RETAIL SECTOR

MALINIDEEPIKASADIKSRIRAM

RETAILING -SKY IS THE LIMIT

Retail comes from the French word retaillier, which refers to "cutting off, clip and divide“.

Retail marketing try to discover the understanding of the people’s motives and interests.

A moral obligation to observe customer’s behavior as well as customers also observe the marketer’s behavior.

“CONSUMPTION = DEVELOPMENT”

ORIGIN Early Trade:

Peddlers and Producers:

Early Markets:- LO KASS – The 1st person to open Chain of

shops in China over 2200 years ago.

First Retail Self Service Store: - Groceteria in Los Angels.- Albert Gerrand(1915).- 1st documented self service store.

CATEGORIES

Food & Beverage Store: Grocery Stores. Specialty food stores. Beer, vine and liquor stores.

Clothing & Accessories Stores: Clothing, shoes , luggage and leather good stores. Jewelry.

Building Material, Garden Equipment Stores.

Merchandise Store: Miscellaneous Retail Store. Sporting Goods, Hobby, Book & Music Store. Furniture ,Home Furnishing & electronic

appliance Stores.

Motor Vehicles: Automobile dealers. Auto parts , accessories and tire stores. Gasoline stations.

CHANGING PARADIGM

TYPES OF RETAIL SECTOR

Professionally managed has a accounting transparency with proper usage accounting standards.

These include the corporate backed hypermarkets and retail chains.

According to a survey by AT Kearney ,only a Rs. 20,000 crore segment of the market is ORGANIZED.

Owner lacks technical & accounting standardization

For example, owner manned general stores, convenience stores, hand cart and pavement vendors, etc.

According to a survey by AT Kearney , an overwhelming proportion of the Rs. 400,000 crore retail market is UNORGANISED.

ORGANIZED RETAIL UNORGANIZED RETAIL

TYPES OF RETAIL SECTOR

0%10%20%30%40%50%60%70%80%90%

100%

US INDIA

unorganised

Organised

Source: The Great Indian Retail Story, 2009.

RETAILING FORMATS IN INDIA

MALLSMALLS: : Ranges from 60,000 sq ft to 7,00,000 sq ft and above. Examples include Shoppers Stop, Piramyd, and Pantaloon.

SPECIALTY STORESSPECIALTY STORES: : focusing on specific market segments and have established themselves strongly in their sector. Kids Kemp, Music World .

DISCOUNT STORESDISCOUNT STORES: : As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk.

DEPARTMENT STORESDEPARTMENT STORES: : Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Reliance Fresh, More.

HYPER MARTS/SUPERMARKETSHYPER MARTS/SUPERMARKETS: : Large self service outlets, catering to varied shopper needs are termed as Supermarkets. ranging from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales.

CONVENIENCE STORES: CONVENIENCE STORES: Small stores 400-2,000 sq. feet located near residential areas. Prices are slightly higher due to the convenience premium.

4 P’S IN RETAIL SECTOR

Product.Place.Promotion.Price.

RETAIL SECTOR GROWTH IN INDIA

Source: Datamonitor

CEO CEO –– MIKE DUKE MIKE DUKE

COMPETITORS In North America

Kmart, Target, ShopKo and Meijer, Canada

Zellers, The Real Canadian Superstore and Giant Tiger

Mexico Comercial Mexicana and Soriana.

UK Tesco.

WALMART Founded by Sam Walton in 1962,

incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972.

It is the world's largest public corporation by revenue, according to the 2008 Fortune Global 500.

In accordance with its global strategy, it proposed a 50:50 joint venture with Bharti Enterprises targets up to 25 percent lower prices than wholesalers.

WALMART SUCCESS

Empowering associates. Maintain technology superiority. Build loyalty among associates, customers,

and suppliers. Global Expansion for new market opportunity. Effective use of logistics management.

FINANCIAL STATUS In 2008, Wal-Mart was 67th most

profitable corporation.

For the fiscal year ending January 31, 2008, Wal-Mart reported a net income of $12 billion on $340 billion of sales revenue (3.5% profit margin).

CEO – KISHORE BIYANI

PANTALOON Company has crossed $1 billion turnover mark

during the year under review.

12 million square feet of retail space in 71 cities and towns and 65 rural locations across India. Headquartered in Mumbai (Bombay), Pantaloon Retail employs around 30,000 people.

A front runner in retail with over 2.7 million square feet of retail space.

21 departmental stores.

COMPETITORS Shoppers Stop. RPG Retail (Foodworld, Musicworld) Reliance Fresh. Subhiksha Trading Services. TATA groups(Lifestyle,Westside) Birla’s More.

LINES OF BUSINESS Fashion - Pantaloons, Central, aLL, Brand Factory, Blue

Sky, Top 10, Fashion Station, Lee Cooper (JV), General Merchandise - Shoe Factory, Navras,

Electronics Bazaar, Furniture Bazaar, KB'S FAIR PRICE Electronics - eZone, Electronic Bazzaar, STAPLES(JV) Furniture - Collection i, Furniture Bazaar, Home Bazaar E-tailing (Online Shopping) - www.futurebazaar.com Wellness - Star & Sitara, Tulsi Malls - Central (Bangalore, Hyderabad, Pune, Mumbai,

Vadodara, Gurgaon, Indore) Investment & Savings - Insurance: ULIP, Pension,

Endowment etc.

SUCCESS FACTORS

Entrepreneur led, professionally managed and experienced team.

Strong projects and operations capabilities. Vast range of lifestyle and value retailing

products and services. Strong distribution and logistics network and

supply chain. Large base of loyal customers.

FINANCIAL GROWTH

One-year comparative graph with BSE

SWOT ANALYSIS

STRENGTH Consumer spending increasing at 11%

annually. 2nd largest contributor to GDP after

agriculture at 20%. Mall Mania. Increase in spending per capita Income. The increasing share of young population in

total population of India. Media.

WEAKNESS

Lack of huge investments for expansion.

Lack of good infrastructure. Lack of proper logistics. Cost of business operations is very

high in India.

OPPORTUNITIES India ranks 1st for top international

destination for retail investment. U.S $ 350 billion retail market. 4th largest economy in purchasing terms

after US, china & Japan. Expected to increase to 15-18% by 2011. Employment(2 million jobs by 2010). Huge Untapped market.

THREATS

Poor monsoons and low GDP Growth could affect consumer spending drastically .

Price sensitive market. Thefts. Increase in Competition.(More competition

reduce demand & price.) Unavailability of qualified personnel to

support exponential growth in retail. Security Concerns.

PEST ANALYSIS

POLITICAL

Strong opposition to FDI in India’s retail sector.

Taxation policy – VAT.

Low access to banking facilities.

ECONOMIC

GDP Growth.

Foreign Investments.

Money Supply.

Inflation.

SOCIAL

Corporate Social Responsibility.

Environmental Safety.

Ease of shopping.

TECHNOLOGY

Online Shopping.

Retail media networks(RMN).

ERP System.

CRM System.

SUPPORTIVE SECTORS

IT.

Media.

Real Estate.

Tourism.

STRATEGY The hypermarket would be selling the

products on EDLP (every day low price) basis at prices 15-20 percent lower than market prices.

Buying products from the first level suppliers.

Shift of advertising from product awareness to product preference .

FUTURE PERCEPTIVE FDI approval.

Increasing at a rate of 10% yearly.

India will have 600 new shopping centers by 2010.

Food is the most dominating sector and is growing at a rate of 9% annually.

Providing employment to 8 per cent of the nation’s workforce.

PROJECTED RETAIL GROWTH

CONCLUSION

o India’s GDP growth of 10% in 2007-08, reflecting the booming economy of the country.

o The sector is on a high growth trajectory and is expected to grow by more than 27%over the next 5 to 6 years.

o Retail sales in India are hovering around 33-35% of GDP as compared to around 20% in the US.

THANK YOU