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. India has the maximum number of shopkeepers
India has the maximum number of stores per person in the world, averaging 11 stores per 1000 people, more than Singapore, UK and US. It is estimated that India has one store for every 20-25 families, while in Delhi it is estimated that there are close to 45 shops for every 1000 persons. The study was conducted by FICCI, which also estimates that of the 12 million retail stores in India, 96% are less than 500 sq ft. Friday, December 15, 2006
Source: The Economic Times
Big players – plans and investments
1. Munjals join retail bandwagon
The $3.2 billion Munjal owned Hero Group will be entering the retail sector and is looking for an international joint venture partner. According to Pawan Munjal, managing director of Hero Honda, the company is entering organized retail in India, even though there is tough competition. He added that, “Retail, which is likely to emerge as a major sector in the Indian market, is one of the core areas of our future growth strategy.”
The Hero Group has also started a company called Aero Infrastructure Ltd which will be focusing on developing institutional infrastructure in India, and has identified real estate development such as residential complexes, shopping malls, community complexes and hospitals as the major areas that it will be entering. Monday, December 11, 2006
Source: Business Standard
2. Future Group switches account to Starcom
The Future Group has switched its media agency and has selected Starcom to handle its account which is around Rs. 2-2.5 billion and is said to be one of the largest accounts in the past five years. The company was earlier with Carat for the past two years. As Pantaloon expands across all formats and is rapidly increasing its sq ft space from 4 million sq ft to 30 million sq ft, the company is also looking for creative agencies. At present the company uses Mudra for its value retail segment and Percept for its lifestyle retail segment. Monday, December 11, 2006
Source: The Economic Times
3. Reliance Retail hastens expansion
Reliance Retail is understood to be ready for its second phase of expansion sooner than earlier expected and has already started its cash & carry format stores, Ranger Farms in Hyderabad. In the next two months, the company will be launching its Specialty stores and Hypermarkets. In the next few days, Reliance Retail stores will be opened in several cities, such as Jaipur, Delhi, Kochi, Bangalore and Chennai.
Its first Ranger Farm outlet opened in Hyderabad and will be opening in Jaipur next week. Ranger Farms are wholesale suppliers of fresh fruits and vegetables for small push cart vendors and other small merchants. The stores will function only from 2am to 9am. Thursday, December 14, 2006
Source: DNA Money
International
1. SuperValu to set up IT operations in Bangalore
US based SuperValu, a $44 billion company and the third largest grocery chain in the country will be starting operations in Bangalore to support its IT requirements. The company will be investing $50 million (Rs. 2.3 billion) in the next five years. The Indian division, SuperValu Services India (SSI) will employ 50 people, eventually growing to 300 IT professionals in the next 12-18 months, which will be supported by 1,800 associates at three different locations in the US. In the past, SuperValu has worked with Indian vendors such as TCS, Infosys, Wipro and IBM and hopes to continue working with them despite having their own set up. Wednesday, December 13, 2006
Source: Business Standard, The Hindu Business Line
2. Provogue ties up with Liberty International to manage shopping centers
Provogue (India) Ltd announced that it had tied up with UK based Liberty International to develop and manage shopping centers in the country. Liberty is one of the largest shopping center developers in the world and has bought a 25% equity in the JV, Prozone Liberty for an estimated Rs. 2.02 billion. The remaining stake will be owned by Provouge.
There will be two board of directors from Liberty and four from Provogue. According to David Fischel, CEO of Liberty, “We have been coming to India for the past four to five years to scout for opportunities in the retail sector.” In its first phase, the JV will set up 6 shopping centers in tier II cities such as Surat, Aurangabad, Mysore and Indore. Thursday, December 14, 2006
Source: The Economic Times
3. Wal-Mart plans to export farm goods
Wal-Mart has made plans with Bharti to export farm produce in India and develop back end links to the agricultural sector, in an effort to replicate its successful global supply chain. The company plans to use its modern information systems and supply chain management to benefit Indian farmers.
The company refused to divulge critical detail about the plan; Wal-Mart said that it would be sourcing agri-products from India for the first time. The company has sourced $414 million worth of apparel, home textiles, fine jewelry and house wares from India in 2005. Saturday, December 16, 2006
Source: The Economic Times
Support Industries
1. Retailers eye container trains for transportation
Several companies such as Reliance Retail, Transport Corporation of India, Mitsui OSK Lines, Hyundai Merchant Marine and NYK Lines, and The Future Group have shown keen interest in setting up private container train operations. The interest is in response to the Railway Ministry’s invitation for proposals in the second round of licenses for interested parties for container trains.
Currently, only Concor, a public sector company that is controlled by the railway ministry is permitted to run container trains in the country and therefore has a monopoly in the sector. Railways offer a substantial savings as compared to road transport, around a third of the cost of road transport. Wednesday, December 13, 2006
Source: Business Standard
HR News
1. Reliance Retail loses 5 executives to Subhiksha
Soon after the leaving of Rajeev Karwal, Reliance Retail has lost five middle and senior level executives to food and grocery chain Subhiksha. According to R Subramaniam, MD of Subhiksha, the new entrants from Reliance Retail have “joined at assistant vice-president and vice-president levels at Subhiksha” and were performing similar duties at the company. Wednesday, December 13, 2006
Source: The Economic Times
Unique formats
1. Sachets likely to decrease in popularity
The rise of modern retail could likely cause the death of sachet marketing in urban areas. These small packs that were runaway successes in the 1990s are not finding any shelf space in modern retail stores who prefer larger packet sizes and offer bulk discounts. Many organized retailers, including some neighborhood chains, avoid stocking these items due to a bad visual display and high shrinkage rates.
At one time, sachets were the success story for many a FMCG company, enticing the bottom of the pyramid market but now don’t have many takers. CK Ranganathan, Founder of Cavinkare, who pioneered the sachet revolution, says that the sachet needs to be reinvented for the organized retail market. He added that Cavinkare is “…working on a packaging to offer a carton of sachets, with an MRP, which will be easy for the retailers to stock and bill. I don’t think the sachet trend would die out." Wednesday, December 13, 2006
Source: The Economic Times
Real Estate
1. The tie between retailers and real estate developers
At “Estate South 2006”, a real estate seminar organized by the Confederation of Indian Industry (CII), BS Nagesh, Managing Director of Shoppers’ Stop emphasized the importance of a good connection between retailers and real estate developers for the success of the Indian retail industry. He added that, "Positioning a construction as `retail' cannot be done after the planning and design stage." Importance was placed on planning issues such as availability of tenants, car parking, common retail area and access to stocking areas. Sunday, December 10, 2006
Source: The Hindu Business Line
2. Metro Cash & Carry, RIL engage ICICI Bank to identify retail properties
Metro Cash & Carry and Reliance Retail have engaged ICICI Bank to identify retail properties for their India expansion plans. Both companies are planning an aggressive expansion campaign and will use the Bank’s expertise in finding locations across the country. Metro Cash & Carry plans to expand in Tamil Nadu, Andhra Pradesh, West Bengal, Delhi and Mumbai in 2007, Reliance Retail plans to have 10-11 stores in all major Indian cities by end 2007.
According to sources, Metro Cash & Carry is finalizing a property in Bhandup, a suburb of Mumbai through ICICI Bank and is also looking for additional locations in the city. ICICI Bank started offering this specialized service only one year ago. Friday, December 15, 2006
Source: Business Standard
Sector specific
Apparel & Footwear
1. Louis Philippe, Van Heusen to expand in metro cities
Bangalore based Madura Garments, which handles the Louis Philippe and Van Heusen brands, announced that it will be expanding its network of stores in high streets and malls and that the company will be crossing 100 stores in the next 18 months. New stores will be opened in Delhi, Bangalore, Mumbai, Chennai, Kolkata and in other smaller but emerging metros. Currently, there are 22 exclusive Louis Philippe stores and 25 exclusive Van Heusen stores in the metros. Wednesday, December 13, 2006
Source: Business Standard
2. Maxwell to set up exclusive lingerie chain
Mumbai based Maxwell Industries Ltd; a division of the VIP Group announced that it will be setting up a chain of 100-125 exclusive stores for its Lovable lingerie brand as well as other stores for its lingerie as well as garments. Maxwell had purchased the Lovable brand from US company Sara Lee in 2005. Friday, December 15, 2006
Source: The Hindu Business Line
Home Furnishings
1. Home Solutions expects turnover of Rs. 10 billion from consumer durables
The home furnishings division of the Future Group, Home Solutions Retail (India) Ltd, expects a sales turnover of Rs. 10 billion from its electronic and consumer durables section by the year 2008 financial year. At the opening of an E-Zone and Connection i store in Hyderabad, its sixth store in the country, Manoj Kumar, Head of consumer durables and electronics for Home Solutions Retail, said that the company would be opening 15 more E-Zones in the next two-three months and then increase the number to 25-30 stores by June 2007. Tuesday, December 12, 2006
Source: Business Standard
Bookstores
1. Barnes & Noble looks to India
The world’s largest bookseller is keen on opening shop in India and is looking to find a suitable joint venture partner. Some suggest that it might be The Future Group that the book giant will be tying up with although Kishore Biyani, MD of the Future Group categorically denies any such thing. Wednesday, December 13, 2006
Source: DNA Money
Consumer Durables
1. Be ready to buy small appliances at grocery stores
Several organized retailers are stocking and aggressively pushing small appliances in an effort to increase average ticket size and raise profit margins. Items such as toasters, mixers, grinders, sandwich makers and frying pans are being stocked at stores to ensure higher footfalls. At present, retailers are stocking branded products although most have plans to have their own in-house labels soon.
According to Upamanyu Bhattacharya, chief executive officer of Trumart, a Piramyd venture, “As a category they may be small now, but they push the value up. Anything which has value and meets the daily needs of consumers is considered.” Spencer’s Daily president, Jitu Mehta adds, “As a category, small appliances are growing over 60 % year-on-year. So it is an opportunity which cannot be missed.” Friday, December 15, 2006
Source: The Economic Times
2. Consumer durable industry undergoing change
With the attention from high profile retailers such as Tata’s in the consumer durable industry, smaller retailers in the industry are also setting their sights on expanding their retail spaces and offering improved products in a newer shopping environment. One such retailer is Mumbai based retailer, Sumaria Appliances which is now looking to Pune and Nashik for opening stores. Other retailers such as Digital Shoppy and Vijay Sales are also thinking on similar lines, and are keen to use their local market knowledge to the fullest. Saturday, December 16, 2006
Source: Business Standard
Food & Grocery
1. Pantaloon to open 75 Food Bazaar outlets by end 2007
Pantaloon announced that it will be increasing its food stores, Food Bazaar from 60 to 135 by end 2007. According to Damodar Mall, president and chief executive officer (food business division) for Pantaloon Retail, “Besides metros, people in tier-II cities and towns are also ready for the modern food retailing formats and we are, therefore, gearing up to open 75 more Food Bazaars across the country by the end of next year. Our cut-in stores will continue to be a part of Big Bazaars and Centrals, and we intend to set up stand-alone stores in smaller cities like Visakhapatnam and Mangalore."
Currently, there are already two cut-in stores in Hyderabad, at the Central Mall and at Big Bazaar and the company will be opening four more Food Bazaar’s in the city within the next two months. Pantaloon hopes to reach a turnover of Rs. 40 billion from all formats in the 2006 financial year, of which Food Bazaar accounts for a third of its revenues. Monday, December 11, 2006
Source: Business Standard
2. Subhiksha plans on having 1000 stores by 2007
Chennai based food retail chain Subhiksha announced that it will be investing Rs. 5 billion to increase its network of stores to 1000 by the year 2007. According to R Subramaniam, MD Subhiksha Trading Services, "We are targeting a 1,000-strong retail network by end-2007. We are looking at providing customers across the country with a viable smart shopping option." The company aims at achieving its target turnover of Rs. 35 billion by then.
Subhiksha is also making its foray into the state of Maharashtra, where it plans to open 180 stores in Pune, Kolhapur, Sholapur, Sangli, Nashik, Aurangabad, Nagpur and Mumbai. An estimated 100 stores would be located in Mumbai. At present, Subhiksha has 450 stores in five states and over 1 million sq ft of space. To raise money for the expansion, Subhiksha plans to go for an IPO in the second half of 2007. Tuesday, December 12, 2006
Source: The Economic Times, Business Standard, The Hindu Business Line
3. Reliance Fresh opens 6 more stores in Andhra
Reliance Retail open 6 new stores in Andhra Pradesh, increasing the total to 17 in Hyderabad. According to sources, the stores have been averaging daily sales of Rs. 150,000-160,000 from around 800-1,200 footfalls each day. The company has plans to reach 40 stores in Hyderabad in the near future. Tuesday, December 12, 2006
Source: The Hindu Business Line
4. Spencers’ to open 15 outlets this month
RPG group owned Spencers’ food retail stores will soon have 15 new stores in 10 cities by the end of December 2007. All new stores will be Spencers’ Dailies. The company currently has 88 outlets in the country and is expanding rapidly to position itself as the largest supermarket brand in the country. There are 74 Spencers’ Dailies at present, 3 supermarkets, 7 hypermarkets 3 Express and 2 Fresh. The company has plans to open more of its other formats, hypermarkets and Spencers’ Supers next year. Wednesday, December 13, 2006
Source: Business Standard
5. Spencers’ opt for a cluster model of expansion
RPG Group will be following a cluster method for expanding its food retail chain, Spencers’, which they feel is best suited for achieving economies of scale in sourcing, logistics and promotional activities. At present, Spencers’ has 5 retail formats, each with its own merchandise mix:
Spencers’ Hyper, ranging from 30,000-75,000 sq ft
Spencers’ Super, ranging from 10,000-18,000 sq ft
Spencers’ Daily, ranging from 2,500-5,000 sq ft
Spencers’ Express, ranging from 1,000-1,500 sq ft
Spencers’ Fresh, ranging from 1,200-2,000 sq ft.
In its new approach, each cluster has have 2-3 Hypers, 3-5 Supers, 10-15 Dailies, 30-40 Express and 5-10 Fresh stores. Besides these, the company is also looking for specialized category stores such as for apparel and B2B under the Spencer brand. Thursday, December 14, 2006
Source: The Economic Times
6. Dabur explores entering consumer retail business
Dabur India is considering entering the consumer retail business in the areas of health and wellness. According to Sunil Duggal, chief executive officer of Dabur, “Retail is an opportunity that requires to be studied. We are looking at various options, but have not finalised any plans. But we are sure that we will not be a mainstream retail player, meaning we wouldn’t be in food and grocery retailing.”
He added that, “If we decide to enter the retail business, it will be in the front-end. Our plans will be focused and specialised with health and wellness being the obvious option at the moment. We could make a foray through Dabur India or through a separate company.” Thursday, December 14, 2006
Source: The Economic Times
7. Café Coffee Day opens in Pakistan
India’s largest coffee chain launched its Pakistani operations with its first store in Karachi, where it has joined with a local franchise partner to set up shop. The company plans to open stores in four other locations in Karachi and also in Islamabad and Lahore in 2007. Thursday, December 14, 2006
Source: The Hindu Business Line
8. Reliance Retail opens in Jaipur
Jaipur become the second city to have Reliance Fresh stores. The new stores will be opened in Khatipura, Vijaypath-Mansarovar, Shastri Nagar, Ram Gunj Chopar and Jawahar Nagar covering 2,000-3,500 sq ft each. This is the company’s first launch in north India. Raghu Pillai, president and chief executive of operations, said that the company planned to open in 70 cities in the next three years. Friday, December 15, 2006
Source: Business Standard
9. Metro and Keventer team up for West Bengal
Germany’s Metro Cash & Carry has teamed up with Keventer group, which has set up Keventer Fresh Ltd, to enter the state of West Bengal. The Keventer group is a major company in the eastern area in the food processing industry. MK Jalan, chairman of the Keventer group said that his company would provide back end support to Metro.
Metro Cash & Carry India managing director, Harsh Bahadur, conformed that the two companies had tied up, saying that Keventer “would run a platform for Metro in West Bengal”. At present, Metro has 2 cash and carry hubs in Bangalore and had short listed 6-7 cities such as Hyderabad, Delhi, Mumbai, Chennai, Pune, Ludhiana and Chandigarh for its first phase of expansion. Friday, December 15, 2006
Source: Business Standard
10. Dabur getting deeper into fast food
Dabur Foods has signed a franchise agreement with Hot Brands International to set up quick service restaurants in Delhi and the NCR area. Incidentally, this is not the company’s first fast food venture, as it is one of the franchisees of US chain Subway. The new venture will be under a new company called Consortium Consumer Care, and will have three formats of restaurants, Shamiana for Indian food, Magic Wok for Chinese food and Santino for Italian food. There will be 6 restaurants opening in 2007, for which the company will be investing Rs. 300,000 each. Saturday, December 16, 2006
Source: The Economic Times
Jewellery & Watches
1. Rajesh Exports sets up new company for retail and real estate development
Rajesh Exports Ltd announced that it would be setting up two new subsidiaries for its retail and real estate development ventures. Its new retail venture, 24K Retail Ltd would cover its three brands, Laabh Jewelers, Shubh Jewelers and Oyzterbay. According to the company statement, Laabh will have 30 stores, Shubh will have 100 stores and Oyzterbay will have 50 stores. Monday, December 11, 2006
Source: The Economic Times, Reuters
Luxury and Lifestyle
1. Bose Corp to double its stores
Bose Corporation said that it would be doubling its exclusive stores within the next 18 months. At present, there are 12 stores located in the metros. The company is now interested in opening stores in some tier II cities too. Thursday, December 14, 2006
Source: The Hindu Business Line
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