Retail Sector

RETAIL

SECTOR MALINI DEEPIKA SADIK SRIRAM

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 ORGANIZED RETAIL 





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.

UNORGANIZED RETAIL  



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.

TYPES OF RETAIL SECTOR 100% 90% 80% 70% 60% 50% 40% 30% 20%

unorganised Organised

10% 0% US

INDIA Source: The Great Indian Retail Story, 2009.

RETAILING FORMATS IN INDIA MALLS: Ranges from 60,000 sq ft to 7,00,000 sq ft and above. Examples include Shoppers Stop, Piramyd, and Pantaloon.  SPECIALTY STORES: focusing on specific market segments and have established themselves strongly in their sector. Kids Kemp, Music World .  DISCOUNT STORES: As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk. 

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

COMPETITORS 

In North America  Kmart,



Target, ShopKo and Meijer,

Canada  Zellers,

The Real Canadian Superstore and Giant Tiger



Mexico  Comercial



UK  Tesco.

Mexicana and Soriana.

WAL MART 

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.

WAL MART 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

o

o

India’s GDP growth of 10% in 2007-08, reflecting the booming economy of the country. The sector is on a high growth trajectory and is expected to grow by more than 27%over the next 5 to 6 years. Retail sales in India are hovering around 33-35% of GDP as compared to around 20% in the US.

THANK YOU