Latest News and Events from the Indian Retail Sector

Weekly Retail News from India

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

General Plans and Information

1. Local retailers not worried about organized retail
As the number of companies getting into the retail sector increase, local storekeepers could start to feel threatened, but several local stores such as Everfresh Stores in Dadar, Mumbai are not worried. They feel that large stores will not affect their business due the high loyalty of local customers. Storeowner Hardik Lalani says that although they might lose approximately 10% of their business for branded products, other items will not be affected. Yogesh Chheda, owner of Chheda Stores says that the personal touch and specialized service such as home delivery would give them an edge of large retailers.
Sunday, January 28, 2007
Source: The Hindu Business Line

2. Organized retail sector to cross $22 billion by 2010
India’s organized retail sector is expected to cross $22 billion by 2010, a significant increase from its current value of $4 billion. The increase in size of the organized retail sector will also require over 220 million sq ft of space. These results were reported according to industry organization Assocham. The total retail industry in India is worth $16 billion at present, of which the organized retail sector accounts for only 25%.

The organized sector is expected to grow in large part due to the fast pace of growth in small towns, where it is growing at 50-60% as compared to 35% in larger cities. There are close to 600 malls coming up in metros and large cities. Another 1000 malls are being planned for smaller towns where land is available and consumers have access to increasing incomes. The big sellers in small towns are food and grocery items, FMCG, sportswear, eye wear, watches, footwear, tailored clothing and outerwear.
Friday, February 02, 2007
Source: The Economic Times

3. Retailers keen on private labels in beauty products
Retailers such as Pantaloon, Reliance and Bharti-Wal-Mart will soon be launching their own private labels for beauty products. The companies are in talks with VLCC, a fitness, health and beauty products company to manufacture private label beauty products.

Pantaloon Retail are already in the health and beauty business, with a service format of beauty salons, called Star and Sitara and have also started retailing beauty products through its new outlet called Turmeric. The company is waiting VLCC to take care of manufacturing its private labels for them.
Friday, February 02, 2007
Source: The Hindu Business Line

Big players - plans and investments

1. Reliance to focus on niche retail formats
Reliance Retail is looking to create niche retail formats along with its existing formats. According to Raghu Pillai, President and CEO (Operations and Strategy), "We are looking at opening 250 Reliance Fresh outlets by February or March in cities like Pune, Bangalore, Hyderabad and Mumbai, and in some cities in Gujarat. We will also start opening our standalone niche retailing stores that would include formats like consumer durables and apparels, amongst others. The hypermarket outlets will also come up in the same time span."

The company will also be staring a home delivery service at its Fresh outlets for customer within a range of up to 3 kms. Reliance Retail now has 3 Ranger Farm outlets, its B2B format store, in Hyderabad and Jaipur. The company is also creating its own private label and is currently conducting testing on products.
Monday, January 29, 2007
Source: The Hindu Business Line

2. Reliance, Bharti might get into micro finance sector
Reliance Retail and Bharti are looking at the micro finance sector as a way to establish links in their rural supply chains. Sources report that Reliance Retail will be seeking approval from the RBI to set up an NBFC arm to operate a micro finance institution (MFI). It would either form partnerships with existing MFIs as part of its plan to create rural and semi-urban markets.
Tuesday, January 30, 2007
Source: The Economic Times

3. Reliance Retail opens 9 stores in NCR; plans additional 100 stores
Reliance Fresh opened nine stores in the National Capital Region (NCR) taking the total number of stores to 50. Now the company will be opening 100 additional stores in the NCR in the next 4 months. Fifty of these stores will be in Delhi and the remaining will be in surrounding areas of Noida, Greater Noida, Faridabad, Ghaziabad and Gurgaon.

Reliance aims to have 1,000 Reliance Fresh stores by the end of the year in 35 cities, covering a total space of 4 million sq ft. According to Raghu Pillai, President and CEO of Reliance Retail (operations and strategy), “It will be very hectic for us till March. We are planning to open 250 Reliance Fresh stores in Punjab, Delhi, Karnataka (Bangalore), Kerala, Gujarat, and Maharashtra (Pune and Mumbai).”

Between April and June, the company will also launch its hypermarket and specialty store formats. Specialty stores will include consumer electronics, apparel, pharmaceuticals and healthcare items. The first hypermarket is likely to come up in either Delhi or Ahmedabad.
Tuesday, January 30, 2007
Source: Business Standard

4. Big Bazaar will be launching private labels
The Future Group’s value retail chain, Big Bazaar will soon be launching several private label products in all its stores. Interestingly, where most private labels are quite basic in packaging and design, Big Bazaar will be focusing on product design for all its private labels. The company will also be opening its home improvement store, Hometown in the next two months.
Friday, February 02, 2007
Source: The Hindu Business Line

International

1. Wal-Mart considering leasing store space
US based retailer Wal-Mart is reportedly considering several models of acquiring space for its stores, including a rental model due to the high prices and lack of availability of retail space. The company is also in talks with several real estate developers to sign up space as anchor tenants in malls, whereas Wal-Mart’s stores usually are standalone stores.

Bharti-Wal-Mart have begun acquiring real estate and has already got close to 150,000 sq ft in cities such as Delhi, Noida, Gurgaon, Hyderabad, Bangalore, Ahmedabad and Chandigarh. The company will be operating on two strategies, one for small cities where they would own hypermarkets and one for large cities where they would go for long lease due to shortage of retail space.
Monday, January 29, 2007
Source: The Economic Times

2. Triumph looks for partners to open flagship stores
Intimate apparel brand Triumph International (India) Pvt. Ltd, is looking for a franchise partner through which it could set up flagship stores. According to Thorsten Allenstein, General Manager and Country Head (India), “For flagship stores we will go through a franchise agreement. We are in talks with a few companies but we are yet to find a partner with the right mindset.”
Monday, January 29, 2007
Source: The Economic Times

3. Carrefour close to coming to India
French retailer Carrefour is likely to sign a deal with an Indian company to start operations in the country, according to India’s commerce and industry minister, Kamal Nath. He added that the company was in talks with the Wadias of Bombay Dyeing, one of the top business families of the country. Neither Carrefour nor Wadia Groups spokesperson was available for comment.

The competition to enter India’s booming retail market is hotting up, with Wal-Mart recently tying up with Bharti Enterprises. Other retailers such as Tesco and Metro are also pushing to enter its retailing front. Metro has been operating in India via its cash-and-carry wholesale stores.

There are reports that Carrefour is also holding talks with other Indian companies and not just the Wadias. According to Ajay Dua, Secretary in the department of Industrial Policy and Promotion, "The information we have got is that they are talking to various companies to look for a partner but they are yet to finalise its name."
Thursday, February 01, 2007
Source: Reuters, The Economic Times

4. Kingfisher looks to enter India’s retail market
UK’s home improvement retailer Kingfisher is looking to join India’s retail sector with an initial investment of $250 million. According to reports, a team from Kingfisher is in India looking for partners as well as locations for its stores. The Indian government had recently announced that it would consider allowing FDI in specialty retail, which is where Kingfisher would fit in, as they sell appliances, tools, hardware, garden supplies and DIY (do-it-yourself) products.
Thursday, February 01, 2007
Source: The Economic Times

5. ADAG in talks with Carrefour, Tesco
The Anil Dhirubhai Ambani Group (ADAG) is reportedly holding talks with three major global retailers in an effort to form a partnership. The three companies are Tesco and Carrefour, which are both food and grocery retailers and Radio Shack, which is a consumer electronics, focusing on mobile equipment and accessories, which will tie in nicely with ADAG’s current chain of Reliance shops (formerly known as Webworlds).
Thursday, February 01, 2007
Source: The Economic Times

6. Could Carrefour be the peace broker between Wadias and Danone?
The Wadias are reportedly in talks with French retailer Carrefour to set up operations in India. According to reports, the talks with Carrefour are leading to Wadias thawing their strained relationship with Groupe Danone, a partner in their Britannia division.
Friday, February 02, 2007
Source: The Economic Times

7. Tesco in talks with Tatas and Landmark Group
UK based retail firm Tesco is reportedly interested in tying up with an Indian company to start operations in the country. Tesco’s global chief, Sir Terry Leahy will be coming to India later this month, and according to market buzz, he will be meeting with Tatas and the Landmark Group. Tesco’s rival companies are either in the country or will soon be in the market; Wal-Mart has recently tied up with Bharti Enterprises and Carrefour is on the verge of tying up according to media reports.
Saturday, February 03, 2007
Source: The Economic Times

HR News

1. Shoppers’ Stop ties up with business schools to train and retain staff
Shopper’s Stop will be tying up with business schools such as Symbiosis and Manipal Institute, so that its ground level staff can earn professional degrees. According to Govind Shrikhande, CEO, Shoppers’ Stop, "All this time we have had upgradation programmes, but now we intend offering them on a bigger scale. There is a proposal to even offer two-year MBA programmes and we are talking to universities and B-schools such as Symbiosis and Manipal to structure the course and the financing options.''

The company has been doing salary corrections in an effort to retain its staff, with most salaries increasing by 20-35%. As part of the retention plan, the company will be offering career development options to its employees. The company will be investing between Rs. 60,000-80,000 for a graduation program of three years and Rs. 150,000-170,000 for an MBA degree.
Thursday, February 01, 2007
Source: The Hindu Business Line

Unique formats

1. Rural malls are taking off
The concept of rural malls is picking up and retailers are all rushing to set up stores in rural areas. Consumers in rural areas spend an estimated Rs. 8000 billion each year. In some areas, there is no electricity or drinking water, but villagers are tracking commodity indexes via the ATM. Companies such as DCM Shriram Group are setting up 50 rural retail outlets called Hariyali Kissan Bazaars seeing this vibrant demand.

ITC has set up 12 Choupal Sagars in three states and Reliance is also making plans to enter the sector. Hariyali Kissan Bazaar’s have 400 walk-ins a day, with a 70-80% repeat visitors and generate Rs. 140 million annually. While most products are farm related, soon stores will add construction items, automotive and telecom products due to demand from local customers.
Thursday, February 01, 2007
Source: CNN-IBN

Sector specific:

Apparel & Footwear

1. Kewal Kiran to open lifestyle chain store
Kewal Kiran Clothing (KKC) announced that it will be setting up four department stores by 2008 end, the first of which will be located in a suburb of Mumbai, in Kandivili. Each store will require an investment of Rs. 50-60 million. KKC manufactures the brands Killer, Lawman, Easies and Integriti, and the new stores will keep these brands and other newer private label brands that are yet to be launched.
Wednesday, January 31, 2007
Source: Business Standard

Home Furnishings

1. Future Group to open home solutions store
The Future Group announced that they were going to open stores focusing on home improvement and home solutions. A total of nine stores will be opened initially with an investment of Rs. 2 billion in the next 6 months. The new stores, called Hometown will be one-stop shops for all home-related products and services, such as plumbing, masonry and painting.

The company was interested in tying up with real estate development companies such as Ansals, Unitech and Salarpuria to set up kitchens and bathrooms for homeowners. Financial services will also be offered at Hometown stores. The first of Hometowns will be opening in Noida in the next two months.
Thursday, February 01, 2007
Source: Business Standard

Food & Grocery

1. ‘Fresh’ name is no longer fresh
With several retailers adding the word ‘Fresh’ in their brand names, the word is no longer unique in the food and grocery sector. Reliance Fresh was the most high profile brand that seems to have spawned a chain reaction. Besides the word ‘fresh’, several retailers are even using the red and green colors that Reliance Fresh uses. Is it just a coincidence or rival companies trying to make use of subliminal ways to attract customers?

ITC has Choupal Fresh and Heritage Foods has Fresh@, with the location name of the location added at the end. Subhiksha doesn’t have the word ‘fresh’ in its brand but does use the same shade of red and green in its signs and logos.
Wednesday, January 31, 2007
Source: The Economic Times