Chapter (1)

INTRODUCTION

Part-1.1

RETAIL INDUSTRY
 The word "Retail" originates from a French-Italian word.
Retailer someone who cuts off or sheds a small piece from
something. Retailing is the set of activities that markets products or
services to final consumers for their own personal or household use.
It does this by organizing their availability on a relatively large scale
and supplying them to customers on a relatively small scale.
Retailer is a Person or Agent or Agency or Company or Organization
who is instrumental in reaching the Goods or Merchandise or
Services to the End User or Ultimate Consumer.
Retail is India's largest industry. It accounts for over 10 per
cent of the India's GDP and around eight per cent of the
employment. Retail sector is one of India's fastest growing sectors
with a 5 per cent compounded annual growth rate. India's huge
middle class base and its untapped retail industry are key
attractions for global retail giants planning to enter newer markets.
Driven by changing lifestyles, strong income growth and favorable
demographic patterns, Indian retail is expected to grow 25 per cent
annually. It is expected that retail in India could be worth US$ 175-
200 billion by 2016.
Emerging markets such as India and China are the final
frontier for retail taking the focus away from saturated Western
markets. Since 2001, 49 global retailers entered 90 new markets,
but at the same time, 17 retailers left markets in 2005.
The Indian retail industry in valued at about $300 billion
and is expected to grow to $427 billion in 2010 and $637 billion in
2015. Only three percent of Indian retail is organized. Retailers of
multiple brands can operate through a franchise or a cash-and-carry
wholesale model.
The Indian retail environment has attained $ 210bn
quiche, witnessing a strong development pace of five percent per
year as per latest survey by Price Waterhouse Coopers. As per the
estimation 200 malls, presenting additional 50mn sq ft of retail
space will be ready in next two years. Existing retail space in 160
malls is nearly 32mn sq ft

1.1 Indian Retail Market

The analysts foresee bright future of the retail sector. A
huge number of shopping malls, nearly 100, have come up in the
recent past, generating 20mn sq ft. retail space, extending more
space of about 12mn sq ft to it. Nearly 60 malls are on the verge of
completion and may be operational by the end of current financial
year. A forecasted number of nearly 200 malls, in a move to make
additional 50mn sq ft of retail space, will be completed within the
next two-years.
India retail industry is expanding itself most aggressively;
as a result a great demand for real estate is being created. Indian
retailers preferred means of expansion is to expand to other regions
and to increase the number of their outlets in a city. It is expected
that by 2010, India may have 600 new shopping centers.
In the Indian retailing industry, food is the most
dominating sector and is growing at a rate of 9% annually. The
branded food industry is trying to enter the India retail industry and
convert Indian consumers to branded food. Since at present 60% of
the Indian grocery basket consists of non- branded items.
The global retail giants like Wal-Mart, Gap, Tesco,
Versace, KMart/
SEARS, Carrefour, ZARA, FCUK, Fendi, NEXT, Mother Care, lKEA,
Trussardi, DKNY and Debenhams have made plans to march in the
Indian market. ESPRIT, GUESS, Chanel, Mango and many other
global marked their
presence in India by implementing licensing and franchisee
agreements. The global retailers on the line of control, awaiting the
green signal from Govt. to enter Indian retail market. However, the
current scenario has encouraged Indian players to speed up retail
expansion and fresh retail ventures. Companies like Shoppers Stop,
Trent, Reliance, Lifestyle, Pantaloons Tanishq, Crossroads,
Akbarallys' and Tanishq already have planned to invest over Rs
5,000cr. Trent is on the edge to take both its brands 'Star India
Bazaar' and 'Westside' to new cities, meanwhile Shoppers' Stop has
recently geared up for expansion of present ones and to add 11 new
stores including two hypermarkets. Also, Pantaloon has planned to
add eight 'Big Bazaar' malls within the next 6 to 8 months.
After partition, Reliance Industries Ltd (RIL) is
substantially getting
ready to enter in field of retailing. RIL is poised to emerge as the
single largest
player in this sector. On the other hand, Tosco’s, Wal-Marts or
Safeway does ultimately enter in the country. So finally, Shoppers'
Stops, Westside, Pantaloons and West sides in coming years have
will face stiff competition.

STRUCTURE OF RETAIL INDUSTRY

The retail industry continued in India in the form of Kiranas
till 1980. Soon, following the modernization of the retail sector in
India, many companies tarted pouring in the retail industry in India
like Bombay Dyeing, Grasim etc. As has been mentioned earlier the
retail sector in India can be widely split into the organized and the
unorganized sector.
Organized Retail Sector
After 50 years of unorganized retailing and fragmented Kiranas
stores, the Indian retail industry has finally begun to move towards
modernization, Systematization and consolidation. Today,
modernization is the catch phrase and the key to understanding
 retail in the next decade. Traditionally retailers

1.3 Organized Retail Market

Have had localized operations. This localized nature of
the industry is hanging as retailers face lower growth rates and
threatened profitability in home Markets. New geographies help
them sustain top line growth in Addition to enabling global sourcing
and encasing on global advantages of getting the best products at
optimum prices.
There has been a boom in retail trade in India owing to a
gradual increase in the disposable incomes of the middle class
households, as a result of good performance of IT, Service and
Infrastructure sectors. More and more players are entering the retail
business in India to introduce new formats like malls, supermarkets,
discount stores, department stores and even changing the
traditional looks of bookstores, chemist shops, and furnishing stores.
Organized retail formats prevalent globally
Supermarkets: Self-service 4000-20000 sq ft stores with shopping
carts typically focused on regular groceries, household goods and
personal care Hypermarkets: Huge stores over 40000 sq ft
situated outside the town with ample parking space aimed for bulk
purchases stocking electronics, furniture and clothing. Carrefour is
the global major in this format.
Mass merchandisers: Large destination stores that sell everything
at competitive prices. They have cross-country chain operations
with centralized
sourcing and a hub-and-spoke distribution. Makro and Sam's Club
are leading players in this format.
Discounters: Aimed at bargain buyers offering less choice but deep
discount on bulk sourcing deals through controlled inventory. Aldi is
the world leader in this format.
Convenience Stores: Small stores located at convenient points
like petrol stations working round the clock.

Unorganized Retail Sector

The unorganized retail sector basically includes the local
Kiranas, hand cart, the vendors on the pavement etc. This sector
constitutes about 98% of the total retail trade. As 70% of the
employment is generated in Agriculture sector, hence this form of
retailing is widely seen in those areas and of course to some parts of
the urban. There is a lot of hue and cry in the sector for opening of
sector for direct investment from the foreign players, but
government can not neglect the interests of small players. One of
main reason of not opening this sector to FDI is it may shrink the
employment in the unorganized sector and expand that in the
organized.
RETAILING FORMATS IN INDIA
 Malls:
 The largest form of organized retailing today Located
mainly in metro cities, in proximity to urban outskirts. Ranges from
60,000 sq ft to 7,00,000sq ft and above. They lend an ideal
shopping experience with an amalgamation of product, service and
entertainment, all under a common roof. Examples include Shoppers
Stop, Pyramid, and Pantaloon
 Specialty Stores:
Chains such as the Bangalore based Kids Kemp, the
Mumbai books retailer Crossword, RPG's Music World and the Times
Group's music chain Planet M, are focusing on specific market
segments and have established themselves strongly in their sectors.
 Discount Stores:
As the name suggests, discount stores or factory outlets,
offer discounts on the MRP through selling in bulk reaching
economies of scale or excess stock left over at the season. The
product category can range from a variety of perishable/ non
perishable goods
· Department Stores:
Departmental Stores are expected to take over the
apparel business from exclusive brand showrooms. Among these,
the biggest success is K Raheja's Shoppers Stop, which started in
Mumbai and now has more .
 Hyper marts/Supermarkets:
Large self service outlets, catering to varied shopper needs
are termed as Supermarkets. These are located in or near
residential high streets. These stores today contribute to 30% of all
food & grocery organized retail sales. Super Markets can further be
classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft
and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft.
having a strong focus on food & grocery and personal sales.
 Convenience Stores:
These are relatively small stores 400-2,000 sq. feet
located near residential areas. They stock a limited range of high-
turnover convenience products and are usually open for extended
periods during the day, seven days a week. Prices are slightly higher
due to the convenience premium.
 Mob's :
Multi Brand outlets, also known as Category Killers, offer
several brands across a single product category. These usually do
well in busy market places and Metros.

1.4 Growing Format in India

RETAILING MAP IN INDIA

1.5 Retailing Map
EVOLUTION OF RETAILING
Retailing, one of the largest sectors in the global
economy, is going
through a transition phase in India. For a long time, the corner
grocery store was the only choice available to the consumer,
especially in the urban areas. This is slowly giving way to
international formats of retailing. The traditional
food and grocery segment has seen the emergence of
supermarkets/grocery chains, convenience stores and fast-food
chains.
The traditional grocers, by introducing self-service
formats as well as value-added services such as credit and home
delivery, have tried to redefine themselves. However, the boom in
retailing has been confined primarily to the urban markets in the
country. Even there, large chunks are yet to feel the impact of
organized retailing. There are two primary reasons for this. First, the
modern retailer is yet to feel the saturation' effect in the urban
market and has, therefore, probably not looked at the other markets
as seriously. Second, the modern retailing trend, despite its cost-
effectiveness, has come to be identified with lifestyles.
In order to appeal to all classes of the society, retail
stores would have to identify with different lifestyles. In a sense, this
trend is already visible with the emergence of stores with an
essentially `value for money' image. The attractiveness of the other
stores actually appeals to the existing affluent class as Well as those
who aspire to be part of this class. Hence, one can assume that the
retailing revolution is emerging along the lines of the economic
evolution of society.

1.6 Journey of Organized Retail

It was only in the year 2000 that the economists put a
figure to it: Rs. 400,000 crore which is expected develops 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.
20,000 crore 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 in comparison to 16 square feet in the United States.
India's per capita retailing space is thus the lowest in the world.
INDIAN SCENARIO OF RETAIL INDUSTRY
The present value of the Indian retail market is estimated
by the India Retail Report to be around Rs. 12,00,000 crore($270
billion) and the annual growth rate is 5.7 percent. Retail market for
food and grocery with a worth of Rs. 7,43,900 crore is the largest of
the different types of retail industries present in India. Furthermore
around 15 million retail outlets help India win the crown of having
the highest retail outlet density in the world. The contribution of
retail sector to GDP has been manifested below:

As can be clearly seen, retailing in India is superior to those

of its contenders. Retail sector is a sunrise industry in India and the
prospect for growth is simply huge. There are many factors that
have stimulated the rise of the shopping centers and multiplex-malls
in a jiffy. Some of them can be listed as follows:
1. Rise in the purchasing power of Indians- the rise in the per
capita income
In the last few years has been magnificent. This has led to the
generation of insatiable wants of the upper and middle class. The
demand of new as well as second hand durables has risen
throughout the country thus providing the incentive for taking up
retailing.
2. Favorable to farmers- retailing has helped in removing the
middlemen and
has thus enhanced the remuneration to farmers. This is a new
revolution in the agricultural sector in India and will go a long way in
amending the condition of agriculture, a major concern among
policy makers.
3. Use of credit- a typical Indian is most conversant with using
credit cards than carrying money. This is led to shift of the
consumer base towards supermarkets and make the payments in
the form of credit.

4. Comfortable Atmosphere- a visit to a retail store appears to be

more soothing for the generation-Y. People and kids prefer to shop
in an air conditioned. The retail industry is the second largest
employer in India. It currently employs about 7 percent of the total
labor force in India. Finance Minister P. Chidambaram's recent
statement “salaries ought not to be legislated” is a welcome move
as most of the organized retail is in private hands. Only 4.6% of the
total retail trade is into organized sector. It generates about
Rs.55,000 crore ($12.4 billion). The major and minor players
desperately
need to work hard in this direction so that next time the figures look
more decent. The government must also make an attempt to
ameliorate the situation as political instability and infrastructure
namely power and roads are the major roadblocks in the path of
smooth functioning of the market.
PRESENT INDIAN SCENARIO
* Unorganized market: Rs. 583,000 cores
* Organized market: Rs.5, 000 cores
* 5X growth in organized retailing between 2000-2005
* Over 4,000 new modern Outlets in the last 3 years
* Over 5,000,000 sq. ft. of mall space under development
* The top 3 modern retailers control over 750,000 sq. ft. of retail
space
* Over 400,000 shoppers walk through their doors every week
* 47 global fortune companies & 25 of Asia's top 200 companies are
retailers
* Biggest player in India is Pantaloon Retail India Limited
* Growth in organized retailing on par with expectations and
projections of the last 5 Years: on course to touch Rs. 35,000 corers
(US$ 7 Billion) or more by
2005-06

1.7 Total Retail Sales 2007

 RETAIL: WORLDWIDE SCENARIO
China- the total sales from retail market in China reached US$755
billion in 2005. However organized retailing in China accounts for
only 20% of it. Also the fragmentation of China's retail market is so
high that top 100 retailers make up for only 10.5% of the total
market. The registered sales of department stores grew by 25.7%
and that of convenience stores grew by 36.5% in 2005. The Chinese
retail market is expected to reach new highs as the population of
strong middle class is expected to double by 2020 and mergers and
acquisitions among retailers are3 going in great guns. The WTO
restrictions are also expected to have a favorable impact on its
retail sector. Key Players Analyzed This section covers the key facts
about players currently operating in the China retail industry
including Shanghai Bailian Group, Beijing Gome Electric, Carrefour,
Wal-Mart Stores, Wuhan Zhongbai Group, and China Paradise
Electronics Retail.
Japan- total annual sales for the Japanese retail industry for 2003
amounted to
JPY 133,273 billion. Japan had 1.2 million retail establishments in
June 2004 and there were 42,738 specialty superstores. The year
2002 to 2004 the annual
Sales per store increased by 3.8%. The growth was mainly driven by
the grocery superstores but the number of superstores specializing
in clothes .
Spain- Spain Energy Industry Spain energy consumption is
estimated to have
reached 165 Million Tons of Oil Equivalent in 2006. Fossil fuels are
the major sources for energy in Spain especially Oil (49.5%) &
Natural Gas (19.9%). With the Spanish objective of energy security
& diversity, and clean energy sources, renewable sources are
expected to grow at rapid pace. Key Findings § Spain is a net energy
importer, with imports accounting for 99% of its total annual oil and
natural gas consumption and 50% of its coal consumption key
players in Spain energy such as Gas Natural Group, CEPS Group,
Repsol YPF, Endesa S.A. and Gamesa.

United State- Retail is the second-largest industry in the U.S. by

number of businesses and number of employees. Retail sales in the
U.S. (total retail sales
include the categories of gasoline, automobiles, and food service)
were up about 3.8% in 2007, to $4.49 trillion (Plunkett Research
estimate). The 2007 growth was driven partly by higher gasoline
costs as well as by deep price discounting during the Christmas
season by mass merchandisers and year-long discounting by
automobile dealers.
 1.8 US Retailing Format

Brazil- Emerging as one of the world's largest retail markets. The

sales in the industry have been growing strongly since 2003 and are
expected to continue at this momentum only over the next few
years as constantly declining inflation rate allows for continued
expansion of real incomes (increasing demand for non durable
consumer goods) and credit conditions ease (sustaining demand for
durable goods). A process of consolidation of the retail industry has
been underway but overall, the market remains relatively
fragmented, indicating substantial scope for the larger players to
grow their market share in future. The top five supermarket chains
account for approximately 40% of total sales.. All the market values
have been converted to US$ at May 2007 exchange rate where, 1
Brazil Real (BRL) = US$ 0.494 (Approx).
 1.9 Penetration of Retail

OBJECTIVES & ROLE OF RETAIL INDUSTRY

Retail is clearly the sector that is poised to show the highest growth
in the next five years. The sector is set for a revolution, as both the
present players and new entrants are gearing up to explore the
market. This sector contributes
10% of India's GDP and the current growth rate is 8.5%. The present
size of the organized retailing sector is approximately 3% and is
expected to grow to 25-30% by the year 2010. There are about 300
new malls, 1500 supermarkets and 325 departmental stores
currently under construction. Many players are coming up with huge
investments, due to which the present 12 million mom-and-pop
shops and Kiranas stores fear losing their business. Most predictions
say that the sector might reach to US$ 400-600 billion by the year
2010 The retail sector has played a phenomenal role throughout the
world in increasing productivity of consumer goods and services. It
is the second largest industry in the United States of America in
terms of numbers of employees and establishments. Wal-Mart, the
largest retailer in the United States is also the largest employer in
the United States with annual sales over $ 284 Billion. There is no
denying the fact that most of the developed economies are very
much relying on their retail sector as a locomotive of growth.
Analysts, CEOs,
and others are using consumer spending and consumer confidence
data originating from the retail sector as an indicator to gauge the
status of the economy

CHALLENGES OF RETAIL INDUSTRY

The big challenge for the Indian retailing industry is the
heterogeneity of the market. It is up to us retailers to evolve with
consumers, predict where and what they will spend on, be there and
take the highest share of their wallet and use this last leg of the
economic chain to build India. At Panta-loon, through our delivery
formats, we touch 52% of the customer’s wallet. My vision is to
capture where this new, young and emergent India is going to spend
and capture as close to 100% of their shopping. So far, modern-
format retail has scaled up its presence in the metros and a few
cities. However, the
future will see tier-II and, maybe, even tier-III cities attract more
retail outlets. Consumer mindset and behavior is changing in these
cities. A growing base of affluent, upwardly mobile consumers have
similar needs and desires as their urban counterparts and they are
looking for instant gratification. With satellite television, internet and
mobile communication available in smaller cities, people are
increasingly exposed to how the ‘West’ lives. Tier-II

1.10 Challenges in Retail Market

and tier-III cities present an enormous growth potential over the
next five years and are the future of modern retail in India
MAJOR CHALLENGES
1. Amalgamation or Confusion- According to TATA Strategic
Management Group, India has a high density retail structure of 1
retail outlet per 90 people and is the 9th largest retail market in the
world. But the structure of the retail industry in India is in utter
jumble. The parallel operation of convenience stores, supermarkets,
hypermarkets and specialty stores in the economy is bewildering.
According to the 'Wheel of Retailing Theory', certain loopholes in
one of the forms of marketing can get communicated to other forms
also.
2. What to sell- Another bemusement is the category of items to
be offered. According to researches, 41 percent of total
consumption expenditure goes to the segment of food and groceries
and it accounts for 77 percent of total retail sales. So it is obvious
that this is the most preferred section of retailers. But unfortunately
the foible taste bias for 'wet market' (i.e. fresh food available
through hawkers) has marred this prospect also. Therefore supply
chain management, storage of fresh perishable foods and
persuading the customers that the food is inexpensive despite being
fresh are genuine challenges to the newcomers. Diversifying the
product base to consumer products such as readymade garments,
furniture’s, mobiles and computers can mitigate the losses, if any
from food marketing and also broaden the reach to consumers. 3.
Nostalgia- Indian shopping habits are no different. People tend to
attach
qualities like honesty, fair price, good behavior etc. to shopkeepers
with whom they have been dealing right from childhood. They find
no reason to go to a distant megaspore without any genuine reason.
This problem is difficult to deal with as it demands a change in long-
formed mindset. Organized retail outlets can overcome this problem
by employing eligible local peoples who can interact in vernacular
language and win the confidence of people.
4. Information Technology- This is a major problem and India
must act fast if
it wishes to create a smooth field for organized retailing. Digitization
of services will make transfer of goods easy and an improvement in
supply chain management will definitely play a significant role in
attracting more consumers and less consumer grievances. Besides,
it will generate easier payments option for customer and easier
money movement for the CEOs of these highly diversified malls.

MINOR CHALLENGES
1. Human resource crunch- the concern for insufficient
manpower in the industry has been in news for the last few months.
This fear is somehow unfounded. The retail industry according to
recent reports is growing at a rate of 100 percent. Kishore Biyani's
Future Group i.e. the Big Bazaar chain of retail outlet alone provides
employment to more than 18,000 people and is planning to expand
its employment base to 34,000 by June 2008. If we add to this the
foray by mega players like Reliance and Bharti-Walmart then the
fear can surely turn into a misperception. Retailing mainly deals
with hard-selling of space, trade of stocks and building of
relationships. Since most of the openings are for front line shop
people, a graduation will suffice. Nowadays many institutes also
provide post-HSC and post-graduate retail-specific courses.

2. Hindrances from government- Some political parties want the

government
to amend laws and improve curbs so that the mega players can't
openly decimate the unorganized retail sector. This is a conclusion
based on a myopic
outlook and must be amended for a long term strategy. The fear is
baseless because of the reasons mentioned above. The mega stores
will no doubt provide employment to the less educated masses. Also
taking business away especially from small food vendors is more
easily said than done. Instead the limiting move will send wrong
signals to the investors and will ward off investments when the
states need it most. Allowing 51 percent retail FDI in single brand
retailing is a welcome move in this direction. It is expected that the
government will create further opportunities for the organized retail
to come up as home grown investment is always sweeter than
foreign investment.
OTHER CHALLENGES:
(1) LOCATION:
"Right Place, Right choice" Location is the most important ingredient
for any business that relies on customers, and is typically the prime
consideration in a customers store choice. Locations decisions are
harder to change because retailers have to either make sustainable
investments to buy and develop real estate or commit to long term
lease with developers. When formulating decision about where to
locate, the retailer must refer to the strategic plan:
* Investigate alternative trading areas.
* Determine the type of desirable store location
* Evaluate alternative specific store sites
1.11 Retail Challenge
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. Merchandising consists of
activities involved in acquiring particular goods and services and
making them available at a place, time and quantity that enable the
retailer to reach its goals.
1.11 Retail Challenge
Merchandising is perhaps, the most important function for any retail
organization, as it decides what finally goes on shelf of the store.
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. The
importance of pricing decisions is growing because today's
customers are looking for good value when they buy merchandise
and services. Price is the easiest and quickest variable to change.
4) TARGET AUDIENCE:
"Consumer the prime mover" "Consumer Pull", however, seems to
be the most important driving factor behind the sustenance of the
industry. The purchasing power of the customers has increased to a
great extent, with the influencing the retail industry to a great
extent, a variety of other factors also seem to fuel the retailing
boom.
5) SCALE OF OPERATIONS:
Scale of operations includes all the supply chain activities, which are
carried out in the business. It is one of the challenges that the Indian
retailers are facing. The cost of business operations is very high in
India.
SOME PUBLISHED ISSUE OF RETAIL INDUSTRY
 The retail industry is expected to grow into a USD 427 billion
industry by 2010- FICCI
 India’s retail industry, which is in the middle of rapid growth, has
already scripted success stories fit to be the subject of a Bollywood
film-Business Standard
 The impact of organized retailers that have seen swarming of
malls lately, on the “mom-n-pop stores” in 20 Indian cities- Indian
Council of Research in International Economic Relations (ICRIER)
 Modern Retailing Comprehensive policy vital- The Hindu
 Retail boom triggers ancillary industry growth- The Times of India
 PAST/ PRESENT/ FUTURE OF RETAIL INDUSTRY
Before the decade of eighties, India with hundreds of towns and
cities was a nation striving for development. The evolution was
being witnessed at various levels and the people of India were
learning to play different roles as businessmen and consumers.
Retail-which literally means to put on the market, is a very
important aspect of every city. Without a well organized retail
industry we would not have our necessities and luxuries fulfilled. Be
it our daily groceries or fashion accessories and everything in
between, retail industry brings us the blissful experience of
shopping. Though organized retailing industry began much earlier in
the developed nations, India had not actively participated. However
with its vast expanse and young population, India in the 21st
century emerges as a highly potential retail market. The journey of
retailing in India has been riveting and the future promises further
growth. Here is a complete picture deciphering the past, present
and future trends of Indian Retail Market. It is widely accepted that
the retail industry has undergone a drastic change in last five years
and there is yet more to come. Let us compare the image of Indian
retailing in 2004-05 to that of its status in 2007-08 in the following
table:
Magnification of the Indian Retail Industry

1.4 Comparison of Retail Industry

The above table clearly shows that the retail market as well as the
mindset required for it has experienced a thorough revisal in the last
three years. This is just the beginning and Indians are sanguine that
the sector will see rosy days in the future. This confidence has
helped India acquire the No.1 position among 30 most attractive
retailing destinations in the world according to the Global Retail
Development Index of 2005 (by AT Kearney, India). Among
emerging markets, India holds the second position after China in the
list of most favored retail destinations
1.4 Comparison of Retail Industry
Past – Retail Industry in India Before the decade of
eighties, India with hundreds of towns and cities was a nation
striving for development. The evolution was being witnessed at
various levels and the people of the nation were learning to play
different roles as businessmen and consumers. The foundation for a
strong economy were being laid, youth were beckoning new
awareness in all spheres. And this brought in an opportunity for
retail industry to flourish. First in the metros and major cities later to
impact sub urban and rural market as well.
Retailing in India at this stage was completely unorganized
and it thrived as separate entities operated by small and medium
entrepreneurs in their own territories. There was lack of
international exposure and only a few Indian companies explored
the retail platform on a larger scale. From overseas only companies
like Levi's, Pepe, Marks and Spencer etc. had entered targeting
upper middle and rich classes of Indians. However as more than 50
% population was formed by lower and lower middle class people,
the market was not completely captured. This was later realized by
brands like Big Bazaar and Pantaloons who made their products and
services accessible to all classes of people and today the success of
these brands proves the potential of Indian retail market.
A great shift that ushered in the Indian Retail Revolution
was the eruption of Malls across all regional markets. Now at its
peak, the mall culture actually brought in the organized format for
Retailing in India which was absent earlier. To your surprise there
was not a single mall in India a decade before and just a few years
ago only a handful of them were striving, today there are more than
50 malls across different cities and 2 years from now around 500
malls are predicted to come up.
Present – Retail Industry in India
At present the Retail industry in India is accelerating.
Though India is
Still not at an equal pace with other Asian counterparts, Indian is
geared to become a major player in the Retail Market. The fact that
most of the developed nations are saturated and the developing
ones still not prepared, India secures a great position in the
international market. Also with a highly diverse demography, India
provides immense scope for companies brining in different products
targeting different consumers.
According to the Global Retail Development Index, India is
positioned as the foremost destination for Retail investment and
business development. The factor that is presently playing a
significant role here is the fact that a large section of Indian
population is in the age group of 20-34 with a considerably high
purchasing power; this has caused the increase in the demand in
the urban market resulting in consistent growth in the Retail
business. And though the metros and other tier 1 cities continue to
sustain Retail growth, the buzz has now shifted from these great
cities to lesser known ones. As the spending power is no longer
limited to metros, every tier 2 city in the country has good market
for almost every product or service. Due to this, tier 2 cities like
Chandigarh, Coimbatore, Pune, Kolkatta, Ahmedabad, Baroda,
Hyderabad, Cochin, Nagpur, Indore, Trivandrum etc. provide a good
platform for a brand to enter Indian market.
However there are a few precautions for every brand that
explores Indian market. As Indian consumers are very curious and
have a broad perspective, they respond well to a new product or
concept and there are very fair chances of a brand surviving well,
but every Indian consumer be it an urbanite or a small town dweller
needs a feeling of value for money. Although labeled as tight fisted,
Indian consumers are great spenders once they realize that they are
getting value for their money. Also new product /service concepts
from the western world are better adopted first by the urban
Indians, the smaller markets respond well to the need based
retailing rather than luxury concepts.
As the Indian retailing is getting more and more organized
various retail formats are emerging to capture the potential of the
market.
* Mega Malls
* Multiplexes
* Large and small supermarkets
* Hypermarkets
* Departmental stores are a few formats which flourishing in the
both big and
Small regional markets.
As the major cities have made the present retail scenario
pleasant, the future of the Indian Retailing industry lies in the rural
regions. Catering to these consumers will bring tremendous
business to brands from every sector. However as the market
expands companies entering India will have to be more cautious
with their strategic plans.
Future – Retail Industry in India
According to a study the size of the Indian Retail market is
currently estimated at Rs. 704 crores which accounts for a meager 3
% of the total retail market. As the market becomes more and more
organized the Indian retail industry will gain greater worth. The
Retail sector in the small towns and cities will increase by 50 to 60
% pertaining to easy and inexpensive availability of land and
demand among consumers.
Growth in India Real estate sector is also complementing
the Retail sector and thus it becomes a strong feature for the future
trend. Over a period of next 4 years there will be a retail space
demand of 40 million sq. ft. However with growing real estate sector
space constraint will not be there to meet this demand. The growth
in the retail sector is also caused by the development of retail
specific properties like malls and multiplexes.
According to a report, from the year 2003 to 2008 the
retail sales are growing at a rate of 8.3% per annum. With this the
organized retail which currently has only 3% of the total market
share will acquire 15-20 % of the market share by the year 2010.
Factors that are playing a role in fuelling the bright future
of the Indian Retail are as follows:
 The income of an average Indian is increasing and thus there is a
proportional increase in the purchasing power.
 The infrastructure is improving greatly in all regions is benefiting
the market.
 Indian economy and its policies are also becoming more and
more liberal making way for a wide range of companies to enter
Indian market.
 Indian population has learnt to become a good consumer and all
national and international brands are benefiting with this new
awareness.
 Another great factor is the internet revolution, which is allowing
foreign brands to understand Indian consumers and influence them
before entering the market. Due to the reach of media in the
remotest of the markets, consumers are now aware of the global
products and it helps brands to build themselves faster in a new
region
However despite these factors contributing to the growth
of Indian retail Industry, there are a few challenges that the industry
faces which need to be dealt with in order to realize the complete
scope of growth in Indian market.
Foreign direct investment is not allowed in retail sector,
which can be a concern for many brands. But Franchise agreements
circumvent this problem. Along with this regulations and local laws
and real estate purchase restrictions bring up challenges. And with
Good Planning, Timely Implementation and a media campaign that
touches Indian consumers any brand can go far ahead in the Indian
Retail Revolution.
IMPACT OF RETAIL INDUSTRY IN GLOBAL WORLD
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 was traditional family owned retail Chains
in South India such as Nilgiri’s 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
as. 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% year to
year.
To be successful in food retailing in India essentially
means to draw away shoppers from, the roadside hawkers and
Kiranas 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 traditionalKiranas Stores. On
an average a supermarket stocks up to 5000 SKU’s against few
hundreds stocked at an average Kiranas stores.
Though with excellent potential, India poses a complex
situation for a retailer, as this is a Country where each State is a
mini-Country by itself. The
Demography’s of a region Vary quite distinctly from others. In order
to appeal to all classes of the society, retail Stores would have to
identify with different lifestyles. Hence we may find more of
Regional players and it would take enormously long time before
nation wide successful Retail chains emerge. This is the main reason
as to why the successful retail chains in the Countries today operate
at regional segments only and are not aiming at nation wide
Presence, at least for the time being. In the organized retail
industry, the gestation periods are long, institutional funding is
Difficult, and there is none or little Government support.

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 Group's Food World, Nilgiri’s, Margin Free, Giant, Varkey's
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 mindset 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.

There are many problems face by Retail industry in Indian

Market. They are following:-
The format does not suit rural India: While the format suits the
urban areas, it does not suit the rural areas in a country like India.
Today, in Indian, organized retailing is confined to class cities, the
23 largest cities. About 82 per cent of organized retailing comes
form the top six cities and another 12 percent from the next four.
Thus, the top 10 cities account for 94 per cent of all
Organized retailing in India. The scattered location of consumers has
been the
main deterrent to the rapid spread of the idea in the rural areas.
Purchasing patterns not very conducive: Even in urban centers,
the purchasing patterns of the Indian consumers differ form those of
westerners. Whereas in the west, the purchases are spread better
over the month, in India.
Purchases are by and large made in the first week of the month.
Theirs perhaps has a correlation to patterns of payment of wages;
Purchasing patterns differ also because of the difference in the
eating habits of people.
Inadequate growth of brands: Inadequate growth of brands is
another factor, In India, branding was almost not-existent in
convenience products until recently; this has naturally inhibited
retailing through sophisticated chains. Supply chain problems: As
suppliers are not properly organized in the country, replenishment
of stock poses problems for large chains. Source development also
poses special problems.
Being family businesses, retailing enterprises have
limitation in expansion;
Yet another reason for the slow pick up of mega retailing idea in
India is that all along retail enterprises have been family concerns.
And, family businesses usually have a limitation in expansion,
Example of Vivek’s; The Vivek’s (Formerly Vivek’s & Co. ) of
Chennai, is an example. For the past several years, it remained
rather small because of its family character. During the three
decades from 1965 to 1995, it had just three showrooms. It was a
family concern and remained for a long time, a single store outfit,
managed by the father and assisted by his three sons. Once the
father grew old, the sons started managing the business, and
because there were three sons engaged in the business, the
enterprise went in for three showrooms. In recent years, however, it
has emerged as a major chain, as it has shed its family business
character, now it is actually the largest consumer durable chain in
the country. It has big sales volumes and multiple locations.
Real estate problems; Real estate is an integral requirement of large
scale chain store operation. One needs a large number of stores in
each city to achieve optimum scale. Also, big chains have to operate
in several cities. Real
estate thus becomes crucial. That is why groups that have been in
real estate and hotel businesses are more comfortable in branching
off into retailing. Fro other firms, real estate development are a
problem; they don not command property in prime locations.
Other Limitation of Retail Industry
 The organized retail industry in India is faced with stiff
competition from the unorganized sector.
 There is a shortage of quality real estate and infrastructure
requirements in our country.
 Opposition to Foreign Direct Investment from small traders
affects retail industry.
 A very high stamp duty on transfer of property affects the
industry.
 Shortage of retail space in central and downtown locations also
hinders the growth of retail industry.
 Presence of strong Pro-tenancy laws makes it difficult to evict
tenants and this is posing problems.
 Land-use conversion is time consuming and becoming complex.
 For settling property disputes, it consumes lot of time.
 Non residents are not allowed to own property except they are of
Indian origin.
 Inadequacies in infrastructure such as lack of high quality road
networks, power shortages and insufficient storage spaces

SOURCE OF DATA
Data’s are the useful information or any forms of document
designed in a systematic and standardize manner which are used
for some further proceedings. One of the important tools for
conducting marketing research is the availability of necessary and
useful data. Some time the data are available readily in one form or
the other and some time the data are collected afresh. The sources
of Data fall under two categories, Primary Source and Secondary
Sources.
Primary Data- the primary data was collected through the
following activities: Filled the Retail Industry related questionnaire to
managers of a select group of companies And Paper Conversation
Secondary Data- the secondary data was collected through the
following: Online Research material of the Various Institution/Outlets
directly or indirectly involved with Retail Industry, Secondary Data
used in External Source of Information Like internet, magazine,
paper cutting
OTHER SOURCE
 Information Sources Information has been sourced from namely,
books, newspapers, trade journals, and white papers, industry
portals, government agencies, trade associations, monitoring
industry news and developments, and through access to access to
more than 3000 paid databases.
 Chapter (2)
SIGNIFICANCE OF STUDY

Part 2.1

OPPORTUNITIES OF THE WESTERN RETAILERS IN INDIA

The retail industries in the western countries have reached
a point of saturation and there is no way of expanding. In this
backdrop the retail giants
are trying to make their mark in the retail market of countries that
still have untapped potential of expansion. India happens to be one
of them. AT Kearney has constructed the Global Retail Development
Index which has helped the western retailers to identify the
countries in which investments could be made.
CONTRIBUTION OF ‘FDI’ IN RETAILING
Permitting Foreign Direct Investment in the retailing
sector can have immense benefits. It can generate huge
employment for the semi-skilled as well as illiterate population
which otherwise can't be employed in the already confined rural and
organized sector. The retail sector is highly dependent on the rural
sector. Thus it can facilitate the improvement of the standard of
living of farmers by purchasing commodities at a reasonable cost. It
also stems out an indirect employment generation channel by
training and employing people in the transportation and distribution
sectors such as drivers, mechanics etc. It is also evident that real
estate is a genuine challenge for organized retailing. Traditional
retailers can use this situation in their favor by taking franchisees of
the mega players of this industry. On the other hand, the consumer
gains from the wide variety of choices and a more diversified basket
of prices available under one roof.

BENEFITS TO THE INDIAN CONSUMER:

One has to agree that the entrance of big players will ensure the
higher quality of service and produce being sold to the consumers.
There are other indirect benefits in terms of choice and pricing that
will be passed along to the
Consumers as the big retailers will compete with each Other for
greater share of the market.
 Chapter (3)
RESCARCH & ANALYSIS

LATEST TRENDS IN RETAIL SECTOR

Today, retail in India is huge, close to $200 billion, of which
organized retail accounts for just $6 billion. This $200 billion should
become $300 billion in the next five to six years. This is a time when
organized retailing is just getting into full steam and the opportunity
is huge. Organized retail in India is expected to grow at 40% for the
next five years, thanks to the nascent stage of modern retail and
the ‘malling’ of India.
It is expected that by 2016 modern retail industry in India
will be worth US$ 175- 200 billion. India retail industry is one of the
fastest growing industries with revenue expected in 2007 to amount
US$ 320 billion and is increasing at a rate of 5% yearly. A further
increase of 7-8% is expected in the industry of retail in India by
growth in consumerism in urban areas, rising incomes, and a steep
rise in rural consumption. It has further been predicted that the
retailing industry in India will amount to US$ 21.5 billion by 2010
from the current size of US$ 7.5 billion. The retail sector would
generate employment for more than 2.5 million people by the year
2010, says an analysis by Ma Foi Management Consultants Ltd. And
A KPMG report says that the organized retail would grow at a higher
rate than GDP in the next five years
Recent Trends & Changes
· Retailing in India is witnessing a huge revamping exercise as can
be seen in the graph
· India is rated the fifth most attractive emerging retail market: a
potential goldmine
· Multiple drivers leading to a consumption boom:
· Favorable demographics
· Growth in income
· Increasing population of women
· Raising aspirations : Value added goods sales

3.1 Retail Analysis

· Organized retailing in India has been largely an urban phenomenon
with affluent classes and growing number of double-income
households.
· Rural markets emerging as a huge opportunity for retailers
reflected in the share of the rural market across most categories of
consumption.
· Companies using their own web portal or tie-sups with horizontal
players like Rediff.com and Indiatimes.com to offer products on the
web
· Spencer's is also planning to set up 500 more stores by June 2008
with an investment of nearly US$ 125.89 million
· DLF plans to invest US$ 4.02 billion over four years to develop
about 20 large shopping malls across the country

3.2 Retail Market

·Israeli mall developer Plaza Center NV plans to invest US$ 1.25
billion over the next five-seven years to set up 50 malls in India.
· Reliance Retail is going ahead with plans worth an investment of
US$ 3.77 billion for setting up 205 stores
· IT is a tool that has been used by retailers ranging from
Amazon.com to eBay to radically change buying behavior across the
globe
· Experimentation with formats: Retailing in India is still evolving
and the sector is witnessing a series of experiments across the
country with new
3.2 Retail Market
Size formats being tested out. Ex. Quasi-mall, sub-urban
discount stores, Cash and carry etc
· Unorganized retailing is getting organized: To meet the
challenges of organized retailing such as large cineplexes, and
malls, which are backed by the corporate house such as 'Ansals'
and 'PVR‘ the unorganized sector is getting organized. 25 stores in
Delhi under the banner of Provision mart are joining hands to
combine monthly buying. Bombay Bazaar and E-food mart formed
which are aggregations of Kiranas.
· Emergence of discount stores: They are expected to spearhead
the organized retailing revolution. Stores trying to emulate the
model of Wal- Mart. Ex. Big Bazaar, Bombay Bazaar, RPGs
3.3 Retail

3.3 Retail Segments

MAJOR PLAYER OF RETAIL INDUSTRY
The Indian retail sector has been euphoria over the
last five years. India topped the A.T. Kearney's Global Retail
Development Index for two consecutive years and this has
infatuated Indian as well as foreign retail players to go gaga on the
merchandising track. According to geographical expansion,
Delhi/NCR and Mumbai are the felicitated regions as the top
companies have rated the spending potential of consumers in the
vicinity of the national capital and the financial capital as excellent.
Other metros such as Kolkata, Chennai, Hyderabad and Bangalore
have caught the sight of investors but their fortunes are yet to be
illuminated. Companies like the Future Group, Reliance, Bharti-
Walmart, DLF etc. have shown the way for other to enter. The
countries are expecting a surge in the growth sprint and let’s hope
for the best.

Top Companies: An analysis

Big Bazaar is a chain of department stores in India, currently with

75 outlets. It is owned by the Pantaloon Retail India Ltd, Future
Group. It works on the same economy model as Wal-Mart and has
considerable success in many Indian cities and small towns. The
idea was pioneered by entrepreneur Kishore Biyani, the CEO of
Future Group. Currently Big Bazaar stores are located only in India.

Pantaloon Retail India Ltd, is India’s leading retail company with

presence across food, fashion, home solutions and consumer
electronics, books and music, health, wellness and beauty, general
merchandise, communication products, E-tailing and leisure and
entertainment.
In India's chaotic markets, Kishore Biyani is the
unchallenged king of retail. He has the knack of catching rivals off-
guard and striking where it hurts most. And now that he's set
himself the task of retaining control of the largest retail space in the
country, he won't let anyone - suppliers or international promoters
included - catch him slacking. The latest to face the wrath of the 43-
year-old is South African hypermarket Shop rite, which opened shop
in Mumbai last month through a franchise agreement with local
company Normal Lifestyle.

Reliance Fresh is the retail chain division of Reliance Industries of

India which is headed by Mr.Mukesh Ambani. Reliance has entered
into this segment by opening new retail stores into almost every
metropolitan and regional area of India. Reliance plans to invest Rs
25000 cores in the next 4 years in their retail division and plans to
begin retail stores in 784 cities across the country.

Subhiksha is an Indian retail chain with more than 760 outlets

selling groceries, fruits, vegetables, medicines and mobile phones. It
was started and is managed by Mr. R. Subramaniam, IIM
Ahmedabad alumni. He also plans to invest Rs.500 crore to increase
the number of outlets to 2000 across the country by 2009.

Food world is a chain of supermarket stores. It was started in May

1996 as a division of Spencer & Co, a part of the RPG Group. In
August 1999 it became a separate company. Currently it operates
89 stores in Bangalore, Chennai, Coimbatore, Erode, Hyderabad,
Kodai, Pondichery, Pune, Secunderabad, Salem, Trivandrum and
Vellore DLF Retail Developers Ltd. is one of the troikas of the DLF
Group. Besides being India's largest real estate developer, DLF is
also of the leaders in innovating shopping malls in India. It caught
public eye when it launched the 2, 50,000 sq ft. shopping mall in
Gurgaon.
Lifestyle is part of the Landmark Group, a Dubai-based retail
chain. With over 30 years’ experience in retailing, the Group has
become the foremost retailer in the Gulf. Positioned as a trendy,
youthful and vibrant brand that offers customers a wide variety of
merchandise at exceptional value for money, Lifestyle began
operations in 1998 with its first store in Chennai in 1999 and now
has 13 Lifestyle stores, 5 Home Centers and 1 Baby shop store
across Chennai, Hyderabad, Bangalore, Gurgaon, Delhi, Mumbai and
Ahmedabad.

The foundation of Shopper's Stop was laid on October 27, 1991

by the K. Raheja Corp. group of companies Shoppers’ Stop aims to
position itself as a global retailer. The company intends to bring the
world’s best retail technology, retail practices and sales to India.
Currently, they are adding 4 to 5 new stores every year with an
immense amount of expertise and credibility, Shopper's Stop has
become the highest benchmark for the Indian retail industry
Shopper's Stop in the only retailer from India to become a member
of the prestigious Intercontinental Group of Departmental Stores

(IGDS).
Vishal Mega Mart 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 fulfills all your household
needs, and can be catered to less than one roof. It is covering about
1996592 lac sq. ft. in 18 states across India. Each store gives you
international quality goods and prices hard to match. The cost
benefits that is derived from the large central purchase of goods
and services is passed on to the consumer the group had a turnover
of Rs. 1463.12 million for fiscal 2005, under the dynamic leadership
of Mr. Ram Chandra Aggarwal. 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 Vishal stores offer
affordable family fashion at prices to suit every pocket.

Wal-Mart Stores, Inc. is an American public corporation that runs

a chain of large, discount department stores. It is the world's largest
public corporation by revenue, according to the 2007 Fortune Global
500. Founded by Sam Walton in 1962, it was incorporated on
October 31, 1969. It opened its home office and first distribution
center in Bentonville, Arkansas. It had 38 stores operating with
1,500 employees and sales of $44.2 million .Wal-Mart is the largest
grocery retailer in the United States, with an estimated 20% of the
retail grocery and consumables business, as well as the largest toy
seller in the U.S., with an estimated 22% share of the toy market.
Wal-Mart is the largest private user of electricity in the US.
Owns a subsidiary electric company in Texas, and will possibly move
into the power business. It is also undertaking a number of
environmentally conscious initiatives to reduce energy usage and
waste. Wal-Mart operates in Mexico as Walmex, in the UK as ASDA,
and in Japan as Seiyu. It has wholly-owned operations in Argentina,
Brazil, Canada, Puerto Rico, and the UK. Wal-Mart's investments
outside North America have had mixed results:

Carrefour SA is a French international hypermarket chain, with a

global network of outlets. The group was created by Marcel Fournier
and Denis Deffore in 1957. It is the second largest retail group in the
world in terms of revenue after Wal-Mart. Carrefour operates mainly
in Europe, Brazil, Argentina, Dominican Republic and Colombia, but
also has shops in North Africa and Asia. Carrefour means crossroad
in French. Carrefour is active in many types of retail distribution:
Hypermarkets, supermarkets, Discount Store, Grocery Stores,
Cosmetics, and
Cash & Carry. Recently the $130 billion French retail Carrefour has
set up a 100 percent-owned arm to enter the wholesale
merchandise business in India

Latest News of Retail Market in India

 Israeli Giants Enter Indian Retail Sector Israeli mall giants, owners
of retail-linked realty assets across the world, are buying into India’s
money minting retail sector. Tel Aviv-based mall giant Gazit Globe
has tied up with one of the HDFC funds to pump in $150 million into
developing assets, including supermarket anchored retail play. Big
Shopping Group, of Israel’s biggies has teamed up with Lehman
Brothers Real Estate Private equity to set up ‘open malls’ in tier I
and tier II cities. Israeli tycoons and families, which raked in money
from core real estate developments in the US, have turned their
attention to retail assets from Sao Paulo to Macedonia, as mall
ownership and management provides attractive 20% plus
annualised returns in developing markets. Billionair eChaim
Katzman, at the helm of Gazit Globe, is no exception as he went on
acquiring shopping centers from market to market
Us Retail Major Kroger Plans Entry into Indian Real Estate The $66-
billion US based grocery giant, Kroger is all set to enter into Real
Estate India. According to reports, the company representatives
have already met 3-4 prominent real estate companies of India for
joint ventures. Some prominent sources said that Kroger is primarily
interested in jointly developing new FDI-compliant commercial
projects or buying into existing ones. Interestingly, America No. 3
general retailer behind Wal-Mart and The Home Depot runs all its
nearly 2,500 supermarket stores in the US
 Reliance Retail plans to turn Adani outlets into specialty Stores
Reliance Retail will be changing the format of its recently purchased
Adani Retail stores into specialty stores for jewelry, medicines,
eyeglasses, home furnishings, telecom and consumer electrical
stores. The company has also taken in some of the executives onto
its own team. According to a senior executive, the stores cannot be
converted to Reliance Fresh stores as they are too small, ranging
from 2,000-3,000 sq ft, while most Reliance Fresh stores are around
4,000 sq ft in size.
 Chapter (4)
FINDINGS & CONCLUSION

MAJOR FINDINGS
(1) The Retail Sector in India can be split up into two, the organized
and the unorganized. The organized sector whose size is expected
to triple by 2010 can be further split up into departmental stores,
supermarkets, shopping malls.
(2) In terms of value the size of the retail sector in India is $300
billion. The organized sector contributes about 4.6% to the total
trade.
(3) The retail sector in India contributes 10% to the Gross Domestic
Product and 8% to the employment of the country.
(4) In terms of growth the FMCG retail sector is the fastest growing
unit and the retail relating to household care, confectionery etc,
have lagged behind.
(5) The foreign retail giants were initially restricted from making
investments in India. But now FDI of 51% is permitted in India only
through single branded retail outlets. Multi brand outlets are still
beyond their reach. Again they can only enter the market through
franchisees,. This was how Wal-Mart had entered joining hands with
Bharti Enterprises.
(6) On line retailing is still to leave a mark on the customers due to
lacunae that we have already mentioned.
(7) Cultural and regional differences in India are the biggest
challenges in front of retailers. This Factor deters the retailers in
India from adopting a single retail format.
(8) Hypermarket is emerging as the most favorable format for the
time being in India

CONCLUSION
For a start, these retailers need to invest much more in capturing
more specific market. Intelligence as well as almost real-time
customer purchase behavior information. The retailers also need to
make substantial investment in understanding/acquiring some
advanced expertise in developing more accurate and scientific
demand forecasting models. Re-engineering of product sourcing
philosophies-aligned more towards collaborative planning and
replenishment should then be next on their agenda. The message,
therefore for the existing small and medium independent retailers is
to closely examine what changes are taking place in their
immediate vicinity, and analyze Whether their current market offers
a potential redevelopment of the area into a more modern
multioption destination. If it does, and most commercial areas in
India do have this potential, it would be very useful to form a
consortium of other such small retailers in that vicinity and take a
pro-active approach to pool in resources and improve the overall
infrastructure. The next effort should be to encourage retailers to
make some investments in improving the interiors of their
respective establishments to make shopping an enjoyable
experience for the customer.
 Chapter (5)
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 V S Ramaswamy, S Namakumari “Marketing Management”,

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 Business and Marketing Magazine “4ps Business & Marketing”

 Business Magazine “Business Today”

 “Changing Consumer Interface of Market Driven Innovations”-

Report by Tarun Arora, Bharti Retail

 http://www.indianretalling.com

 http://www.pantaloon.com

 http://www.financialexpress.com

 http://www.thehindubusinessline.com

 http://www.channeltimes.com