Latest News and Events from the Indian Retail Sector

Weekly Retail News from India

General Plans and Information
Big players - plans and investments
International
Regional Trends
Support Industries
Sector specific

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General Plans and Information

1. Large retailers pull in mom-&-pop retailers
Several large retailers are bringing in small mom-&-pop retailers to open up as many streams of revenue as possible, and will help in building the image of the large retailer as a good and compassionate company. These partnerships between large retailers and small stores are also due to the competitive prices being offered by cash and carry stores.

A Reliance Retail official added that, “We are also exploring the franchisee model to partner with the smaller stores in segments like food & beverages, farm products, FMCG, pharmaceuticals, lifestyle, apparels and footwear.” Metro is building its base of small retail stores by offering special discounts and training systems to improve their competitiveness.
Monday, May 21, 2007
Source: The Economic Times

2. New CII chief Sunil Mittal defends organized retail
Addressing his first press conference as the president of the Confederation of Indian Industry (CII), Sunil Mittal said that retail is expected to grow to a $500 billion industry in India in the next 10 years, of which organized retail will only account for $100 billion and the balance of growth will take place in the unorganized sector. Currently, the retail industry is worth $300 billion.

He added that small retailers across the world have not been eradicated with the growth of organized retail, and in the US even grew by 2%. He addressed the concerns of people losing jobs and countered that retail will require even more people than ever before, not only in stores but for packing labeling, logistics etc. Regarding Prime Minister Manmohan Singh’s remarks to curb high salaries, he said that these were an indication of the shortage of quality professionals.
Friday, May 25, 2007
Source: The Hindu Business Line

Big players - plans and investments

1. Pantaloon Retail’s insurance JV to be formalized soon
Pantaloon Retail’s insurance joint venture with Italian company Assicuranzioni Generali is set to get the permission from the Indian Regulatory and Development Authority (IRDA) and start operating soon. The Generali Group is the third largest insurance group in Europe.
Monday, May 21, 2007
Source: The Economic Times

2. Bharti denies any problems in JV with Wal-Mart
Bharti reiterated that it was still finalizing details of its joint venture with Wal-Mart and denied any problems in the agreement or with Wal-Mart as has been reported in the media. Akhil Gupta, Bharti’s managing director, said that it was just a matter of time till the agreement was completed.
Friday, May 25, 2007
Source: Reuters

International

1. Dunhill to open stores in India
Alfred Dunhill, luxury men’s brand from the UK, will be opening four stores in the country and has tied up with Brandhouse Retail Ltd. for its India venture. Brandhouse Retail is a subsidiary of S Kumar’s Nationwide Ltd. The four stores will be opened in two years and another 4-6 stores are being planned for the next five years. Cities such as Delhi, Mumbai and Bangalore are being targeted. The first store will be in Shangri-La Hotel in Delhi.
Monday, May 21, 2007
Source: Just-Style

2. Marks & Spencer makes ambitious plans for India, China
UK based department store chain; Marks & Spencer has made aggressive plans of expansion for India and China. The company’s chief executive Stuart Rose unveiled its international expansion plans after he announced that the company had achieved a pre-tax profit of GBP 965.2 million till March 31, 2007. The company has set up stores in India via a franchising agreement and will be setting its international plan in November this year.
Wednesday, May 23, 2007
Source: DNA India

3. Office Depot to open stores in India via franchises
The world’s largest stationery and office supply store, Office Depot will be setting up stores in India using a franchising agreement. The company has reportedly been studying the market for the last three years and had been hoping that the government would open up FDI policies to allow it to come as a wholly owned subsidiary.

There has been a lot in interest in this segment, especially since the government was keen to open up FDI up to 51% for stationary and office supplies stores. Staples, another larger US based office supplies retailer, has tied up with Future Group and there has been a lot of interest from other companies as well.
Wednesday, May 23, 2007
Source: The Economic Times

4. Wal-Mart advised small retailers to “learn to change”
The world’s larger retailer said that smaller retailers should “learn to change” and create a niche for themselves rather than compete with the large retailers like Wal-Mart. A Wal-Mart official speaking to a TV news channel said that, "What we have found is that these mom-n-pop stores choose to compete with large companies head-to-head instead of finding a niche or specialisation. "They will struggle, they might succeed, but it's likely they'll struggle. So they have to learn to change in order to survive."
Wednesday, May 23, 2007
Source: CNN-IBN

Regional Trends

1. Convenience store boom in Delhi
New convenience stores and supermarkets are opening in Delhi at every second corner and it is estimated that there will be a supermarket for every half-mile in the city by 2010 when the Commonwealth Games are to take place. Compared to a few years ago, there were only 5 supermarkets per half-mile in 2004. Customers are happily switching to these modern stores due to its air-conditioned comfort and long shopping hours that suit most working professionals.

Big Apple is one such convenience store chain that is taking advantage of this sentiment and has opened 22 stores in the city in the past two years, and will be continuing to open stores in an aggressive manner.
Wednesday, May 23, 2007
Source: DNA India

Support Industries

1. Wal-Mart likely to use Mumbai based company for logistics
Wal-Mart is holding talks with Mumbai based Radhakrishna Group for either a tie up or acquiring stake in its logistics division, Radhakrishna Foodland. Senior Wal-Mart executives have reportedly visited the company’s logistic facilities and are discussing what kind of partnership could be worked out. Radhakrishna Foodland initially was an in-house logistics company but now provides services to some of the top retailers as well as other companies, including Pantaloon, Metro Cash and Carry, McDonalds, Subway, Pizza Hut, Cadbury, ITC and many more.
Thursday, May 24, 2007
Source: The Economic Times

Sector specific

Apparel & Footwear

1. Reliance Retail interested in tying up with Bata
Reliance Retail and Bata are reportedly in talks for a tie up. Reliance Retail’s footwear segment is being taken care of by G Sankar, who is targeting a turnover of Rs. 30 billion for the segment. G Sankar was earlier the MD of Lifestyle India. If this tie up were to go through, then all Bata showrooms in the country would retail footwear brands by Reliance and Bata’s products would be sold at Reliance stores in return. Bata has more than 1,000 stores, which would give Reliance a huge base to start from.
Wednesday, May 23, 2007
Source: The Economic Times

Food & Grocery

1. Spencer Express to lower prices in introductory offer
Spencer Retail is promoting itself as offering cheaper prices by Rs. 1-2 for fruits and vegetables at its newest store in Kolkata. The low prices are a marketing strategy to bring in customers to try out the store and prices will be kept competitive later on. The company stated that it will not be getting into a price war with other food retailers, but rather focus on convenience it offers customers as its USP.
Monday, May 21, 2007
Source: Business Standard

2. Reliance Retail to open 11 stores in Nashik
Reliance Retail will be opening 11 Reliance Fresh stores in Nashik this year, of which the first five will open by July this year. The company is focusing on opening stores in the city, as it is a major city in the region. Its stores will carry fresh fruits and vegetables, grocery and dairy products, along with the companies own in-house brand of products, Reliance Select.
Thursday, May 24, 2007
Source: Business Standard

3. Food Bazaar interested in dealing with farmers directly
Future Group’s food retailing division, Food Bazaar is keen on forming direct relationships in the form of contract farming with farmers, which is expected to cut the cost of its farm products by 20%. At present, only 20% of produce is sourced directly from farmers, which the company wants to increase to 50% by next year.
Thursday, May 24, 2007
Source: Business Standard

Jewelry & Watches

1. Gitanjali Gems to establish lifestyle division
Jewelry retailer Gitanjali Gems will be establishing a lifestyle division called Gitanjali Lifestyles Ltd (GLL) to retail jewelry, watches, clocks, leather products, eyeglasses, perfume, cosmetics and similar products. Gitanjali has partnered with an Australian company called Just Cuts and will also be opening a chain of 250 salons with it in the next four years.
Monday, May 21, 2007
Source: The Economic Times