Latest News and Events from the Indian Retail Sector

Weekly Retail News from India

General Plans and Information

1. Retailer band together to raise quality standards
Some of the country’s high profile retailers are coming together to raise the standards of the quality of customer service as well as the quality of products that is being provided at retail stores. Companies such as Pantaloon, Reliance, Bata and ICICI Bank are joining together to set higher standards for the services they provide. While competition is making some companies offer a higher quality of service, there is no formal standard to serve as a benchmark in the service sector in India.

This new endeavor to improve service standards is being led by FICCI, an industry association that combines consumer and government bodies. According to H Lal, FICCI’s quality forum director, “With the boom in the services sector, it was only imperative for the industry to set a standard for themselves in terms of quality, which has close links with their bottomline.” The agency is keen not only on creating standard quality levels and procedures but in implementing and training employees in them.
Thursday, April 12, 2007
Source: The Economic Times

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Big players - plans and investments

1. Bharti-Wal-Mart deal to be formalized this month
Sunil Mittal, the chairman on Bharti Enterprises announced that the highly anticipated deal between Bharti and Wal-Mart would be formalized this month. The company hopes to start its first store by early 2008 and is looking fro 10 million sq ft of retail space in the country, to open hypermarkets, supermarkets and convenience stores.
Wednesday, April 11, 2007
Source: The Economic Times

2. Kishore Biyani changing how Future Group runs
The founder and promoter of India’s largest and most successful retail company Future Group, Kishore Biyani is implementing several changes in the way his company runs. There is now a new structure in place and he himself has opted out of operations, giving the control to his younger brother, Rakesh Biyani.

Each of the company’s retail divisions such as Big Bazaar, Pantaloon, Central and Food Bazaar have been given CEO’s to run them. These formats will soon be placed in a holding company called Future Retail, which will have stakes in all the companies. The idea behind the restructuring is to give its ‘mature’ businesses the chance to function like independent divisions so they can form JV’s with international retailers.
Thursday, April 12, 2007
Source: The Economic Times

3. Bharti Retail is thinking big
In an interview with Surajeet Das Gupta in Rediff, Vinod Sawhney the president and CEO of Bharti Retail spoke about the company owning the retail stores and Wal-Mart taking care of logistics, sourcing and back end work, via a joint venture agreement that is to be finally to be finalized this month. The company will be following a similar approach in the retail venture as it did with telecom, where mobile penetration was at a very low level then they started. Likewise, organized retail penetration is around 3% and is expected to increase to 12-15% by 2010.

He added that the company is optimistic on growth figures due to the large size of the top two levels of the consumer class, which is currently estimated to be around 50 million.

On the notion of large retailers driving small mom-and-pop retailers out of business, Sawhney said that their smallest stores would be more than 2,000 sq ft, while most mom-and-pop stores are around or smaller than 500 sq ft, so there will be no direct competition between the two. On their USP, he said that the company would be focusing on offering the best price, experience as well as quality.
Friday, April 13, 2007
Source: Rediff Money

4. US based anti-Wal-Mart activist coming to India to mobilize opinion against retailer
One of Wal-Mart’s most vocal activists, Wade Rathke is coming to India to mobilize public opinion against the retailer and has even sought a meeting with the Congress President Sonia Gandhi and the Prime Minister Manmohan Singh in this regard. Rathke is the chief organizer of the Association of Community Organizations for Reform Now (ACORN), the same organization that was behind the movements against the retailer in South Korea and Germany.
Saturday, April 14, 2007
Source: The Economic Times

HR News

1. Reliance Retail restructuring management
Reliance Retail is changing the way its management is structured from a vertical structure to a store based structure starting off from May 1st 2007. As per the new organizational structure, Bhavdeep Singh will become the new head of Reliance Fresh; S Radhakrishna will be the new head of the hypermarket division which is likely to be called Reliance Hyper Marts; and Ajay Baijal will be the new head of Reliance Digital, the company’s consumer electronic and IT brand. Other heads of specialty chains will be decided at the time of their launches.

The human resources department will also see a change, which Uday Bhende as its new head, who will take over from Bijay Sahoo. Several of the new recruits are fresh from the US; Bhavdeep Singh worked with a retail chain there and Uday Bhende was with Siemens earlier. S Radhakrishna joined from Spencer’s last year and Ajay Baijal was poached from Reliance Communications after the early departure of Rajeev Karwal.
Wednesday, April 11, 2007
Source: The Economic Times

Unique formats

1. Specialty malls could be the key to retail success
Specialty malls for niche retail areas such as jewelry are of the focus areas of retailers as well as real estate developers. While there are only a few specialty malls in the country at present, the Retailers Association of India (RAI) estimates that these malls will account for 10% of total malls in the country in the next three years.

The most famous of these specialty malls is jewelry-focused mall, the Gold Souk Mall that has been developed by the Aerens Gould Souk Group. Bangalore’s Prestige Group has redone its Eva Mall into a super-specialty mall focusing only on ethnic Indian women’s wear. Alpha Medical Services has launched the Alpha Family Health Mall in Kolkata and the Merlin Group has developed Home Land, a home furnishings dedicated mall.

While footfalls are much lower at these malls, conversion rates are significantly higher. According to real estate and retail analyst Susil Dungarwal, "Conversion rate in a specialty mall is nearly 65 per cent while it is only 18-20 per cent in a general mall. The reason is that generic malls attract anybody and everybody but the specialty malls offer a focused merchandise to the consumers."
Sunday, April 08, 2007
Source: The Hindu Business Line

2. Tata Group ties up with Xander to fund retail expansion
To fund its retail expansion, Tata’s have tied up with Xander, a private equity investor who will develop real estate properties for Tata’s retail ventures. The Tata group is the second largest business house in the country and is looking to expand on a pan-India level at a fast pace.

According to the agreement between the two companies, Tata’s retail division, Trent will hold the anchor tenancy rights and mange the portfolio along with Xander. A statement that Trent released stated that, “The arrangement will be of considerable help to the company in its growth plans in the retail sector, including in the current formats like Westside, Landmark and Star India Bazaar.”
Tuesday, April 10, 2007
Source: The Economic Times

3. Future Group close to leasing retail space to top retailers
The Future Group is reportedly close to leasing around 20 million sq ft of retail space in Kolkata to retailers such as Reliance Retail, Trent, Lifestyle and Shoppers’ Stop. The company will be adding around 15 million sq ft of space by the year 2010 and will then develop another 56 malls. The venture is being taken care of by Kshitij Investment Advisory, the Future Group’s asset management company.
Tuesday, April 10, 2007
Source: The Economic Times

Sector specific

Apparel & Footwear

1. Raymond looks to dress women too
The company that has been famous for dressing men and has built it’s brand as “The complete man”, will now be offering products for women as well. Pradeep Bhandari, group president of Raymond said that the company conducted research and found that a lot of women purchase fabrics at Raymond and get it stitched at local tailors, so this is the company’s way of providing the same service that they to do for men to women as well. The company has signed a MoU with the National Institute of Fashion Technology (NIFT) who will be training tailors for them.
Tuesday, April 10, 2007
Source: Business Standard

2. Arvind Mills plans to open 100 Megamart stores
Arvind Mills is planning to open close to 100 Megamart stores across the country over the next five years. The stores will be mainly focused on tier II towns and cities. At present, the company has 54 outlets in 16 cities and receives over 150,000 footfalls each month and covers 150,000 sq ft of retail space. The company will be opening 10 stores in the current financial year in cities such as Vishakapatnam, Guntur and Warangal.
Tuesday, April 10, 2007
Source: The Economic Times

3. Arvind Mills to revamp Arrow brand
The Arrow brand will be getting a complete redoing and will be pay greater attention to womens wear and semi-casual clothing. The line of denim wear will also be increased. The Arrow brand is owned by US based Phillips-Van Heusen Corp and Arvind is a 100% licensee of the Arrow brand in India. The Arrow brand will not be available in tier II cities; it will be sold at the retailer’s discount chain store Megamart.
Friday, April 13, 2007
Source: The Economic Times

Consumer Durables

1. Landmark Group to open 40 Emax stores
Dubai based Landmark group will be investing over Dh 500 million to open 40 electronic outlets in the GCC and India under the Emax brand in the next five years. There are 8 Emax stores in the GCC countries and the company hopes to open stores in India by next year.
Monday, April 09, 2007
Source: Indiaretailing.com

Food & Grocery

1. Reliance Retail opens in Ahemadabad, plans to open 180 stores in Gujarat
Reliance Retail will be opening 180 food and grocery stores in the state of Gujarat under its Reliance Fresh brand in the next six months. The stores will be located in 16 cities across the state. The announcement was made at the launch of nine Reliance Fresh stores in Ahmedabad. The company will open the first 45 of these in the next month itself, in cities like Vadodara, Surat, Jamnagar, Bhavnagar and Rajkot.
Monday, April 09, 2007
Source: The Economic Times

Pharma

1. Fortis will open 140 HealthWorlds
Fortis HealthWorld announced that it would be opening 140 additional retail stores by the end of the 2007-08 financial year in the northern region alone. The first of these HealthWorld stores will open in Chandigarh in the next three months. Currently there are 10 outlets in Delhi and the NCR. The HealthWorld stores will offer consumers over the counter drugs, health foods, untraditional supplements etc and will remain over all 24 hours.

According to Aashish Kirpal Pandit, CEO of Fortis HealthWorld, “We would spend close to Rs. 8 billion to establish 1,000 Fortis health stores across India in five years i.e. by 2012. So far the funding part is concerned it, it would be funded by Singh’s family of Ranbaxy.” Stores will vary between 500 ft and 2,000ft depending on the city. In general, all cities with populations of over 350,000 will have HealthWorld outlets.
Friday, April 13, 2007
Source: Business Standard