Marketting Condition Of Retail Stores

Comparative study on Retail stores and Grocery shops in Coimbatore.

Introduction 

Retail Sector is the most booming sector in the Indian economy. Some of the biggest players of the world are going to enter into the industry soon. It is on the threshold of a big revolution after the IT sector.

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The sector contributes 10% of the GDP, and is estimated to show 20% annual growth rate by the end of the decade. The current growth rate is estimated to be 8.5%.

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CRISIL report says that the retail market is most fragmented in the world and only 2% of the entire retailing business is in the organized sector. There are about 300 new malls, 1500 supermarkets and 325 departmental stores being built in the cities very soon.

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Retail is clearly the sector that is poised to show the highest growth in the next five years. The sector is set for a revolution, as both the present players and new entrants are gearing up to explore the market. This sector contributes 10% of India's GDP and the current growth rate is 8.5%.

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Current Scenario Of Retail Sector 

A glimpse of the International Retail

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One of the world's largest industries exceeding US$ 9 trillion.

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47 global fortune companies & 25 of Asia's top 200 companies are retailers.

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Dominated by developed countries.

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US, EU & Japan constitute 80% of world retail sales..

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Biggest player in India is Pantaloon Retail India Limited .  

Percentage of Organized Retail  

USA - 85% 

Taiwan - 81% 

Malaysia - 55% 

Thailand - 40% 

Brazil - 36% 

Indonesia - 30% 

Poland - 20% 

China - 20% 

India-3%

Estimates and Predictions  

the industry is estimated to be more than US$ 400 billion by a study of McKinsey.

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The Economist Intelligence Unit (EIU) estimates the retail market in India to increase to US$608.9 billion in 2009 from US$394 billion in2005.

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A KPMG report says that the organized retail would grow at a higher rate than GDP in the next five years.

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the retail sector would generate employment for more than 2.5 million people by the year 2010, says an analysis by Ma Foi Management Consultants Ltd. 

Benefits of FDI in Retail Sector         

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Higher competition would lead to higher quality in products and services. Better lifestyle as better products would be introduced. Exports would increase due to greater sourcing of major players. Investment in whole supply chain would increase. Technology would be upgraded in terms of logistics, production, and distribution channels. The markets of the sector would flourish and develop. Employment would increase and skills & manpower will develop. A strong retailing sector would promote tourism. Economies of scale would help lower consumer prices and increase the purchasing power of the consumer. In the long term it will be beneficial in the upgradation of agriculture and small scale & medium scale industries.

Retail Landscape Of India 

Modern retail development in India is focused on the following cities :

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West Mumbai Pune Ahmedabad

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North Delhi and the National Capital Region

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South Chennai Bangalore Hyderabad Coimbatore

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East Kolkata 

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Reasons for the fast Growth of Retail Companies in India:       

The Growth of Retail Companies in India is facilitated by certain factors like Existing Indian middle classes with an increased purchasing power. Rise of upcoming business sectors like the IT and engineering firms. Change in the taste and attitude of the Indians Effect of globalization. Heavy influx of FDI in the retail sectors in India

GROWTH OF RETAIL COMPANIES IN INDIA 

Growth of Retail Companies in India exhibits the boom in the retail industry in India over the years.

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Growth of Retail Companies in India is still not yet in a matured stage with great potentials within this sector still to be explored.

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The Growth of Retail Companies in India is most pronounced in the metro cities of India, however the smaller towns are also not lagging behind in this.

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Leading Indian Retailers  

Big Bazaar, Crossword, Ebony Retail Holdings Ltd., Food Bazaar, GlobusStores Pvt. Ltd., Food World Ltd., Pantaloon Retail India Ltd., Shoppers Stop, Subhiksha, Titan Industries, Trent andReliance Retail Ltd, New enterants like Wal-Mart Stores, Carrefour, Tesco, Boots Group, etc.

BIG BAZAR (FUTURE GROUP)

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Intro

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Pantaloon Retail is the flagship enterprise of the Future Group. Pantaloon Retail (India) Limited has spread across various businesses and cities in India. Pantaloon owns multiple retail formats and is able to cater to a large section of the society. The company has over 140 stores across 32 cities in India and 14000 employees. Big Bazaar, a hypermarket chain, was introduced in the year 2001, with an Indian touch of convenience and hygiene. Food Bazaar, food and grocery chain, and Central Mall located at various Metros are other

Company Profile 

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Big Bazaar is not just another hypermarket. It caters to every need of your family. Where Big Bazaar scores over other stores is its value for money proposition for the Indian customers. At Big Bazaar, you will definitely get the best products at the best prices - that’s what we guarantee. With the ever increasing array of private labels, it has opened the doors into the world of fashion and general merchandise including home furnishings, utensils, crockery, cutlery, sports goods and much more at prices that will surprise you. And this is just the beginning. Big

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Bazaar in India

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Ranges

Big Bazaar Exclusive Presence In Coimbatore 

Strategies Followed By Big Bazaar

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Media advertising

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Big bazaar(BB) frequently gives ads in daily news papers about its latest product arrivals and discount offers so that people can know the services available with big bazaar.

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Outdoor Advertising

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Issuing special offer notices in crowded public places helps customers stay in touch with new facilities and offers so that Placing banners and holdings in crowded places to spread its presence in Coimbatore city and to convey available product varieties to customers………..

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Pricing

BB has its own pricing scheme for every product they sell. This pricing strategy is totally different of those other retail biggies and grocery stores.

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from that

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Attractive discounts

BB frequently comes up

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with attractive discount

offers. During peak hours they will announce sudden discount offerings with particular product with short time limit

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‘All-Under-A roof’ Retail Approach

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BB follows ‘All Under One Roof’ strategy for selling various products. Normally BB outlets hold all kind of customer durable products so that whoever enters the outlet get all his/her product needs get satisfied

Entertainment & Food zones inside the outlet

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A new innovative idea of BB. Introducing food & gaming zones inside the outlet so that customers feel free to purchase and get relaxed even while shopping.

Challenges faced by Big Retail Companies 

Entry of competitors: The ease of entry for competitors to enter the market and to start competing and the barriers to entry that may exist.

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Threat of substitutes: The ease with which a product or a service can be substituted, especially made cheaper.

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Bargaining Power of Buyers : The position of the buyers, and the possibility of their being able to work together to gain efficiencies in buying.

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Bargaining Power of Suppliers: The position of the sellers. Do many suppliers exist or is there an existence of only a few suppliers?

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Rivalry among the existing players : The level of competition between the existing players, the size and the strength of the players in the industry.

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Shortage of quality real estate and infrastructure

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Opposition to Foreign Direct Investment from small traders

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Very high stamp duties on transfer of property

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Shortage of retail space in central and downtown locations

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Land-use conversion is time consuming and becoming complex

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Rigid building laws makes procurement of retail space difficult

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Non residents are not allowed to own property except they are of Indian origin

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Prohibition of Foreign investment in real estate business

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Customs duties are levied on import of goods in India

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Grocery shops (kirana shops)  

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Grocery shops are spread over entire Coimbatore city. Even in small streets we can locate them. These shops are called as kirana shops (a name given for grocery items in local term). They are grant players in grocery items market. Even though large retail biggies have set up their presence in Coimbatore they managed their business growth and sales. We shall compare retail biggies and these kirana stores.

Business setup §Petty shops were seen more in India. §Normally Petty shop does not need higher capital to startup a business. §We can shift this petty shop at any time to any where. §Petty shops earn more profit as compare to big retail shops. § Customer preference §Mostly middle and lower class people will prefer Petty shops. §They satisfy the wants and needs of their customer. §As Petty shops were seen a center of the environment, customers can buy their wanted products easily. So they could save time too. § § §

Debt purchases §Kirana stores allow customers to buy product on debt which cannot be done in retail biggies also low cost sales is possible with grocery shops. § Quick Reachability §As kirana stores are available all over the city easy access is possible while retail stores are situated is any particular place where huge customer availability can be obtained which is also a big hurlde for people who stay in far away places from these retail biggies.

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OPERATIONS OF KIRANA STORES Here price of the product is fixed by the owners of the Kirana shops They purchase goods from Retailers. But Retailer purchase different type of goods from different type of Agencies §(for e.g)For purchasing of agriculture product like vegetables directly from Farmers. (to get quality items in low price). §Masal products is purchased from masala producers(e.g) sakthi masala. §Note books is purchased from note book stores in whole sale §Grocery items are purchased from particular agencies who provide such goods. §

Methods of selling goods §In a manufacturing company price of the products were fixed by themselves by calculating all of the expenses which were spent for the particular product. §Retailer purchase goods from manufacturing company by keeping some discount. Retailers sale the product to petty shop owners by keeping some percentage of discount. §Finally petty shop owners sale product to their customer by fixing their own price or by keeping MRP price. §In petty shop business runs in rotation. Some of retail owner ask petty shop owner to settle their money as whole, but in some condition petty shoppers keep retail money for a week and they settle it at the end of the week by full settlement.

Challenges faced by Petty shop owners Petty shop owners say that they may find loss but it never be too much as compare to departmental stores because departmental store will purchase good in large volumes but it is sold only in less unit but they may find more profit. It will be less as compare to dept store but they may never find any difference in their business. Many of the customer will like to buy product in big departmental stores in starting stage but when the shop goes old day by day purchasing power of the customer will be reduced. So automatically the prefer petty shop for purchasing goods. 

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Conclusion 

Retail Biggies (big Bazar ,More Shoppee etc.) has established them selves well in Indian Market scenario with large customer base from all classes of economy and still growing.

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Kirana stores which are in strong presence in economy have deep rooted their presence in India as a whole. Both are rivals for each other. Only the share of pie in overall Indian consumer market varies but both plays on same customer and product segments.

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Above findings clearly shows that both Retail Biggies and Kirana Shops have their own market where they are leaders and will grow and will continue to survive in the economy .

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