Buy our Omnibus edition featuring 4 reports covering the fast growing retail scene in India. Updated March 2008. The reports begin with an overview of Retail in India. Your purchase includes 3 additional reports on:
1. Grocery and Food Retail
2. Growth of Malls in India
3. Growth of Single Brand Stores in India
General Plans and Information
1. Shopping malls mania could lead to glut
As retailers are continuing on their furious expansion plans and real estate developers are trying to complete malls for them, there is a sense of wariness among all in the retail industry that this intense competition of mall mania could lead to a glut of malls. While the mall format is expected to be a significant factor in driving the growth of the retail industry, it could also backlash.
With the entry of so many major companies in the retail sector, the growth is likely to rise even higher, according to Merrill Lynch. Newer entrants such as Reliance, Aditya Birla Group, Bharti Walmart are looking to open stores in new areas and are driving the growth to these areas.
ICICI Property and Technopak predict that malls will account for half of the organized retail space in the next five years. The competition to existing retailers such as Pantaloon and Shoppers’ Stop will be intense, as newer players will have the lead in new territories. Sunday, April 01, 2007
Source: The Economic Times
Big players - plans and investments
1. Reliance Retail might go in for used car sales
Reliance Retail might be entering another business sector, one for used car sales, which would be similar to Maruti’s True Value and Mahindra’s Automart, which also focus on second car sales. The company had already announced its intentions to set up automobile service centers along with auto finance divisions at its retail stores. Reliance has been in talks with Corghi SpA, an Italian firm to take care of the auto servicing. Monday, April 02, 2007
Source: Business Standard
2. Wal-Mart, Bharti to sign JV agreement in April
The highly anticipated joint venture agreement between Wal-Mart and Bharti Enterprises will be taking place this month, according to Sunil Mittal, chairman and managing director of the Bharti Group. He added that details of investments had been worked out between the companies and would soon be announced. Tuesday, April 03, 2007
Source: Forbes.com
3. Big Bazaar to play BIG 92.7 FM radio in its stores
Big Bazaar and BIG 92.7 FM, an Adlabs initiative, have tied up to broadcast its radio at Big Bazaar outlets in Delhi, Mumbai, Kolkata, Bangalore and Food Bazaar outlets in Mumbai and Delhi. According to Anand Chakravarthy, National Marketing Head for BIG 92.7 FM, "Through this initiative, we would be able to make lakhs of people, who visit these outlets, sample our station. We are also working on entering into similar tie-ups with the company to play out our station at its Chennai outlets." Wednesday, April 04, 2007
Source: The Hindu Business Line
4. Bharti plans three-tier model
Bharti Retail and Wal-Mart will be settling on a three-tier retail model that will offer consumers a store within every 1.5 to 7 kms. After studying the market, Bharti has decided to have small convenience stores less than 2 kms from consumer’s homes, mid-level stores within 2-3 kms, and hypermarkets within 5-7 kms from consumer’s homes. This format contrasts with Wal-Mart’s model in the US where it’s stores are located in the suburbs of the city.
According to Vinod Sawhney, Bharti Retail president and CEO, “In India, our studies have shown we require a multi-format store structure, and for large store formats we have to consider the challenges posed by our poor infrastructure. The distance has to be convenient for customers to go to the store.”
Small stores will range from 2,000-5,000 sq ft in size and will stock fresh food, grocery and household items that are frequently purchased. These stores will also be franchised out to mom-and-pop operators. Mid-level stores will range from 25,000-50,000 sq ft and hypermarkets will range in size from 75,000-150,000 sq ft. Thursday, April 05, 2007
Source: Business Standard
5. Future Group offers consumer finance services
The country’s largest retailer, Future Group introduced its consumer finance division, Future Money, which will function under Future Capital Holdings and will provide up to 70-80% credit of the cost of purchases made at Future Group stores. The service will later be extended to purchases made at other retailers and also for home, automobiles and credit cards. Saturday, April 07, 2007
Source: The Economic Times
6. Pantaloon opens stores in Orissa
Pantaloon opened 4 Big Bazaar stores in Orissa, as part of its plan to focus on the eastern part of the country. Additional stores will be opened in the state in the next one-year. Saturday, April 07, 2007
Source: The Economic Times
International
1. Rewe tests Indian retail market
The third largest food and grocery retailer of Europe, Rewe is testing the Indian market for scope of entry. The German retailer is estimated to be worth around 42 billion Euro and has 11,000 stores in 14 countries. The retailer operates in many formats, including supermarket, discount stores and cash-and-carry.
Top executives from the company are said to be visiting India at the end of April and will be meeting top officials and policymakers on opening stores in India. The Rewe Group operates under the Billa, Merkur and Standa names for its supermarket stores and Penny Market and XXL for its discount format and transGourmet and Selgros for its wholesale format. Friday, April 06, 2007
Source: The Economic Times
Regional Trends
1. Retailers focus on Kolkata
Retailers are focusing on Kolkata even though there is a severe shortage of large retail space. Several retailers are now looking for space in the outskirts of Kolkata instead. RPG Enterprises is looking for land in Siliguri, Jalpaiguri and Durgapur for all formats of its Spencer’s stores, ranging from 1,500 to 50,000 sq ft. Pantaloon has set up its largest store in Kankugachi spread over 85,000 sq ft and Spencer’s will soon also be opening its largest hypermarket in Kolkata. Tuesday, April 03, 2007
Source: Business Standard
HR News
1. Retailers finding ways to retain top talent
Some of the leading retailers are offering attractive retention packages to top performers in an effort to hold on to them. Retailers such as Future Group, Reliance Retail, Ebony and RPG Retail are in the process of creating the ‘golden handcuff’ type of scheme, which will reduce churning at the top level. Golden handcuffs are special retention packages that induce an employee either emotionally or monetarily to stay with the company.
Future Group has a scheme that provides insurance to its top three levels of employees and their family members. The company has tied up with MetLife India and Bajaj Alliance General Insurance to provide insurance to employees at the company’s cost, and would provide the monthly salary till retirement age in case of the demise of the employee. There are other schemes for other levels of employees, which number 17,000 at present. Tuesday, April 03, 2007
Source: The Economic Times
2. Big Bazaar decides to re-employ sacked staff
After an uproar created by local labor unions and employees, Big Bazaar has decided to retain the 100 employees that it had recently fired due to surplus manpower. According to Sadashiv Naik, Head of operations (west) for Pantaloon Retail India Ltd., “They are additional employees but we have to retain them though it is difficult for us. The employees will be deployed in our outlets in and around Mumbai and Gujarat within the next five to six working days.”
The Bharitiya Kamgar Sena (BKS), which is controlled by the Shiv Sena, held protests against the sacking and led to the closing of the Big Bazaar outlets in Mumbai suburbs of Lower Parel and Mulund. The stores have estimated to have faced a 40-50% loss on daily turnovers. Wednesday, April 04, 2007
Source: The Economic Times
3. Tamil Nadu brands focus on keeping their HR personnel
The state of Tamil Nadu is readying itself for the entry of large retailers and is focusing on retaining its HR personnel, in an effort to continue their growth. According to estimates, the total retail requirement in the state of Tamil Nadu will cross 100,000.
Larger companies are constantly offering higher salaries as inducement to switch companies. Gibson Vedamani, CEO of Retail Association of India (RAI), estimates that the retail market in the southern states is worth $94 billion, with organized retailing making up only $8.5 billion. Wednesday, April 04, 2007
Source: The Economic Times
Unique formats
1. Retailers taste success in catering to plus-size market
Retailers who are targeting niche categories such as the plus size market are finding their ventures very successful, due to changing consumer perceptions and attitudes that make it easier to accept plus size clothing. With more women working and not wearing tailored clothes, regular retail stores were not meeting the need for ready made plus size clothing.
Technopak estimates that close to 30% of the population is overweight and interested in buying plus size clothing. The category is witnessing a 35% growth rate, which is sure to bring in more players. Sunday, April 01, 2007
Source: The Economic Times
2. DCM Shriram plans to invest Rs. 1.8 billion in its rural venture
DCM Shriram Consolidated Ltd. will be tripling its Hariyali Kisaan Bazaar retail stores this financial year and will be investing Rs. 1.5-1.8 billion for its expansion. The company plans to open stores in Andhra Pradesh, Maharashtra and Karnataka. At present Hariyali Kisaan Bazaar’s are located in Punjab, Haryana, Rajasthan, Madhya Pradesh, Uttar Pradesh and Uttarakhand. In the meantime, DSCL will continue working on making Hariyali Kisaan Bazaar it’s own company, separate from DSCL, in an effort to achieve faster growth. Monday, April 02, 2007
Source: Business Standard
3. Shoppers’ Stop and Nuance Group bag retail concession at Hyderabad airport
Shoppers’ Stop and the Nuance Group have bagged the retail concession at the Hyderabad airport, which is to be operated by the GMR group. The firms will have a 7-year contract for 28,450 sq ft of space and will start its operations in March 2008. Revenues are expected to be in the rage of $240 million. According to T. Srinagesh, CEO of GMR Hyderabad International Airport Ltd (GHIAL) said that 6 stores will be set up, three in the domestic terminal and three at the international terminal. Thursday, April 05, 2007
Source: The Hindu Business Line
4. Hindustan Lever to sell Sangam retail business
Hindustan Lever announced that it would be selling its non-store home delivery business, Sangam to Wadhawan Foods Retail. The company had been wanting to try out the Sangam Direct brand in Mumbai before expanding it on a national level. Thursday, April 05, 2007
Source: nasdaq.com
Sector specific
Apparel & Footwear
1. Thomas Scott looks to enter casual wear market
Men’s wear brand Thomas Scott will be expanding into new segments of the market, in terms of location as well as segments. The company will be focusing on the Kolkata market for its expansion, which will include setting up 100 stores across the country by 2008. The company will also be getting into men’s casual wear as well as ladies wear, offering all of its brands under one roof. Tuesday, April 03, 2007
Source: Business Standard
2. Raymond to expand retail footprint
Raymond launched its 350th store and announced that it will be expanding to 950 stores across the country by the year 2010. The company will invest approximately Rs. 5 million in setting up each store, which will have an average size of 2,500 sq ft.
Raymond’s brands include Park Avenue, ColorPlus, Manzini and Parx, which will all be available under one roof at these new stores. The company has over 1 million sq ft of retail space and is well placed in tier II and tier III towns already, where the majority of the retailers are racing to set up stores. Thursday, April 05, 2007
Source: The Hindu Business Line
3. Arvind Brands to open 13 Nautica stores
At the launch of its sixth Nautica store, Arvind Brands announced that it will be opening 13 additional Nautica stores and investing Rs. 200 million in the coming year. New stores will be opening in smaller towns such as Jalandhar and Amritsar and metros such as Bangalore, Hyderabad and Delhi. Ten of the 13 new stores will be standalone format stores and the remaining three will be located in luxury malls. Friday, April 06, 2007
Source: The Economic Times
4. aLL to increase presence
Plus size store aLL (a Little Larger) which is part of the Future Group, will be expanding to increase its stores to 50 by 2010. At present, there are nine aLL stores in the country, in cities such as Mumbai, Ahmedabad, Baroda, Indore and Bangalore. Some of the newer stores will be exclusive standalone stores and others would be in the store-in-store format. Friday, April 06, 2007
Source: The Hindu Business Line
Home Furnishings
1. Future Group launches home décor chain, Home Town
The Future Group launched its home décor chain, Home Town with its first store in Noida. The company is investing Rs. 200 million to open a total of 9 outlets in cities such as Ahmedabad, Bangalore, Gurgaon, Hyderabad, Kolkata and Lucknow which will open in the next eight months. Future Group is expecting revenues of Rs. 2-3 billion from these stores.
The target customer of the stores are consumers with rising disposable incomes and middle class people who had earlier not paid much attention and money on decorating their homes. The retailer will also offer credit through its in-house lending arm. Future Group will be doubling its sq footage from its current 5 million sq ft to 10 million sq ft within a year and is opening a new store everyday. Friday, April 06, 2007
Source: The Economic Times
Food & Grocery
1. Coca-Cola to open lounges
Coca-Cola India will be launching a chain of lounges called the Red Lounge as a one-stop destination for all Coke products. The first of these outlets will be opened in Pune and depending on the feedback, more stores will be opened across the country. The lounge will serve as a place for young people can relax, chat, watch TV, play video games, surf the net and catch up with their friends. Coca-Cola has such lounges in the US and Singapore already. Friday, April 06, 2007
Source: The Hindu Business Line
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