The Latest News, Views and Events from the Indian
Retail Sector

Weekly Retail News from India

General Plans and Information
Big players - plans and investments
International
Unique formats
Sector specific

General Plans and Information

1. US Commerce Secretary: ‘Opening consumer sector will be a boon for farmers’
On his first trip to India, the US Trade Secretary Carlos Guiterrez said that opening the country’s consumer sector would benefit farmers. He added that, “More needs to be done to open India’s markets ... there are some sectors such as retail, banking, financial services and telecommunications where obstacles remain.” He cautioned the government on building walls around its economy and said that the country must fight the temptation to stop foreign companies from coming in.
Wednesday, February 14, 2007
Source: Reuters, Gulf Times

2. Big retail likely to undermine known brands
Industry analyst and president of IMRB International, Thomas Puliyel writes about how the entry of large retail companies will change the way Indian consumer make purchasing decisions. Currently, consumers are opening their wallets like never before, mostly putting purchases on credit cards, but over time it is likely that consumers will become more conscious of the power they have to decide between these stores and medium sized newer entrants.
Thursday, February 15, 2007
Source: The Economic Times

3. Private labels key to profitability
Retail chains are increasingly relying on private labels to catch the gaps in their product mix and targeting specific needs of consumers. Pantaloons, Westside, Ebony and Shoppers’ Stop are all increasing their range of private labels to improve their profit margins as well as increase average bill size. According to Govind Shrikhande, CEO of Shoppers’ Stop, “Today, the offering of private labels is not about price. The private label brands are filling the missing gap in terms of both range and quality. Private labels are more about targeting specific merchandise for youth and mature customers.”

Categories such as women’s luggage, accessories, corporate clothing, gym and yoga wear etc are some of the segments that retailers are targeting. While retailers are still pricing their private labels are a lower level, the emphasis is no longer on saving costs but on developing a specialized portfolio.
Friday, February 16, 2007
Source: The Economic Times

Big players - plans and investments

1. Bharti, Wal-Mart to announce details of tie up in 10 days
The Bharti Group will be announcing its details for its joint venture deal with Wal-Mart in the next 10 days. Several senior executives, including Vice-Chairman Michael T Duke will be in India on February 22 for this purpose, and will be meeting Kamal Nath, India’s Commerce and Industry Minister. Wal-Mart had earlier signed a Memorandum of Understanding with Bharti Enterprises to partner with and set up front end stores as a Wal-Mart franchisee.
Tuesday, February 13, 2007
Source: The Hindu Business Line

2. Wal-Mart to use new formats for Indian operations
Wal-Mart is known for its large format stores all around the world, but for its operations in India, the company is considering going for smaller, neighborhood stores in keeping with consumer preferences, high real estate prices and a severe shortage of available properties. According to Love Goel, Chairman and CEO of Growth Ventures Group, and a former Wal-Mart advisor, "We expect Wal-Mart and Bharti to explore the neighborhood market concept because groceries are one of the largest retail categories with the least organized retail competition in India."
Tuesday, February 13, 2007
Source: Silicon India

International

1. Wal-Mart likely to adopt neighborhood store model
US retailer Wal-Mart is known the world over for its large format hypermarkets and supermarkets, but for its operations in India, the company is considering opening small neighborhood stores in keeping with local customs and consumer preferences. According to Love Goel, Chairman of Growth Ventures Group, a global retail investment firm and a former advisor to Wal-Mart, "We expect Wal-Mart and Bharti to explore the neighbourhood market concept because groceries are one of the largest retail categories with the least organised retail competition in India."
Sunday, February 11, 2007
Source: The Economic Times

2. France’s Auchan keen on opening in India
France’s Auchan, a $50 billion food, grocery and consumer goods retailer, is keen on opening stores in India. The company has reportedly been holding talks with Bombay Dyeing to form a joint venture for its India operations. Bombay Dyeing has reportedly also been holding talks with Carrefour, although no formal plans have come of it as yet.

Due to the stringent laws on retail FDI and political instability, most foreign retailers are looking to partner with reputable business houses that have political clout. Wal-Mart reportedly selected Bharti Group over Reliance Retail for this reason and also why Carrefour’s talks with Dubai based Landmark Group did not materialize.
Monday, February 12, 2007
Source: The Economic Times

3. HAS keen on tying up with Reliance for retail venture in Yemen
The Hayel Saeed Anam Group (HSA) a Yemen based company is keen on tying up with Reliance to set up a retail business. The company already has ties with Reliance in its refinery segment and is keen to extend it to retail. The HSA Group is present in sectors such as manufacturing, real estate, telecom, food products and petrochemicals, accounting for over 60% of the economy in the country.
Thursday, February 15, 2007
Source: The Economic Times

4. Tata and Woolworths might partner for retail
The Tata Group said that they are looking ahead to when FDI rules change in the future. The company has tied up with Woolworths to set up Croma, consumer durable stores. The company is keen to tie up with Woolworths for retail, once the laws change. According to RK Krishna Kumar, Director Tata Sons, "Our relationship with Woolworths is a happy one. They have strong presence in Australia and New Zealand and if we were to consider getting into any such format, we will go with them."
Friday, February 16, 2007
Source: NDTV Profit

Unique formats

1. Dollar store boom in India
Dollar stores are booming in India, with consumers flocking to stores to buy items such as branded food, healthcare products and glassware. Despite their names, these stores sell products for Rs. 99 ($2) but the names have stuck. Most products are bought at wholesale prices abroad and sold at a fixed Rs. 99 in India. Several US based companies such as Dollar General, Dollar King, 99 Cents and Family Dollar are making plans to come to India. According to Shuchranshu Pani, president, retail services or TrammellCrow Meghraj, “India is a price-sensitive market. Customers will be delighted to buy international products for Rs. 99. Hence, master franchisees for retailers abroad are bound to register high sales.”
Monday, February 12, 2007
Source: Financial Express

2. Retailers add finances to their store services
Several retailers are adding financial services to their stores in an effort to reach newer customers. The Future Group will be launching Money Bazaar in the next two months with 400-500 stores initially and have set a target of Rs. 40,000-50,000 for the next five years. Sameer Sain, CEO of Future Capital said it would be “…a Big Bazaar of financial products, with the outlets selling consumer credit including mortgage, insurance and mutual funds.”

The company has not yet decided what format Money Bazaar will take, from either standalone or kiosk form. The company will also be launching an online portal, moneybazaar.com in a year. Besides mainstream lending, the company is also exploring micro financing to reach out to the poorer sections of society.

Mukesh Ambani’s Reliance Retail is also planning to offer automobile and consumer loans to customers, in an effort to be a one-stop shop. Bharti Enterprises is also considering the micro finance segment as a method to support its supply chain for its retail stores. Smaller retailers such as Subhiksha and Spinach are also planning to sell financial products such as housing loans and credit cards.
Wednesday, February 14, 2007
Source: The Economic Times

3. DCM to increase its agri shops
DCM Shriram Consolidated (DSCL) announced that it was planning a massive expansion of its agriculture retailing stores, Hariyali Kisaan Bazaars, adding 250 stores by the end of the year with an investment of Rs. 5 billion. The company currently has 54 outlets in the states of Uttar Pradesh, Uttranchal, Punjab, Haryana and Rajasthan. DCM will now be opening stores in Madhya Pradesh and Andhra Pradesh in the next six months and in Karnataka, Tamil Nadu and Maharashtra after that.
Saturday, February 17, 2007
Source: Business Standard

Sector specific

Apparel & Footwear

1. Nautica opens in Pune
US lifestyle brand Nautica opened its flagship store in Pune. The store covers over 1,650 sq ft of space with categories such as sportswear, outerwear, tailored clothing, eyewear, watches, perfumes, footwear and accessories. This is the company’s fifth store in the country, after Bangalore, Chennai, Chandigarh and Delhi. There will be 12 new stores opening, with two in Mumbai and single stores in Hyderabad, Ahmedabad, New Delhi and Ludhiana.
Thursday, February 15, 2007
Source: The Hindu Business Line

Consumer Durables

1. Consumer durables likely to become the next big sector
After the food and grocery sector, it is the consumer durable sector that is likely to boom in India. According to a study by PricewaterhouseCoopers by N V Sivakumar, Executive Director & Leader of the Retail & Consumer Practice, "The market for consumer durables (including entertainment electronics, communitarian and IT products) is estimated at Rs. 320 billion ($7.1 billion).”

With the market likely to reach Rs. 600 billion (US$ 13.3 billion) by 2008 at a 10-12% growth rate, it is the segment to focus on. Interestingly, it is the rural consumer durable sector that is growing at a faster rate of 25% as compared to the urban consumer durables market, which is growing at 7-10%. The key items are mobile phones, TVs and music systems.
Thursday, February 15, 2007
Source: The Hindu Business Line

2. Tata Croma opens its second store in Mumbai
The Tata and Woolworth tie up Croma, opened its second store in Mumbai in the western suburb of Malad. The new store covers an area of 22,000 sq ft and stocks over 6,000 products with over 180 international and local brands. Croma is one of the new breed of consumer durable focused stores that is fast catching on with consumers who can get all their electronic needs under one roof.
Friday, February 16, 2007
Source: The Economic Times

Food & Grocery

1. Pantaloon to increase number of Big Bazaars
Pantaloon will be increasing the number of Big Bazaar stores to 70 by the end of the year, with the maximum new stores opening in Maharashtra in cities such as Ahmednagar, Aurangabad, Kohlapur and Solapur. At present the company has 44 outlets, with most outlets located in the metros and other larger cities such as Bangalore, Hyderabad, Pune and Ahmedabad. An estimated 66% of its Rs. 9000 billion income comes from these eight markets. Big Bazaar recently opened in Sangli, a small town in Maharashtra and has been surprised at the level of success the store has achieved, encouraging it to invest in smaller markets.
Saturday, February 17, 2007
Source: Business Standard