners-up in the Visual Merchandizing Category at the Instore Asia. 2007 India Retail Forum “Turnaround Retailer of the Year”. 2006 . 2008 “Most Evolved Retailer of the Year”. 2009 Coca Cola Golden Spoon “Most Admired Food & Grocery Retailer.

Hyderabad. Chad Valley. for retailing their internationally acclaimed toy brand. to set up the Foodworld chain of supermarkets in India First Foodworld store inaugurated in R A Puram. the Boston-based fast casual dining and bakery caf é chain having more than 200 outlets in America.000 sq ft flagship store inaugurated at South City Mall. Chennai 2008 75. South Korea. Subbulakshmi. Kolkata First standalone store inaugurated at Vadodara Exclusive tie-up with £ 3 billion Woolworths plc. Taiwan and Thailand Alliance with Beverly Hills Polo Club – its first international tie-up in fashion 2009 Launch of first Shop-in-shop Gourmet store in Kolkata Launch of first standalone Fish-n-meat store in Kolkata Launch of first hyper of the state of Tamil Nadu in Tiruchirapalli Acknowledgement . by Krishna Yadav.. Chennai. and their Ladybird brand of kidswear. renowned Karnatic musician First hypermarket inaugurated in Musheerabad.Milestones 1863 1920 1980 1989 1995 1996 2001 John William Spencer and Charles Durrant open the first ever Spencer store in Chennai Spencer’s becomes the first grocery store in India Spencer’s becomes the first supermarket chain under Food World in India RPG Enterprises buys a majority stake in Spencer’s Spencer’s enters into a Technology Assistance Agreement with Dairy Farm International Holdings Ltd. S. UK. the latter is Woolworths first international tie-up in the children’s apparel segment Tie-up with Au Bon Pain. Hong Kong. by M. Labor Minister of Andhra Pradesh 100th Foodworld store inaugurated in Pondicherry 2006 Joint venture with Dairy Farm International Holdings terminated First new store under the Spencer’s brand name inaugurated in West Mambalam.

. apparel etc to adopt this trend. industrial engineering. use. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. accounting.ening of zonal regulat Introduction India’s retail market which is seen as THE GOLDMINE by global players has grabbed attention of the most developed nations.) of which organized retailing is only around 3 percent i. However. Even though this concept has been in existence in few retail segments like pharmaceuticals and fuel. restraining international retailers' entry. The trends in the rural market also have been changing from the old Haats and Melas to the rural malls like ‘Chaupal Sagar’ launched by ITC. APICS The Association for Operations Management also defines operations management as "the field of study that focuses on the effectively planning. and control of a manufacturing or service organization through the study of concepts from design engineering.000 crore INR approx).The future of Indian retailing may even witness the concept of 24 hour retailing. production management. DCM Shriram Groups one-stop shopping destination called ‘Hariyali Bazaar’. the distribution of goods and services to customers. Fundamentally. a mean age that reinforces spending across all the retailing channels of grocery. Study of Operations at Retail Industry The urban retail market has been embracing various new formats and the malls turned out to be the trend setters by promising the concept of shoppertainment. Retail industry in India is at the crossroads. it still remains to be a challenge for other segments like food and groceries. it cannot simply ignore the competition from the conventional stores because of various factors like reach.Although the organized retailing in India is coming up in a big way. 00.” Retail is India's largest industry. It is the management of resources. It requires the effort of many individuals. ushering in a revolution in shopping in India. and other functions as they affect the organization". Consumers aged 20-45 years is emerging as the fastest growing consumer group and the mean age of Indians is now pegged at 27. scheduling. the set of value-added activities that transform inputs into many outputs. This is no wonder to the one who knows that the total Indian retail market is US $350bn.Non-store retailing is expected to continue its fast-paced growth from a miniscule base.“Retailing includes all activities involved in selling goods or services directly to final consumers for personal. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing. Govardhan Jayanthi for giving us the opportunity to unde Study of Operations at Retail Industry Executive Summary Demographics continue to show a positive report to spur retailing growth. org shopping has altered in terms of format and consumer buying behavior. entertainment and food all under one roof. Across all channels. accounting for over 10 per cent of the country's GDP and around eight per cent of the employment. The Operations Management Body of Knowledge (OMBOK) Framework defines the scope of operations management and the activities and techniques that are a part of the operations management profession. growth in retailing is expected to be boosted heightened competition during the forecast period due to the growing. Godrej groups agri store ‘Adhar’ etc. US $8bn (36. there was gradual economic reform. extending credit facility and other intangible factors like the human touch which are provided only by the conventional stores. these value-adding creative activities should be aligned with market opportunity for optimal enterprise performance. quality management. management information systems.The presence of 15million kirana stores brings into light the very fact that the Indian retail industry is highly fragmented/ unorganized.Operations also refer to the production of goods and services.A task or project cannot be completed alone.I express my sincere gratitude to Prof. inventory management. multi-storeyed malls and huge complexes offer shopping. The government stance of protecting local retailers and prohibiting 100% foreign direct investment in retailing continued in 2005. Introduction to Operation Management Operations management is an area of business that is concerned with the production of good quality goods and services.Additionally.e. giving way to easier and faster franchising agreements as well as the loos franchising agreements as well as the loosening of zonal regulations on retail expansion. Modern retail has entered India as seen in sprawling shopping centers. and involves the responsibility of ensuring that business operations are efficient and effective. (16. thus stimulating retailing. non-business use. Retailing in India is gradually inching its way toward becoming the next boom industry. non-grocery and non-store.000 crore INR approx. I take this opportunity to thank all those who helped me complete this project.

or the customer itself.the facilities and staff of the operation. to deliver you to the awaiting plane.  Information A tourist office gathers and provides information to holiday makers. products and delivery systems. who takes some wood. and assists in advising on places to stay or visit. Another way of looking at an operation is to consider it as a transformation process. eat. timing. availability How do you decide which product to produce? How do you find out what attributes your product should have? How do you get those attributes into your product? •What process? •What resources do you need? •Where do you get those resour Examples of Operations Decisions Operations managers must make decisions on three levels  Strategic  Tactical  Operating .  Raw Materials An obvious example is a cabinet maker. price. 1. service. it is a central activity in organizing things.Managing and controlling the operations system. 2. Product. they convert a set of resources (INPUTS) into services and goods (OUTPUTS). Operations Management is all about providing customers with products and services. read or knock about on the sports field comes to you courtesy of the operations managers who organized its production.. place. moving from ticket desk through the customs and duty-free areas. sit on. The operation you are involved in is about processing your ticket and baggage.  Customers At an airport. This definition reflects the essential nature of Operations Management. Everything you wear.. These resources may be raw materials. information. every treatment you receive at the hospital. Every book you borrow from the library. use. You survive by giving customers with what they want Every Product or Service is really a bundle of different attributes. every service you expect in the shops and every lecture you attend at university all have been produced.Finding ways to improve operations. quality. you are one of the many resources being processed. These resources are transformed into the final goods or services by way of other 'transforming' resources . and then polishes it until a piece of furniture is produced. Operations are a transformation process. Extending the process. etc. Customers are looking for a bundle of characteristics Total bundle provides the level of value customers deem appropriate Buying products with the attributes they want at the lowest price possible •Attributes •Price •Quality •Image •Performance •Safet •Place – distribution •Time – delivery. Operations is about designing services. If we add a few more parts to the transformation process. cuts and planes it. we can see the key elements that operations managers need to consider.Operations as a Transformation Process Inputs ⇒ Transformation ⇒ OutputOperations management is about the way organizations produce goods and services. performance.

Englishmen are great soccer enthusiasts. In simple terms it involves activities whereby product or services are sold to final consumers in small quantities.STRATEGIC DECISIONS:  Longer term decisions  Usually made at the senior management level  Product and service strategy  Competitive priorities  Positioning strategy  Location. it has been confined for along time to family owned corner shops. capacity  Long term partnershipsces? • TACTICAL DECISIONS  Medium term decisions  Tactical in nature  Made by middle and senior managers  Process design  Technology management  Job design and workforce management  Capacity management  Facility location  Facility layout OPERATING DECISIONS  Shorter term decisions  Made at middle and lower management levels  Forecasting  Materials management  Inventory management  Aggregate planning  Master production scheduling  Production control  Scheduling What is Retail? The word 'retail' is derived from the French word 'retaillier' meaning 'to cut a piece off' or 'to break bulk'. Although retailing in its various formats has been around our country for many decades. and they strongly think that one .

consumer demand has shifted & retailers' operating systems today are infused with far more technology than was the case six years ago. The top 200 retailers alone accounts for 30 % of the worldwide demand. increased commuting time. The ratio of organized The emergence of organised retailing in India is a recent phenomenon and is concentrated in the top 20 urban towns and cities. The global economy has changed. Indian retailing today is at an interesting crossroads.000 Crore and the sector average growth is showing an upward pattern. while the Value element still dominating the buying decisions. greater work pressure. Report published by McKinsey & Co. The global retail industry has traveled a long way from a small beginning to an industry where the world wide retail sales is valued at $ 7 x 10 5 Crore.should never give Indians a corner. Although there are around 5 million retail stores in India. While the retailing industry itself has been present since ages in our country. China on the other hand has attracted several global retailers in recent times. little has remained same over the last decade. The retail sales are at the highest point in history and new technologies are improving retail productivity. The emergence of retailing in India has more to do with the increased p of modern supply and distributions solution.4 Crore & US $ 160 Crore respectively. On the global Retail stage. That is how great Indians retail management skill is considered. The emergence of organised retailing in IUS $ 7 trillion. and increase in economies of scale. increase in product variety. influence of western way of life etc. The Asian economies (excluding Japan) are expected to grow at 6% consistently till 2005-06. It stems from the belief that. have meant that the needs and wants of consumers have shifted from just being Cost and Relationship drive to Brand and Experience driven. The Reason This emergence of organized retailing has been due to the demographic and psychographic changes taking place in the life of urban consumers. changing values and Lifestyles. Other than Wal-Mart's dominance. One of the few similarities with today is that Wal-Mart was ranked the top retailer in the world then & it still holds that distinction. Global Scenario Retail stores constitute 20% of US GDP & are the 3 rd largest employer segment in USA. while in Asia it comes to around 20 to 80. The Facts Retailing in more developed countries is big business and better organized that what it is in India. Retail sector employs 7% of the population in China. Retail turnover in the EU is approximately Euros 2. though there are many opportunities to start a new retail business. it is only the recent past that it has witnessed so much dynamism. there's a little about today's environment that looks like the mid-1990s. or less. Growing number of nuclear families. In India the scenario is quiet unique. 90% of these have a floor space area of 500 sq. Scenario of Retailing in India Retailing is the most active and attractive sector of last decade. working women. in Europe it is 70 to 30. organized retailing accounts for a mere 5% of the total retail sector.00.ft. especially post-liberalization. Wal-Mart & Carrefour had sales of US $ 70. if you give an Indian a corner he would end up setting a shop. Major retailers like Wal-Mart & Carrefour have already entered the Chinese market. retailers are facing numerous challenges. with the aid of modern supply and distributions solution. in partnership with Confederation of Indian Industry (CII) states that the global retail business is worth a staggering retailing to unorganized in US is around 80 to 20.urchasing power of buyers.Indian retailing KEY CHALLENGES: . In the year 2003.

000 crores * Organized market: Rs. ft. and is typically the prime consideration in a customer’s store choice. The importance of pricing decisions is growing because today's customers are looking for good value when they buy merchandise and services. as it decides what finally goes on shelf of the store. Price is the easiest and quickest variable to change.000. 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. ft. The purchasing power of the customers has increased to a great extent. 4) TARGET AUDIENCE: "Consumer the prime mover""Consumer Pull". When formulating decision about where to locate. the retailer must refer to the strategic plan: * Investigate alternative trading areas. 35. of retail space * Over 400. The cost of business operations is very high in India. * 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 central to the strategic thrust of the retailing firm.000 sq. of mall space under development * The top 3 modern retailers control over 750. seems to be the most important driving factor behind the sustenance of the industry. PRESENT INDIAN SCENARIO * Unorganized market: Rs.000 crores (US$ 7 Billion) or more by 2005-06 Major players . Right choice" Location is the most important ingredient for any business that relies on customers. which are carried out in the business. 5) SCALE OF OPERATIONS: Scale of operations includes all the supply chain activities. 583. with the influencing the retail industry to a great extent.5. 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. however. 000 crores * 5X growth in organized retailing between 2000-2005 * Over 4. It is one of the challenges that the Indian retailers are facing. the most important function for any retail organization. time and quantity that enable the retailer to reach its goals.000 sq.000 shoppers walk through their doors every week * Growth in organized retailing on par with expectations and projections of the last 5 Years: on course to touch Rs. Merchandising consists of activities involved in acquiring particular goods and services and making them available at a place. Merchandising is perhaps.1) LOCATION: "Right Place. a variety of other factors also seem to fuel the retailing boom.000 new modern Outlets in the last 3 years * Over 5.

4. Bombay Dyeing. India is on the radar of Global Retailers and suppliers / brands worldwide are willing to partner with retailers here.Vivek's.Globus. Apna Bazaar: It is a Rs 140-crore consumer co-operative society with a customer base of over 12 lakh.Fashion . 3. German giant Metro AG and South African Shoprite Holdings have already made headway in this segment by setting up stores selling merchandise on a wholesale basis in Bangalore and Mumbai respectively. ITC. Margin Free: It is a Kerala based discount store.Rajiv's.Pyramid . Indian consumers are rapidly evolving and accepting modern formats overwhelmingly.Food and grocery.Nilgris . Retail Space is no more a constraint for growth. Raheja. These new-format cash-and-carry stores attract large volumes from a sizeable number of retailers who do not have to maintain relationships with multiple suppliers for all their needs INDIAN RETAIL IS MOVING INTO SECOND GEAR 1) FIRST GEAR: (Create awareness)* New retailers driving awareness* High degree of fragmentation* Real estate groups starting retail chains* Consumer expecting 'value for money' as core value 2) SECOND GEAR: (Meet customer expectations)* Consumer-driven* Emergence of pure retailers 3) THIRD GEAR: . Murugappa & Piramal Groups etc and also foreign investors and private equity players are firming up plans to identify investment opportunities in the Indian retail sector. the IMAGES-KSA report says that the last few years have seen rapid transformation in many areas and the setting of scalable and profitable retail models across categories. Big Bazaar-Pantaloons: Big Bazaar.Adani. large Indian corporate groups like Tata.SubhikshaWestside . plans to cater to an upwardly mobile urban population. which has potential for rapid growth. and over INR 20.8 Crore for the year 2002-03.Planet M. Food World: Food World in India is an alliance between the RPG group in India with Dairy Farm International of the Jardine Matheson Group.Others. Investments into the sector are estimated at INR 2000 .. 5.000 Crore by end of 2010. In the year 2. Trinethra : It is a supermarket chain that has predominant presence in the southern state of Andhra Pradesh. Tamil Nadu and Karnataka. The quantum of investments is likely to skyrocket as the inherent attractiveness of the segment lures more and more investors to earn large profits. Wholesale trading is another area.Shoppers' Stop. Few of India's top retailers are: 1. Their turnover was Rs 78. which is uniformly spread across 240 Margin Free franchisees in Kerala. Reliance.Life springLet us look at the evolution process Detailing reasons why Indian organized retail is at the brink of revolution.Food world.Crossw Globus.Life springord Study of Operations at Retail Industry .2500 Crore in the next 2-3 years.Music World. a division of Pantaloon Retail (India) Ltd is already India's biggest retailer. Further.Lifestyle.

 Example: Nilgiris.  Space occupied: Around 500 Sq. and above. Supermarket : A subdued version of a hypermarket.  SKUs: 20000-30000. Apna Bazaar.ft.  Example: stores located at the corners of the streets.  Space occupied: 50000 Sq .  . Reliance Retail’s Fresh and Select.  SKUs: Around 10000. Trinethra. RETAIL FORMATS: Hypermarket : It is the largest format in Indian retail so far is a one stop shop for the modern Indian shopper Merchandise: food grocery to clothing to spots goods to books to stationery.(Back end management)* Category management* Vendor partnership* Stock turns* Channel synchronization* Consumer acquisition* Customer relation's management 4) FOURTH GEAR: (Consolidation)* Aggressive rollout* Organized retail acquitting significant share * Organized retail acquitting significant share* Beginning of cross-border movement* Mergers and acquisitions  Merchandise: food grocery to clothing to spots goods to books to stationery.  Merchandise: Groceries are predominantly sold.  SKUs: 20000-30000.  Example: Pantaloon retail’s Big Bazaar.  Space occupied: 5000 Sq. RPG’s Spencers (Giant). ft. and above.  Example: Pantaloon retail’s Big Bazaar. ft. RPG’s Spencers (Giant). ft.  Space occupied: 50000 Sq . Department store : A retail establishment which specializes in selling a wide range of products without a single prominent merchandise line and is usually a part of a retail chain.  Merchandise: Almost similar to that of a hypermarket but in relatively smaller proposition. Convenience store: A subdued version of a supermarket.ft. to 3000 Sq. or more.

household accessories. books/music/gifts (Archies. Reebok). such as Pantaloon Retail. Trent India Ltd.  Example: Landmark Group’s LifeStyle. Discount store : Standard merchandise sold at lower prices with lower margins and higher volumes  Merchandise: A variety of perishable/ non perishable goods. Apna Bazaar). Kirana stores: The smallest retail formats which are the highest in number (15 million approx. Nilgiris. These usually do well in busy market places and Metros  Merchandise: Offers several brads across a single product category. Levis. however that foray has been made into a variety of new sectors. HP Speedmart) and fast-food chains (McDonalds. apparel/accessories (Pantaloon. These include lifestyle/fashion segments (Shoppers' Stop. This is slowly giving way to international formats of retailing. Specialty store : It consists of a narrow product line with deep assortment.  Space occupied: Around 10000 Sq. gifts etc. Bharti Enterprises and the AV Birla group will compete against well-established retailers. Trent. the corner grocery store was the only choice available to the consumer. MBO’s : Multi Brand outlets. Piramal’s TruMart. Crossword. drugs and pharmacy (Health and Glow. cosmetics.  Example: Viswapriya Group’s Subiksha. Shoppers’ stop.  Merchandise: Depends on the stores  Example: Bata store deals only with footwear. Westside). Crosswords. Apollo). MusicWorld. Increasing competition in the retail market: New entrants such as Reliance.) in India. Landmark). especially in the urban areas. RPG’s Music World. Vasant & Co. It is the non-food segment. Kirana stores: The smallest retail formats which are the highest in number (15 million approx. Globus. ft.) in India. also known as Category Killers. convenience stores (ConveniO. appliances and consumer durables (Viveks. The traditional food and grocery segment has seen the emergence of supermarkets/grocery chains (Food World. – 30000 Sq.).  Merchandise: Mostly food and groceries Trends in Present Retail Market: New Product Categories: For a long time. ft.  Merchandise: Offers several brads across a single product category. LifeStyle. Jainsons. Dominos).’s Westside. .Merchandise: Apparel.

Market entrants plan to invest in the entire value chain. department stores. moving goods “from the farm to the fridge at home. have already begun building a retail presence in Tier III cities before many retailers have finalized their Tier II retail operations. Reliance is planning to launch a nationwide chain of hypermarts. The population in these cities is typically well educated and willing to purchase goods and services.000 acres are used.Spencer’s and Lifestyle stores. discount stores. Private Label penetration has been on a rise. The hardware and software tools that have now become almost essential for retailing can be into 2 broad categories. Reliance Retail and Pantaloon. It is mainly growing among FMCG products in most supermarkets with groceries accounting for 45.00. manpower and farming skill without having to purchase land. contract farming represents 7 million acres thus indicating a tremendous opportunity. Contract farming enables farmers to a. These own brands also do not have to manage intermediaries since retailers maintain oversight of the supply chain. The label penetration is in a huge rise.” Viewed as India’s next “Sunrise Sector. Technology in Retail: Over the years as the consumer demand increased and the retailers geared up to meet this increase. technology evolved rapidly to support this growth. They enhance the profitability levels of product categories. These 5. Of the total Cultivable land of 400 million acres in India. Some major retailers. like Globus. Local conditions and insights into buying-behaviour shape the format choice. footwear. private labels have been gaining significance. More retailers are introducing their own brands in all categories including Food & Groceries. supermarkets. Customer Interfacing Systems: .9% Expanding to Tier II and III cities: Indian retailers are planning to extend operations into Tier II and Tier III cities as heightened IT offshoring activity in these locations have increased consumers’ disposable income. Experimenting with formats: Selecting the right retail format is essential in modern retailing. The difference between urban and rural customers is one of the reasons why multiple formats are required in India. Increase in Private Labels: With the emergence of organized retail and modern retail formats. With an estimated initial investment of USD 750 million. apparel.ccess land. Foray into Retail Agri-Business: India’s most prestigious business houses and global retailers are planning to enter retail agri-business. accessories. conven stores. No single format will be suitable for an all India strategy and selecting the relevant format is the key success factor.500 stores will be located in 800 cities and towns in India.” retailers are employing contract farming as a means of boosting their ventures. For pure corporate contracts between farmers and companies. Foreign retailers are keenly evaluating the Indian market and identifying partners to forge an alliance with in areas currently permitted by regulations. increase retailers’ negotiation powers and create consumer loyalty. only 2.

An integrated supply chain helps the retailer in maintaining his stocks. But because of the changing lifestyles and the buying habits of the consumers the retailers have been extending their operating hours till late nights. Tunnel Scanning is a new concept where the consumer pushes the full shopping cart through an electronic gate to the point of sale In a matter of seconds. Data wareho This. Operation Support Systems: ERP System Various ERP vendors have developed retail-specific systems which help in integrating all the functions from warehousing to distribution. allows the retailers to study the purchase behavior of consumers in detail and grow the value of individual consumers to their businesses. which makes the process very fast. Advanced Planning and Scheduling Systems APS systems can provide improved control across the supply chain. mail order and the Internet has provided retailers with real access to consumer data..Bar Coding and Scanners Point of sale systems use scanners and bar coding to identify an item. weekly factory scheduling and daily distribution scheduling into one overall planning process using a single set of data The major reasons behind the development of new trends are:  Scalable and profitable Retail models are well established for most of the categories  FUTURE TREND: SCOPE OF 24hr RETAILING The concept of 24hr.P. Reliance etc. preventing stock-outs and thus reducing his costs. getting his supplies on time. processes a cheque electronically by transmitting transaction information to the retailer and consumer's bank. Rather than manually process a cheque. These APS packages complement existing (but often limited) ERP packages. having digitally captured and stored the image of the cheque. along with the various available CRM (Customer Relationship Management) Systems. while servicing the customer better. Payment Payment through credit cards has become quite widespread and this enables a fast and easy payment process. They enable consolidation of activities such as long term budgeting. Internet Internet is also rapidly evolving as a customer interface.) and the other retail formats used to operate only till the early hours of the night. front and back office store systems and merchandising. monthly forecasting. all the way from raw material suppliers right through to the retail shelf. All that the consumer has to do is to pay for the goods. CRM Systems The rise of loyalty programs. the retailer voids it and hands it back to the consumer along with a receipt. retailing in India has been present only in very limited formats like the pharmaceuticals (Apollo) and fuel retail outlets (H. use pre-stored data to calculate the cost and generate the total bill for a client. . the items in the cart are hit with laser beams and scanned. Electronic cheque conversion. removing the need of a consumer physically visiting the store. a recent development in this area.

The other option for trying the concept of 24hr retailing is that the retailer can have a mobile s to happen. He added. Anyways. Rural Vs Urban Retail Trends India's largely rural population has also caught the eye of retailers looking for new areas of growth. Commenting on the Rural Retailing chapter in INDIA RETAIL REPORT 2005. said Mr. selling a variety of vegetables. Godrej Agrovet Ltd. Godrej Group's Agro and Food division. Chairman. outlet which can place itself in the areas which have substantial night traffic for the sale And once the people are to the 24hr shopping then the retail plans can be altered accordingly. fruits and vegetables. and Tata Chemicals (with Tata Kisan Sansar) setting up agri-stores to provide products/services targeted at the farmer in order to tap the vast rural market. which served as one-stop shops for farmers selling agricultural products such as fertilisers providing farmers knowledge on how to effectively utilise these products. There has been yet another initiative by the DCM Sriram Group called the ‘ Hariyali Bazaar' . Other corporate bodies include Escorts.both local and exotic thereby .Most of the Indian retail formats though capable of operating their formats round the clock do not choose to do so because of the non feasibility of the idea at present taking in conjunction the customers’ readiness. It might not be a rational prediction that all the consumers will step into the retail outlet at midnights to buy food and groceries. Adi B. groceries and some other FMCG products and test market it. the group plans to take its recently launched retail concept – Nature's Basket . that has initially started off by providing farm related inputs and services but plans to introduce the complete shopping basket in due course. Godrej Tapping the fresh farm produce sector. Godrej. "There are 8 stores already operating in Maharashtra and Gujarat and further expansion is very much on the cards. fruits and herbs . (GAVL) operates the format. This problem can be overcome by implementing the idea in places which have a floating population even during the nights like railway stations and bus stations. attempting to provide farmers a one-stop destination for all of their needs. Mr. The Godrej Group (India's one of the leading corporate majors) said that his group had also launched the concept of agristores named 'Adhaar'. offering a diverse product range from FMCG to electronics appliance to automobiles. ITC launched the country's first rural mall ‘ Chaupal Sagar' .to newer cities steadily. FDI could indeed do a lot in this sector as entry of international retailers would bring in the required expertise to set the supply chain in place which would result in elimination of wastage. However with the upcoming culture of malls and the changing lifestyles of the people one can design a small part of the store or a mall for a new 24/7 retail format which consists of the essential products like medicines. For instance if any of the hyper market or supermarket is functioning during the night the retailer has to bear the extra costs of electricity. better prices and quality for consumers and higher income for farmers besides of course farm produce retailing getting a facelift. Once if the sales start showing some consistent positive figures and if the crowd increases then the store can come in a bigger way to reach out to their customers. the shopping time of the consu India most of the retailing is all about food and groceries. labor and maintenance if the number of footfalls are less very low during the late nights which otherwise would be profitable to him.

also had its roots in rural America. It is a rich man's world too. widely travelled and with deep pockets. thereby. Unlike many other retailers who started from urban centres and then trickled down to rural areas. Many more such concepts are likely to be tested in the future as marketers and retailer The IMAGES KSA Report avers that these concepts are likely to go a long way in bringing a huge untapped population within the purview of organized retailing. reduce inventory holding and ultimately save cost. But India's middle-classes. It will have exclusive showrooms of international brands. the world's largest corporation. near Delhi.Rs 50 million a year. there were shopping arcades but no malls. It is technology that will help the organized retailers to score over the unorganized retailers. RAPID GROWTH :India's organized retail industry accounts for just 3% of the country's total retail sales. more than half of them in Delhi and Mumbai alone. shorten lead times. with multi-screen cinemas. Retailing is a "Technology-intensive" industry. though it is poised to grow by 97% per year in the next five years to a staggering $24bn. Urban Trends The urban retailing has been experimenting with many formats like the supermarkets. customers will have to shop by prior appointment. SWOT ANALYSIS: A SWOT analysis of the Indian organized retail industry is presented below: STRENGTH: 1. Spread over 3. hypermarkets. Interestingly. are flocking to malls. where multiscreen cinemas. . Analysts comment that this is just the beginning and this is going to experience a ‘sea change’ once the platform is opened up for the FDI. Fuelling this growth are India's sprawling shopping malls. specialty stores. and of latest it seems to be embracing the trend of mall culture. Successful organized retailers today work closely with their vendors to predict consumer demand. Godrej plans to open four more Nature's Basket stores in Mumbai before taking them national. Among them is India's biggest shopping mall. And in two years there will be 360 malls across the country. Ambi. Example: Wal-Mart pioneered the concept of building competitive advantage through distribution & information systems . multi branded outlets etc. where. it is set to become a virtual town. games and branded shops . increasing the size of the total markets begin to acknowledge that the rural consumer is more than a ‘poor cousin' of the urban counterpart.2 million square feet. Setting up cost of a store is about INR 5-10 million and per stores sales are expected in the range of INR 30. food courts and branded outlets will fill the space. restaurants. corner shops an Just five years ago. according to the developers. Wal-mart. Wal-mart had started from rural areas and then came closer to cities over a period of time.well out of the reach of many of the country's one billion people.introducing the concept of 'farm-to-plate' to urbanites. which is being built in Gurgaon. More than 20 are in various stages of development in Delhi and Mumbai. Today there are nearly 100 big shopping malls in the country. recreational facilities for adults and children. which are increasingly challenging High Street stores.

ITC launched India's first rural mall "Chaupal Saga" offering a diverse range of products from FMCG to electronic goods to automobiles. Threats: 1 If the unorganized retailers are put together. The Godrej group has launched the concept of 'agri-stores' named "Adhaar" which offers agricultural products such as fertilizers & animal feed along with the required knowledge for effective use of the same to the farmers. display. so they have stabilized in terms of footfalls & merchandise mix and thus have a higher customer loyalty base. in contrast the retail majors are experiencing a ROI of 8-10% 2.00. merchandise can be offered at lower costs. 2Shopping Culture . It is estimated to grow at the rate of 25-30% p. Organized retail is only 3% of the total retailing market in India. Opportunity: 1. and reach INR 1. a high street store of retail chain has an average conversion of about 50-60%. procurement will be direct from the Manufacturer.in the retailing industry. On the other hand. Pepsi on the other hand is experimenting with the farmers of Punjab for growing the right quality of tomato for its tomato purees & pastes. On an average a super market stocks up to 5000 SKU's against a few hundred stocked with an average unorganized retailer.a. This will provide variety in products (required breadth & depth for consumers) 3. Weakness: 1. they are parallel to a large supermarket with no or little overheads. attempting to provide farmers a one-stop destination for all their needs. As a consequence of high volumes. It is seen that actual conversions of footfall into sales for a mall outlet is approximately 20-25%. Percolating down : In 4. prices and turnover. The Indian middle class is already 30 Crore & is projected to grow to over 60 Crore by 2010 making India one of the largest consumer markets of the world. high degree of flexibility in merchandise." Hariyali Bazar" is started by DCM Sriram group which provides farm related inputs & services. They introduced two innovative logistics techniques – crossdocking and EDI (electronic data interchange) 2. India will have over 55 Crore people under the age of 20 .2. 3. Hence. Since the stand-alone outlets were established long time back. Customer Loyalty : Retail chains are yet to settle down with the proper merchandise mix for the mall outlets. a stand-alone store has a ROI (return on investment) of 25-30%. Less Conversion level : Despite high footfalls. Rural Retailing: India's huge rural population has caught the eye of the retailers looking for new areas of growth.reflecting the enormous opportunities possible in the kids and teens retailing segment . the conversion ratio has been very low in the retail outlets in a mall as compared to the standalone counter parts. The IMAGES-KSA projections indicate that by 2015.000 Crore by 2010. As a result.

: Shopping culture has not developed in India as yet. Supplier has to act in ways more than what is required. and he takes care of the shelves and the space. It is a 2-way agreement wherein the vendor gets the space to market his product by interacting one-to-one with the customers Point of Sale Information System : As soon as one stock keeping unit moves out of the store when purchased by a customer. the vendor himself is given the responsibility to handle the inventory.  Supply Chain Strategies in Retail Bulk-Breaking : Orders can be done in smaller lots with a good understanding with the supplier. A space for the vendor is rented in the outlet.  A re-order point can be imposed based on consumption pattern and the supplier is asked to fill the shelf upon inventory reaching the re-order point. the information readily flows to the supplier. Supplier holds inventory.  Peak Season Demand Handling. Even now malls are just a place to hang around with family and friends and largely confined to window-shopping. Cultural Variation leads to variation in merchandise in India at different geographical locations.  Order Management in case of retailers with multiple outlets.SRM .Supplier Relationship Management :  Relationship with supplier should not be a marriage of convenience. This can be achieved by following ways: Spatial Convenience: Strategically locating the outlet with distribution networks and warehouses located proximally. 3. Vendor Managed Inventory : In this case.  Warehouse Management in case of multiple outlets.  He is given access to the inventory database.  . Challenges in Retail The following are the key areas that may pose a threat to those retail companies that ignore the impacts of giving less importance to manage their demand and supply:  Forecasting and Inventory Management for JIT replenishments of products.

 Constant contact with distribution teams (trucks. discounts and incentives. This also serves as a promotion strategy for the outlet. the supplier savors the relationship.  Forecasting made with data on past consumption and present market trend. Model in Detail Integrated Demand Management :  The sales in the outlet is kept track of bill after bill hour after hour.  Store register work is made online and paper work is done with.By providing special offers.  Periodic offers and incentives are made available to the customers to generate demand.) and track where material is. etc.  Partnership with transportation firms so that cost and transport can be shared if the shipment does not occupy the whole truck space. Logistics :  Safe and reliable transport at as much low price as possible. Procurement : (Vendor’s side points to take care)  Strong Relationship  Information sharing and updating plan change  Combine vendors by minimizing transportation cost  Choose vendors in proximity  Optimum lot size taking vendors into confidenceProduction :Line should run smoothly without delays due to ordering and transportation (fulfillment and logistics have to be met first). .  Optional forecasting is made in case of seasonal requirements. trains. Competitive Areas of Importance Fulfillment :Stock filling is taken care of at both customer end (end product) and at the end of shelves at the shop. Reaching the customer at the right time and constant check on stocks and making sure right quantity is ordered at the right time.

and systems are available which provide vendors with sales and stock information directly from the point of sale system. an example of an electronic recognition system. it is critical that you understand the uses and goals of an inventory management system before implementing. especially for the small retailer who is close to customers and much more responsive to their demands than is the national chain. Possibly the best examples of inventory management come from big retailers. However. enables tracking of items via a computer chip embedded in the prway is uploaded instantly to the inventory control system. instantly. the answer to all questions. The basic goal of a point-ofpurchase inventory control system is to provide information on profitability. Inventory control has been used to take down many competing retailers. and rate of sale for every item a retailer stocks. status. MiS tools can be implemented to gain a significant advantage over competitors. Once an MIS infrastructure is established. Vendors are subject to an incentive to keep their inventory on store shelves. the biggest reason retail businesses fail is that they lack inventory control. but one of his most advantageous assets was his deep understanding of inventory control's importance. which reduces the time spent in receiving and stocking and allows for a more efficient shipping process. It is a common misconception among small retailers that only industry giants like WalMart can use MIS effectively. it makes sense for the retailer to integrate vendors into the system. Imagine doubling your inventory turnover rate (certainly not farfetched wit you could sell product at half the normal margin and still gross the same amount of dollars in a given time period. Sam Walton himself began as a small retailer. effective management of your inventory can be a lethal weapon. Inventory controls systems can tell you how the inventory in stock is performing. however. These metrics can then be used to improve inventory turnover and return on investment.Tips For Controlling Retail Inventory Part of the answer to the "buying problem" is inventory control. Anything that results in making the chain between Vendors. and Wal-Mart concentrated on becoming the leading edge of inventory control and is now one of the world's largest companies. Manageexpensive. In fact. MIS is made greatly accessible to the small retailer by consulting companies. It doesn't tell you that new products you should carry. The net impact on your business is increased turnover rates and fewer runs on inventory. Retailers and Customers more efficient also results in additional profit. MIS is commonly regarded as a daunting system to implement by those with limited experience in this highly-technical area. Buying is a great area of opportunity. . Providing your vendors with timely information and making them responsible for maintaining inventory your overall efficiency is improved as your own workload is diminished. FRID. Although internal hires are available. To put it simply: Kmart neglected inventory control and failed. Like much of the new technology available to business owners. however it is critical to understand exactly what MIS can accomplish. However. Inventory control is not. when employed aggressively against competitors. It is imperative for retailers to be aware of inventory performance and its effects on profitability.

inventory control is not the ultimate solution to retailers' problems. ideas to educate customer. products are called merchandise. create desire and finally increase store traffic and sales volume. it is about implementing effective design.  . Ladies and Kids wear  Foot Wear  Music  Toys  Stationery 7 P’s of Services 1st P: PRODUCT  Product. a product is anything that can be offered to a market that might satisfy a want or need. For example.  Home Lien Items  Electronic Items  Mobile Zone  Furniture  Star Sitara  Opticians  Men.e. but it can't tell you what new products to stock.refers to the merchandise i. inventory control tells you what products are performing well. It is an art and science of displaying merchandise within store. the range of clothes. Primary Data Operations are classified into 3 functions below:  Management Function  General Merchandise  Inventory & Credit Management General Merchandise In marketing. In retailing.Of course.

Music. 3rd P : PLACE Apparel Retailing Business is driven by one crucial factor:  Location  Approachable  Parking 4th P: PROMOTION  Print medium.COLOR PLUS and IN-HOUSE brands like those of SHOPPER’S STOP or WESTSIDE use this technique.  Loyalty programs  In-store Visual merchandising 5th P: PEOPLE  Every second a customer spends inside the store has to be viewed as Moment of Truth  “People” is that aspect of the marketing mix which adds tangibility to the service of creating an experience 6th P: PROCESSES 7th P : PHYSICAL EVIDENCE  Managing Appearance of the building & Location  Maintaining Temperature . life style and Ambient shopping as an addition to the core product.Supplementary services -include a component of fashion.  Ex:. 2nd P : PRICING Cost plus price and Percentage method pricing:  Most widely used technique to price apparels. customers buy experiences and not brands or products.  Today. Lighting and Fragrance inside the store  .

Subhiksha and Nilgiris in food and FMCG. Wheel Chair. and analyze Whether their current market offers a potential redevelopment of the area into a more modern multi-option destination. therefore for the existing small and medium independent retailers is to closely examine what changes are taking place in their immediate vicinity. Raymond's. Re-engineering of product sourcing philosophies-aligned more towards collaborative planning and replenishment should then be next on their agenda. S Kumar's and Grasim first saw the emergence of retail chains  Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches  The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers.Availability of services like Prams. these retailers need to invest much more in capturing more specific market. The message.  Textiles sector with companies like Bombay Dyeing. Planet M and Music World in music. Intelligence as well as almost real-time customer purchase behavior information. Crossword and Fountainhead in books. . Food World. Valet Parking etc  Stylish Stocking of Merchandise CHANGES IN RETAILING Conclusion For a start.  For e. The retailers also need to make substantial investment in understanding/acquiring some advanced expertise in developing more accurate and scientific demand forecasting models.g. The Indian Retail Industry Evolution  Traditionally retailing in India can be traced to – The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the consumers – Era of government support for rural retail: Indigenous franchise model of store chains run by Khadi & Village Industries Commission  1980s experienced slow change as India began to open up economy.

etc. RPG's Music World and the Times Group's music chain Planet M. Post 1995 onwards saw an emergence of shopping centers. . Variety and Volume  Expanding target consumer segment: The Sachet revolution .000 crore Retailing formats in India  Malls: The largest form of organized retailing today.  Discount Stores: As the name suggests. Pantaloon. home. Ranges from 60. with facilities like car parking – targeted to provide a complete destination experience for all segments of society  Emergence of hyper and super markets trying to provide customer with 3 V’s . Located mainly in metro cities. offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season.  Specialty Stores: Chains such as the Bangalore based Kids Kemp. toys. are focusing on specific market segments and have established themselves strongly in their sectors. The product category can range from a variety of perishable/ non perishable goods  Department Stores: Large stores ranging from 20000-50000 sq. They lend an ideal shopping experience with an amalgamation of product.Value.example of reaching to the bottom of the pyramid. all under a common roof. Piramyd.Examples include Shoppers Stop. 13.  At year end of 2000 the size of the Indian organized retail industry is estimated at Rs. catering to a variety of consumer needs. – mainly in urban areas.000 sq ft and above. the Mumbai books retailer Crossword. discount stores or factory outlets. in proximity to urban outskirts. Further classified into localized departments such as clothing.00. groceries.000 sq ft to 7. service and entertainment. ft.

 Convenience Stores: These are relatively small stores 400-2. These stores today contribute to 30% of all food & grocery organized retail sales.000 sq ft to 2. Among these. Recent Trends  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. feet located near residential areas. modern trade) makes up 3 percent or US$ 6.e. offer several brands across a single productcategory.  MBO’s :Multi Brand outlets.000 sq ft and large supermarkets ranging from of 3. of which organized retailing (i.  Hypermarts/Supermarkets: Large self service outlets.000 sq ft. Prices are slightly higher due to the convenience premium. the biggest success is K Raheja's Shoppers Stop. Super Markets can further be classified in to mini supermarkets typically 1. Department Stores: Departmental Stores are expected to take over the apparel business from exclusive brand showrooms. catering to varied shopper needs are termed as Supermarkets. ft) across India and even has its own in store brand for clothes called Stop!. These usually do well in busy market places and Metros. These are located in or near residential high streets. having a strong focus on food & grocery and personal sales.000 sq. also known as Category Killers.  Estimated to be US$ 200 billion.500 sq ft to 5. seven days a week.4 billion  As per a report by KPMG the annual growth of department stores is estimated at 24% . They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day. which started in Mumbai and now has more than seven large stores (over 30.000 sq.

q. Melas are larger in size and more sophisticated in terms of the goods sold (like TVs) Recent changes: 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. Rural retail industry has typically two forms: "Haats" and “Melas". ft. sub-urban discount stores. Recent Trends Traditionally three factors have plagued the retail industry: Unorganized : Vast majority of the twelve million stores are small "father and son" outlets Fragmented : Mostly small individually owned businesses. AT Kearney. ft per person is amongst the lowest. Ex. Cash and carry etc. Ranked second in a Global Retail Development Index of 30 developing countries drawn up by contd. Store design : Biggest challenge for organised retailing to create a “customer-pull” environment that increases the amount of impulse shopping. Haats are the weekly markets : serve groups of 10-50 villages and sell day-to-day necessities. the retail space per capita at 2 s. average size of outlet equals 50 s. Rural bias: Nearly two thirds of the stores are located in rural areas. Though India has the highest number of retail outlets per capita in the world.q. Research . Quasi-mall.

Big Bazaar. Retail chains like MusicWorld. Unorganized retailing is getting organized: To meet the challenges of organized retailing such as large cineplexes.shows that the chances of senses dictating sales are upto 10-15%. which are backed by the corporate house such as 'Ansals' and 'PVR‘ the unorganized sector is getting organized. Reasons range from differences in consumer buying behavior to cost of real estate and taxation laws. Baristas. Piramyd and Globus are laying major emphasis & investing heavily in store design. Bombay Bazaar. Recent Trends contd. Ex. Stores trying to emulate the model of Wal-Mart.  Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across most categories of consumption – ITC is experimenting with retailing through its e-Choupal and Choupal Sagar – rural hypermarkets.  More successful in cities in the south and west of India. 25 stores in Delhi under the banner of Provision mart are joining hands to combine monthly buying. RPGs. – .  Multiple drivers leading to a consumption boom: – Favorable demographics – Growth in income – Increasing population of women – Raising aspirations : Value added goods sales  Food and apparel retailing key drivers of growth  Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number of double-income households. and malls. Emergence of discount stores: T hey are expected to spearhead the organised retailing revolution. Bombay Bazaar and Efoodmart formed which are aggregations of Kiranas.

– Mahamaza is leveraging technology and network marketing concepts to act as an aggregator and serve the rural markets.  Companies using their own web portal or tie-sups with horizontal players like Rediff.com to eBay to radically change buying behavior across the globe. Shoppers’ Stop and Lifestyle are likely to target metros and small cities almost doubling their current number of stores  These Walmart wannabes have the economy of scale to be low –medium cost retailers pocketing narrow margin India vs.com to offer products on the web. World  Indian retail is fragmented with over 12 million outlets operating in the country. ft.HLL is using its Project Shakti initiative – leveraging women self-help groups – to explore the rural market.  IT is a tool that has been used by retailers ranging from Amazon.widely spread retail network but with the lowest per capita retail space (@ 2 sq. catering to more than 13 times of the total retail market size as compared to India  India has the highest number of outlets per capita in the world .  ‘e-tailing’ slowly making its presence felt.9 million outlets in USA. per person)  . Major Retailers:  India’s top retailers are largely lifestyle. This is in comparison to 0.com and Indiatimes. clothing and apparel stores  This is followed by grocery stores  Following the past trends and business models in the west retail giants such as Pantaloon.

800 stores (over 47 million square meters) where as none of India's large format store (Shoppers' Stop.Annual turnover of Wal-Mart (Sales in 2001 were $219 billion) is higher than the size of Indian retail industry.The stock-out levels among Indian retailers surveyed ranged from 5 to 15 percent. Westside. revenues from the sector are expected to triple from the current US$ 7. .  One-day sales record at Wal-Mart (11/23/01) $1. Number of employees in Wal-Mart are about 1. Almost 100 times more than the turnover of HLL (India's largest FMCG company). retail sector has an average inventory turns ratio of about 18.6 billion which is expected to grow at a compounded 30 per cent over the next five years. Many Indian retailers KPMG surveyed have inventory turns levels between 4 and 10.  Developed economies like the U.7 billion to US$ 24 billion by 2010.  The sales per hour of $22 million are incomparable to any retailer in the world. Future direction: Positives  AT Kearney has estimated India’s total retail market at US$ 202.S.over 4.  Wal-Mart .  With the organised retail segment growing at the rate of 25-30 per cent per annum. employ between 10 and 11 percent of their workforce in retailing (against 7 percent employed in India today).  Global best-practice retailers can achieve more than 95 percent availability of all SKUs on the retail shelves (translating into a stock-out level of less than 5 %).  60% of retailers in India feel that the multiple format approach will be successful here whereas in US 34 of the fastest-growing 50 retailers have just one format  Inventory turns ratio: measures efficiency of operations.3 million where as the entire Indian retail industry employs about three million people.roughly two third of HLL's annual turnover.S. The U. Lifestyle) can compare.25 billion .

 The share of modern retail is likely to grow from its current 2 per cent to 1520 percent over the next decade  Over next two years India will see several Indian retail businesses attaining a critical mass as growth in the industry picks up momentum driven by two key factors: – Availability of quality real estate and mall management practices – Consumer preference for shopping in new environments  Wal-Mart : huge plans for India. to head its market research and business development functions pertaining to its retail plans in India. which might lead to over-capacity of malls  Lack of differentiation among the malls that are coming up. Moving a senior official from its headquarters in Bentonville.  New York-based high-end fashion retailer Saks Fifth Avenue has tied up with realty major DLF Properties to set up shop in a mall in New Delhi. Efficient replenishment practices practiced in the Indian auto and auto-component industry can be leveraged to implement efficient supply chain management techniques. expects to open one store each in Delhi. retailer of apparels. Ahmedabad. is an issue . One option may be to look at specialization. Arkansas.retailers clearly need to augment their operations. in terms of adherence to delivery schedules and delivering the quantity ordered.  Tommy Hilfiger. Future direction: Concerns  68 million square feet of mall space is expected to be available by end of 2007.  Operations of retailers and suppliers are not integrated. Lucknow and Bangalore in the next four months.  Supplier maturity.  Poor inventory turns and stock availability measures .

lead to retailers having state-level procurement and storage leads to Indian retailers having higher inventories. .  Supply chain and customer relations followed by merchandising. Sales tax laws . VAT has helped alleviate this a bit. facilities management and vendor development are areas which have significant gaps and proactive training is a key imperative for overcoming these.  Increased adoption of IT and shrinkage management will be a critical area.

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