ABHINAV SRIVASTAVA

by- ABHINAV
SRIVASTAVA
Agenda
Retailing : An overvi
Retail Evolution in In
Indian Retail Industr
Retail Formats
The Change Factor
Retail Strategies
Food Retailing
Retailing: An Overview
l Retailing
Ø World’s largest private industry

Ø US$ 6.6 trillion sales annually

l Indian retailing
An v Largest employer after agriculture - 8%*

overview of population

v Highest outlet density in world

v Around 12 mn outlets

v Still evolving as an industry

v Long way to go
 Most Powerful
Retailers Fortune 100
10 Retailers

v Wal-Mart,
v Carrefour,
An v A hold,
Overview v Home Depot,
v Kroger,
v Metro,
v Kmart-Sears,
v Target,
v Albertsons
GLOBAL RETAIL
Percentage of Organized Retail
USA - 85%
Taiwan - 81%
Malaysia - 55%
Thailand - 40%
Brazil - 36%
Indonesia - 30%
Poland - 20%
China - 20%
India - 3%
South east Asia
Retail Market
Retail Evolution in India
 Modern
Historic Traditio Governm Formats/
/ nal ent International

Rural Supporte Exclusive Brand

Reach d Outlets
Reach
Hyper/Super
Markets
Department Stores
Shopping Malls
PDS Outlets
Khadi Stores
Cooperatives

Convenience
Stores
Mom and Pop/
Weekly Kiranas
Markets
Village Fairs
Melas
Neighbo Availab Shoppin
Source rhood g
ility/
of Stores/ Low Experien
 TOP 10 Players in Retail Sector

•Shoppers' Stop
•Westside (Trent)

•Pantaloon (Big Bazaar)

•Lifestyle

•RPG Retail (Foodworld,

Musicworld)
•Crossword

•Wills Lifestyle

•Globus

•Piramals ( Pyramid & Crosswords)

•Ebony Retail Holdings Ltd.

Indian Retail - Facts
Retailing of mobile handset and accessories will grow to Rs. 5000 crores by 2010

Third party logistics market is estimated at US$ 20 billion by 2011.

Demand for private labels in the rise, will grow further.

In-house brands will see a growing demand amongst the retailers and will also ensure
margin stability.

FMCG industry has introduced 251 new products up to October 2007, as

against 191 in the same period last year.
India's food and beverages sector, growing at 9%, is expected to attain US$
117.25 billion by the end of this year

With 54% of its 1.1 billion people aged below 25, it is one of the world's largest
markets for TV.

India's food service industry is expected to grow 48% to US$ 667.49 million in
the next two years.

According to a report by PriceWaterhouse Coopers, India could grow to almost

90% of the size of the US economy by 2050
 TYPES OF RETAILING
ORGANIZED UNORGANIZED

Formal Retailing Informal retailing

Sector Sector
Typically large Typically small
retailers retailers.
Greater Evasion of taxes
enforcement of
Difficulty in
taxation
enforcing tax
mechanisms
collection
High level of labor mechanisms
usage monitoring
No monitoring of
Organized
retail
unorganized
 Categories of Retail
l 1.Corporate Houses
● Tata: Tata Trent
● RPG group: Food World, Health and Glow, etc
● ITC: Wills Life Style
● Rahejas (Shoppers Stop), Hiranandani (Haiko), DLF(DT cinemas)
etc.

l 2.Dedicated brand outlets

l Nike, Reebok, Zodiac etc

l 3.Multi-brand outlets
l Vijay Sales, Viveks, Big Bazaar etc

l 4.Manufacturers/ Exporters
l Pantaloons, Bata, Weekender
 Retailing Formats in
India

l Modern Format retailers

l Supermarkets (Food world)
l Hypermarkets (Big Bazaar)
l Department Stores(S Stop)
l Specialty Chains (Ikea)
Indian retail l Company Owned Company Operated

l Traditional Format Retailers

l Karana's: Traditional Mom and Pop Stores
l Kiosks
l Street Markets
l Exclusive /Multiple Brand Outlets
Malls
Ø The largest form of organized retailing today. Located
mainly in metro cities, in proximity to urban outskirts.
( Forum, Gopalan and Garuda Malls in Bangalore)

Ø Ranges from 60,000 sq ft to 7,00,000 sq ft and

above. They lend an ideal shopping experience with an
amalgamation of product, service and entertainment, all
under a common roof.

Ø Examples : Shoppers Stop, Pyramid, Pantaloon.

FORUM
MALL
GARUDA
MALL
GOPALAN
MALL
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
Large stores ranging from 20000-50000 sq. ft, catering to a
variety of consumer needs.

Further classified into localized departments such as

clothing, toys, home, groceries, etc.

E.g: SHOPRITE in Bangalore

HYPERMARKETS
Size of the Market: 30000 to 1.5 lakh sqr ft
S K U’S: > 25000 Food & Non-food items
Value Propositions :Diverse offerings & high quality
products & services at prices which may be up to 10-20%
lower than those in supermarkets & department stores
Location: Non prime locations, outskirts of major towns &
cities.
Super Market
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.
MBO’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

Metro.
CASH & CARRY
v Size of the Market : >1 lakh sqr ft
v Target Customers : Institutions & Retailers
v Value Proposition : Bulk packs at low prices
v Location : Out of the Town

v Membership Requirement
E-TAILING

Electronic retailing, or e-tailing, refers to the practice of selling

goods and services over an electronic medium like the Internet.
Many traditional brick-and-mortar firms like Toys 'R' Us and
Barnes and Noble also sell their wares via Web sites.

Other companies, such as Amazon.com

books, CDs, and computer software and hardware are the most
common goods sold by E- tailers
clothes, cosmetics, perfume, plants, toys, and other types of
merchandise also selling through E- tailers.
Retail formats
summary
Basis of Super market Hyper market Cash & carry
Differentiation
Average Size 2000 – 8OOO 30000 – 1.5 1 lakh + sqr ft
sqr ft lakh sqr ft
Target Household Household Institutions &
Consumer Retailers
Value Variety, quality Diverse Bulk packs at
proposition & service. One offerings, price low prices
stop family < 10-20% of
Shop Supermarkets
& Department
stores

Location Town centre/ Outskirts of Out of Town

The Change Factor
Reasons……
Moderation in the growth rate has come with some good
news, with the country's per capita income expecting to
more than double over the last seven years to Rs 38,084
in 2008-09, reflecting improvement in the living
standards of an average Indian.

Changing Indian consumer preferences

• Disposable income of Middle class : 20.9%* growth
in real disposable income in ’99-’03.
STRATEGIES OF SCM
IN RETAIL
Strategies…
DISTRIBUTION:
HUB & SPOKE METHOD
CROSS DOCKING SYSTEM

TECHNOLOGY:
POINT OF SALE
RFID
BAR CODE
Food Retailing
Introduction

Food Industry grows @ 40 % annually and

projected to grow at same pace ahead.

Domestic Food Retailer worth $ 60 crore

Food Retailing Products

 Fruits & Vegetables

 Staples
 Confectionaries
 Beverages
 Frozen / Chilled Products
 Ready to Eat Foods
 Ready to Serve Foods
 Ready to Cook Foods
 Food Addictives
Leading Food Retail
Brands
1. Mc Donald’s
Ø 1996 - Launched first in India.
Ø In India, joint venture managed by two groups

Hard castle Restaurants Pvt Ltd – West & South India

Connaught Plaza - North & East India

Ø First country does not offer Beef & Pork Items

Ø More than 31,000 restaurants in 119 countries worldwide

Ø 160 restaurants across India

Ø Plans to add 35 – 40 restaurants this Year

2. YUM BRANDS

Offer services in two Formats

Ø Kentucky Fried Chicken (KFC)

Ø Pizza Hut
v KFC
Ø Launched in 1993 and re-
launched in 2004
Ø Offer Fast Food Services
Ø At present 46 stores outlets in 11
cities
Ø Plans to open 75 outlet within
2009 and 130 within 2010

v Pizza Hut
Ø 147 outlet in India
Ø 12,500 restaurants across 91
3. Domino’s Pizza

Ø First launched in 1996

Ø 22 outlets in 42 cities

Ø Leads in fast food delivery segment

Ø At present > 8500 stores functions across 55

International Markets
4. NIRULA’S

Ø Foundation laid with ‘Hotel India’ in 1934

Ø In 2006, acquired by Mr Samir Kuckreja & Navis Capital Partner

Ø Diversified into other retail formats like

Ø Express outlet
Ø Ice Cream Kiosks
Ø Food Courts etc

Ø Presently 62 units across India

Ø Plans to increase 200 by 2011

5. CITY MAX HOSPITALITY

§ Part of Dubai based landmark group

§ Master Franchise of Specialty coffees like

§ Australian Coffee Chain
§ Gloria Jeans coffees

§ Currently 5 outlets in country

§ Plans to open 20 more in 2009

6. BARISTA

§ Started in 2000

§ Witnessed 25 % growth

§ Plan to double the store in next three years

§ Lounge format is to upgrade consumer to next level of

Barista Experience

§ Barista Crème – newly developed for Premium chain of

Cafés
7. CAFÉ COFFEE DAY

Ø Part of India’s Largest Coffee Conglomerate named

Amalgamated Bean Coffee Trading Company Ltd

Ø Pioneer in Café concept and first Café at Brigade road in

1996

Ø Currently owns 745 Cafes in around 111 cities

Ø Plan to have 900 by end of Fiscal Year.

Ø ‘Coffee Day Square’ – newly introduced Format

OPPORTUNITIES

94 % of Food


Sector is under
Unorganized

 India’s urban
 CHALLENGES

 Stiff Competition from International

Players

 Increasing Rentals in Malls & High

Streets

 High level of attrition, licensing Issues

 Increasing Real Estate Prices

 Operational Issues like Quality,

Merchandise management

• Process by which retailer attempt to offer the

right quantity of the right product at right place
and time.
• Components of merchandise magt.

analysis

planning Merchandise magt. control

acquisition handling
 NEW STRATEGIES IN in-STORE
MERCHANDISING.
A transforming economy has reinvigorated
merchandising effort, but the face of
merchandising has fundamentally changed.
After moderating slightly in 2007, decline in
presence in traditional grocery display has
accelerated. - Displays are here to stay.
Innovation is driving the industry: in-store
TV, RFID-based electronic shelf-talkers,
digital screens.
To compete in a transforming economy,
marketers are relying heavily on price to
drive purchase.
Clear communication of a solid value
proposition is critical to retailers’ basket
building efforts.- Marketers are well focused
on merchandising that is in alignment with
consumer goals rather than as simply a means
of selling more product.
Grocery retailers must reduce reliance on
price only strategies,and turn to
affordable meal solutions that target key
consumer segments on a market level.
Consumer response to merchandising
efforts has eroded slightly overall, but the
pace of erosion has slowed across
channels.
High-response categories play a key role
in driving traffic and building basket size.-
Categories which are typically high-use
categories with a long shelf-life, present
significant opportunity for retailers and
manufacturers.