Going by Census 2001, nearly 3 crores of people work in wholesale and retail trade in the country – 1.1 crores in the urban and 1.9 crores in the rural areas. Any protest by this sector “will cause companies such as Reliance, Pantaloon, Spencer, Bharti and now the Birlas to stand up and listen.
Organised retail has not penetrated and will not penetrate rural India for obvious reasons – it is just unviable. It is only the urban areas that organised retail is slowly but not steadily growing in.
Those belonging to the upper middle income group and higher income group and living in cities have been increasingly patronising organised trade thanks to the latter’s proliferation. That way speaking, they have traditionally stayed away from the mom-and-pop stores as far as possible.
Who patronises the outlets of organised retail in urban India? Definitely not the lower stratum of society; this stratum represents people who are either daily-wagers or who work for the unorganised trade and industry; their employment is seasonal which means they may remain jobless during the off-season. At sunset, they receive their wages with which they buy their rice or atta for the austere supper ahead. Their purchases are meagre and only the mom-and-pop stores will entertain them. Organised retail will not vend 50 ml of edible oil or 250 gm of rice or atta to such humble consumers.
Those belonging to the lower end of the middle – income group are generally employees of State / Central governments and the organised private sector.
They buy from the mom-and-pop stores on credit during the month and settle the bill when they receive their salaries in the first week of the succeeding month. At best, the lower end of the middle-income group may patronise organised retail for purchase of vegetables because the vegetable vendor does not provide credit anyway.
The truth therefore is that unorganised trade has not been affected to the extent it is made out. The statement of Mr Praveen Khandelwal, General Secretary, Confederation of All India Traders that “united we stand, divided we fall” is at best a diversionary tactic. Instead he had better prevail on his fellow-members to equip themselves better to take the competition head-on by being transparent in their dealings, by being quality-conscious and by being price-conscious, amongst other things.
Retailing Report- India
India is one of the most attractive destinations for retailers from all across the globe. Thanks to the entry of corporate, changing consumer behavior & lifestyle, increasing influence of western culture and rising income, the Indian retail industry has seen phenomenal growth in the last five years (2001-2006) and organized retailing has finally emerged from the shadows of unorganized retailing and is contributing significantly to the growth of the overall retail sector, according to ""Booming Retail Sector in India”, a new market research report by RNCOS. The research report helps the client to analyze the opportunities and factors that will make the Indian retail industry a success.
Key Findings
Organized retail market in India is expected to reach US$ 50 Billion mark by 2011.
Number of shopping malls is expected to increase at a CAGR of more than 18.9% from 2007 to 2015.
Rural market is projected to dominate the retail industry landscape in India by 2012 with total market share of above 50%.
Organized retailing of mobile handset and accessories is expected to reach close to Rs. 5000 Crore by 2010.
Driven by the expanding retail market, third party logistic market is forecasted to reach US$ 20 Billion by 2011.
Apparel, along with food and grocery, will lead the organized retailing in India.
Demand for readymade garments in rural India is expected to increase at a CAGR of 16.5% during 2008-2010.
Women apparel market (in value terms) is anticipated to grow at a CAGR of 17.79% till 2010. The organized apparel retailing in India is projected to surge at a CAGR of 30% from 2008 to reach Rs. 52,289 Crore in 2010.
Increasing at a CAGR of 25%, branded apparel industry for women is expected to hit Rs. 18,351 Crore by 2010.
The organized lingerie retail market in India is expected to touch Rs 4000 Crore mark by 2009.
IT revenue from the retail segment is forecasted to grow at a CAGR of 43.41% by 2010.
Retail space under operations [in million sqft at the end of March-2008]:
* Pantaloon Retail - 8.9
* Vishal - 2.2
* Shoppers Stop - 1.6
* Spencers - 1.2
* Trent - 1.1
Retail Sales for FY 2008 [in Rs million]:
* Pantaloon Retail - 55,218
* Vishal - 10,053
* Shoppers Stop - 11,901
* Spencers - 8,061
* Trent - 7,162
Retail Gross Margins [in %ge]:
* Pantaloon Retail - 33.7
* Vishal - 44.1
* Shoppers Stop - 36.7
* Spencers - 14.4 [Lowest in the Industry]
* Trent - 42
Retail Real Estate Expense as Percentage of FY08 Sales:
* Pantaloon Retail - 7.2
* Vishal - 6.0
* Shoppers Stop - 8.6
* Spencers - 8.8
* Trent - 3.5
Retail Space Addition in FY 2008 [%ge growth YoY]:
* Pantaloon Retail - 67.5
* Vishal - 68.6
* Shoppers Stop - 36.9
* Spencers - 133.8
* Trent - 27.3
Retail Revenue in INR / sft in FY 2008:
* Pantaloon Retail - 7,788
* Vishal - 5,838
* Shoppers Stop - 8,585
* Spencers - 9,113
* Trent - 7,575
Key Findings
Organized retail market in India is expected to reach US$ 50 Billion mark by 2011.
Number of shopping malls is expected to increase at a CAGR of more than 18.9% from 2007 to 2015.
Rural market is projected to dominate the retail industry landscape in India by 2012 with total market share of above 50%.
Organized retailing of mobile handset and accessories is expected to reach close to Rs. 5000 Crore by 2010.
Driven by the expanding retail market, third party logistic market is forecasted to reach US$ 20 Billion by 2011.
Apparel, along with food and grocery, will lead the organized retailing in India.
Demand for readymade garments in rural India is expected to increase at a CAGR of 16.5% during 2008-2010.
Women apparel market (in value terms) is anticipated to grow at a CAGR of 17.79% till 2010. The organized apparel retailing in India is projected to surge at a CAGR of 30% from 2008 to reach Rs. 52,289 Crore in 2010.
Increasing at a CAGR of 25%, branded apparel industry for women is expected to hit Rs. 18,351 Crore by 2010.
The organized lingerie retail market in India is expected to touch Rs 4000 Crore mark by 2009.
IT revenue from the retail segment is forecasted to grow at a CAGR of 43.41% by 2010.
Retail space under operations [in million sqft at the end of March-2008]:
* Pantaloon Retail - 8.9
* Vishal - 2.2
* Shoppers Stop - 1.6
* Spencers - 1.2
* Trent - 1.1
Retail Sales for FY 2008 [in Rs million]:
* Pantaloon Retail - 55,218
* Vishal - 10,053
* Shoppers Stop - 11,901
* Spencers - 8,061
* Trent - 7,162
Retail Gross Margins [in %ge]:
* Pantaloon Retail - 33.7
* Vishal - 44.1
* Shoppers Stop - 36.7
* Spencers - 14.4 [Lowest in the Industry]
* Trent - 42
Retail Real Estate Expense as Percentage of FY08 Sales:
* Pantaloon Retail - 7.2
* Vishal - 6.0
* Shoppers Stop - 8.6
* Spencers - 8.8
* Trent - 3.5
Retail Space Addition in FY 2008 [%ge growth YoY]:
* Pantaloon Retail - 67.5
* Vishal - 68.6
* Shoppers Stop - 36.9
* Spencers - 133.8
* Trent - 27.3
Retail Revenue in INR / sft in FY 2008:
* Pantaloon Retail - 7,788
* Vishal - 5,838
* Shoppers Stop - 8,585
* Spencers - 9,113
* Trent - 7,575
Smart Vs Big companies- Power to sell.
Westpac set to sell fast food shops as retail downturn bites
Thursday, 7 August 2008
Westpac Banking Corporation is likely to sell off 64 Australian fast food properties worth about $100 million because of tougher refinancing and retail conditions.
The bank has called meetings of two of its unlisted property trusts, which owns properties occupied by Hungry Jack's, KFC, Red Rooster Family Restaurants and others.
Westpac has warned that the trusts – the Westpac Family Restaurants Trust and the Westpac Family Restaurants Property Trust No.2 – will "face difficulties" if the restaurants are not sold. It cited increased refinancing costs and lower capital growth in future years, made possible by a softening retail property market.
Lessees of the properties have the first right of refusal to acquire the properties in the trust.
The first trust owns 36 Hungry Jack's and KFC stores, which it bought in 2002. The second trust's 28 properties comprise 19 Red Rooster restaurants, nine Chicken Treats, three Domino's Family Restaurants, one Subway Family Restaurant and one delicatessen.
Thursday, 7 August 2008
Westpac Banking Corporation is likely to sell off 64 Australian fast food properties worth about $100 million because of tougher refinancing and retail conditions.
The bank has called meetings of two of its unlisted property trusts, which owns properties occupied by Hungry Jack's, KFC, Red Rooster Family Restaurants and others.
Westpac has warned that the trusts – the Westpac Family Restaurants Trust and the Westpac Family Restaurants Property Trust No.2 – will "face difficulties" if the restaurants are not sold. It cited increased refinancing costs and lower capital growth in future years, made possible by a softening retail property market.
Lessees of the properties have the first right of refusal to acquire the properties in the trust.
The first trust owns 36 Hungry Jack's and KFC stores, which it bought in 2002. The second trust's 28 properties comprise 19 Red Rooster restaurants, nine Chicken Treats, three Domino's Family Restaurants, one Subway Family Restaurant and one delicatessen.
The News Capsule- India Vs Brain Drain
India's vast middle class with its expanding purchasing power and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets.
The world's largest retailer, Wal-Mart, has tied-up with Sunil Mittal's Bharti Enterprises to enter Indian retail market.
Microsoft's first shop-in-shop pilot has been launched with the Tata Group subsidiary Infiniti Retail's multi-brand consumer durables retail format, Croma.
The Walt Disney Company, consumer product retailing arm of global animation giant, will soon add 135 new stores to its existing 15 stores.
World's leading coffee chain, Starbucks' enters India through a tie-up with the country's leading multiplex operator PVR Limited.
Apple Inc has entered into an exclusive marketing and distribution deal with Reliance Retail through "iStore by Reliance Digital".
The UK-based international coffee chain, Costa Coffee, plans to double the number of retail outlets by the end of 2008.
British retailer Marks & Spencer's has tied with Reliance Retail and plans to open at least 50 new stores in India over the next five years, with an initial investment of up to US$ 58 million.
UK's largest home textile retail chain, Rosebys, which was acquired by Gujarat Heavy Chemicals in 2006, is set to foray into the domestic market this year with a slew of stores.
German sportswear and Apparel Company, Adidas is going in for a major expansion across India, and plans to have a total of about 450 franchisee outlets in the country.
The world's largest retailer, Wal-Mart, has tied-up with Sunil Mittal's Bharti Enterprises to enter Indian retail market.
Microsoft's first shop-in-shop pilot has been launched with the Tata Group subsidiary Infiniti Retail's multi-brand consumer durables retail format, Croma.
The Walt Disney Company, consumer product retailing arm of global animation giant, will soon add 135 new stores to its existing 15 stores.
World's leading coffee chain, Starbucks' enters India through a tie-up with the country's leading multiplex operator PVR Limited.
Apple Inc has entered into an exclusive marketing and distribution deal with Reliance Retail through "iStore by Reliance Digital".
The UK-based international coffee chain, Costa Coffee, plans to double the number of retail outlets by the end of 2008.
British retailer Marks & Spencer's has tied with Reliance Retail and plans to open at least 50 new stores in India over the next five years, with an initial investment of up to US$ 58 million.
UK's largest home textile retail chain, Rosebys, which was acquired by Gujarat Heavy Chemicals in 2006, is set to foray into the domestic market this year with a slew of stores.
German sportswear and Apparel Company, Adidas is going in for a major expansion across India, and plans to have a total of about 450 franchisee outlets in the country.
Discount Malls and E-tailing
Sell more..."Discount is the word"
Even as the organized retail market is starting to take off, there has been a concomitant surge in branded discount outlets in India. Top realtors and local retail chains are developing malls in regional boroughs, specifically to sell premium branded goods. At least 50 such malls are to come up in the next two years across the country positioned in the middle-to-the-premium end of the market.
For example, Royal Palms is developing Orchard Road Mall in the western suburbs of Mumbai. Similarly, Akruti Nirman, which is planning to brand its discount malls in Kanjurmag, Ghatkopar, Mumbai and Thane as 'Cityworld', has decided to develop similar malls in Tier II and Tier III cities. Some of the other prominent discount retailers include Pantaloon Retail (India) Ltd's Brand Factory, Arvind Mills Ltd's Megamart andand Provogue (India) Ltd's Promart among others
E-retailing in India
The increase in the PC and internet penetration along with the growing preference of Indian consumers to shop online has given a tremendous boost to e-tailing-the online version of retail shopping. An estimated 10 per cent of the total e-commerce market is accounted by e-tailing.
With today's, net-savvy Indians making online purchases like never before, both the number and variety of products sold online has grown exponentially. According to the Indian Marketing Research Bureau (IMRB) and Internet and Mobile Association of India (IAMAI), the e-tail market is estimated to grow by 30 per cent to US$ 273.02 million in 2007-08, from US$ 210.01 million in 2006-07.
In fact, there has been a continuous rise in the number of people accessing the internet. According to online research and advisory firm JuxtConsult's 'India Online 2008', there are over 49 million internet users in India. Significantly, internet penetration (as a percentage of population) has grown to 12 per cent, up 3 per cent from last year's 9 per cent.
Reforming Retail
The Government allows 100 per cent foreign direct investment (FDI) in cash and carry through the automatic route and 51 per cent in single brand. Besides, the franchise route is available for big operators. To further attract global retailers, the economic survey 2007-08 has suggested a share for foreign equity in all retail trade and 100 per cent in respect of luxury brands and other specialised retail chains.
Even as the organized retail market is starting to take off, there has been a concomitant surge in branded discount outlets in India. Top realtors and local retail chains are developing malls in regional boroughs, specifically to sell premium branded goods. At least 50 such malls are to come up in the next two years across the country positioned in the middle-to-the-premium end of the market.
For example, Royal Palms is developing Orchard Road Mall in the western suburbs of Mumbai. Similarly, Akruti Nirman, which is planning to brand its discount malls in Kanjurmag, Ghatkopar, Mumbai and Thane as 'Cityworld', has decided to develop similar malls in Tier II and Tier III cities. Some of the other prominent discount retailers include Pantaloon Retail (India) Ltd's Brand Factory, Arvind Mills Ltd's Megamart andand Provogue (India) Ltd's Promart among others
E-retailing in India
The increase in the PC and internet penetration along with the growing preference of Indian consumers to shop online has given a tremendous boost to e-tailing-the online version of retail shopping. An estimated 10 per cent of the total e-commerce market is accounted by e-tailing.
With today's, net-savvy Indians making online purchases like never before, both the number and variety of products sold online has grown exponentially. According to the Indian Marketing Research Bureau (IMRB) and Internet and Mobile Association of India (IAMAI), the e-tail market is estimated to grow by 30 per cent to US$ 273.02 million in 2007-08, from US$ 210.01 million in 2006-07.
In fact, there has been a continuous rise in the number of people accessing the internet. According to online research and advisory firm JuxtConsult's 'India Online 2008', there are over 49 million internet users in India. Significantly, internet penetration (as a percentage of population) has grown to 12 per cent, up 3 per cent from last year's 9 per cent.
Reforming Retail
The Government allows 100 per cent foreign direct investment (FDI) in cash and carry through the automatic route and 51 per cent in single brand. Besides, the franchise route is available for big operators. To further attract global retailers, the economic survey 2007-08 has suggested a share for foreign equity in all retail trade and 100 per cent in respect of luxury brands and other specialised retail chains.
Subscribe to:
Posts (Atom)