13886515 retail sector project report signed
TRANSCRIPT
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A PROJECT REPORTON
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I N T R O DUC TIO N
WHAT IS RETAIL?
The word retail is, in fact, derived from the French word retailer, which means
to cut off a piece or to break bulk.A retailer may be defined as a dealer or trader who
repeatedly sells good in small quantities.
The sale of goods or commodities in small quantities directly to consumers. Of, relating
to, or engaged in the sale of goods or commodities at retail. It also means to sell in
small quantities directly to consumers.
RETAIL -
The sale of goods individually or in small quantities to the public to sell or be
sold in small quantities to the public.
Retailing consists of the sale of goods or merchandise from a fixed location, such
as a department store or kiosk, or by post, in small or individual lots for direct
consumption by the purchaser. Retailing may include subordinated services,
such as delivery.
The sale of goods directly to the consumer; To sell at retail, or in small quantities
directly to customers; To repeat or circulate (news or rumors) to others; Of, or
relating to the sale of goods directly to the customer; In retail quantities, or at
retail prices
To sell directly to the consumer, usually in small quantities in comparison with the
total level of sale.
Any product for sale in a store or directly to a consumer.
Trade in which a client buys or sells an over-the-counter stock through a broker-
dealer.
Merchants selling tangible goods in a face-to-face environment who normally use
conventional terminals and swipe transactions.
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TYPES OF RETAIL SECTOR
Retailing is one of the pillars of the economy in India and accounts for 35% of GDP. The
retail industry is divided into organized and unorganized sectors. Over 12 million outlets
operate in the country and only 4% of them being larger than 500 sq ft (46 m2) in size.
Organized Retail
Unorganized Retail
O R G A N I Z E D R E T A I L
Organized retailing refers to trading activities undertaken by licensed retailers, that is,
those who are registered for sales tax, income tax, etc. These include the corporate-
backed hypermarkets and retail chains, and also the privately owned large retail
businesses.
Organized retail segment has been growing at a blistering pace, exceeding all previous
estimates. According to a study by Deloitte Haskins and Sells, organized retail has
increased its share from 5 per cent of total retail sales in 2006 to 8 per cent in 2007. The
fastest growing segments have been the wholesale cash and carry stores (150 per
cent) followed by supermarkets (100 per cent) and hypermarkets (75-80 per cent).
Further, it estimates the organized segment to account for 25 per cent of the total sales
by 2011.
UN O R G A N I Z E D R E T A I L
Unorganized retailing, on the other hand, refers to the traditional formats of low-cost
retailing, for example, the local kirana shops, owner manned general stores, paan/beedi
shops, convenience stores, hand cart and pavement vendors, etc.
Unorganized retailing is defined as an outlet run locally by the owner or caretaker of a
shop that lacks technical and accounting standardization. The supply chain and
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sourcing are also done locally to meet local needs. Its organized counterpart may not
obtain its supplies from local sources.
Difference between organized and unorganized retailing
The major differences between organized and unorganized retailing lies in its number
(chain) of store operations. An unorganized outlet may be just stand alone or can have
maximum of 2-3 outlets in a city, where as the organized outlets are "any retail chain
(more than two outlets)which is professionally managed (even if its family run), has a
accounting transparency (with proper usage of MIS and accounting standards) and
organized SCM with centralized quality control and sourcing (certain parts can be locally
made) can be termed as an "organized retailing" in India.
Retailing in India is predominantly unorganized. According to a survey by AT Kearney,
an overwhelming proportion of the Rs. 400,000 crore retail market is UNORGANISED.
In fact, only a Rs. 20,000 crore segment of the market is organized.
We are known as a nation of shopkeepers with over 12 million, the highest outlet
density in the world in the world with an estimated turnover of $ 200 billion. However a
disturbing point here is that as much as 96 per cent of them are smaller than 500square feet in area. This means that India per capita retailing space is about 2 square
feet (compared to 16 square feet in the United States). India's per capita retailing space
is thus the lowest in the world. Another point to note is that only 8 % of our population is
engaged in Retail whereas the global average is around 10-12%.
I N S T O RE R E T A I L E R S
This type of retail format is also known as the brick and mortar format. These retail
stores are in the form of fixed point sale outlets. They are specially designed to lure the
customers. There are different types of stores through which the instore retailers
operate.
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Branded Stores appear in the form of exquisite showrooms. Here the total range of a
particular brand is available and the quality of the product is certified by the government.
There are also multi brand specialty stores that sell a series of brands so that the
consumer can choose from the wide array of brands.
Department stores have a large number of brands and products catering to all basic
needs to luxurious items as well.
Supermarkets are basically self service retail stores. Discount Stores offer commodities
at reduced prices. In Hyper Marts customers have wide variety of products to choose
from and they are also available at discounted rates. Convenient stores are located in
prominent places within the reach of majority of the customers and do not operate in
stringent work hours.
Shopping Malls are a storehouse of a large variety of retail shops situated close to each
other.
RETAILING FORMATS IN INDIA
MALLS: The largest form of organized retailing today. Located mainly in metro
cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to 7, 00,000 sq
ft and above. They lend an ideal shopping experience with an amalgamation of
product, service and entertainment; all under a common roof. Examples include
Shoppers Stop, Piramyd, and Pantaloon.
SPECIALTY STORES: Chains such as the Bangalore based Kids Kemp, the
Mumbai books retailer Crossword, RPG's Music World and the Times Group's
music chain Planet M, are focusing on specific market segments and have
established themselves strongly in their sectors.
DISCOUNT STORES:As the name suggests, discount stores or factory outlets,
offer discounts on the MRP through selling in bulk reaching economies of scale
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or excess stock left over at the season. The product category can range from a
variety of perishable/ non perishable goods
DEPARTMENT STORES: Large stores ranging from 20000-50000 sq. ft,
catering to a variety of consumer needs. Further it is classified into localizeddepartments such as clothing, toys, home, groceries, etc.
DEPARTMENT STORES: Departmental Stores are expected to take over the
apparel business from exclusive brand showrooms. Among these, the biggest
success is K Raheja's Shoppers Stop, which started in Mumbai and now has
more than seven large stores (over 30,000 sq. ft) across India and even has its
own in store brand for clothes called Stop!.
HYPER MARTS/SUPERMARKETS: Large self service outlets, catering to varied
shopper needs are termed as Supermarkets. These are located in or near
residential high streets. These stores today contribute to 30% of all food &
grocery organized retail sales. Super Markets can further be classified in to mini
supermarkets typically 1,000 sq ft to 2,000 sq ft and large 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: These are relatively small stores 400-2,000 sq. feet
located near residential areas. They stock a limited range of high-turnover
convenience products and are usually open for extended periods during the
day, seven days a week. Prices are slightly higher due to the convenience
premium.
MBOs: Multi Brand outlets, also known as Category Killers, offer several brands
across a single product category. These usually do well in busy market placesand Metros.
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O VERV I EW O F I ND I A N RE T A I L SEC TO R
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. Although organized retail market is not so strong as of
now, but it is expected to grow manifolds by the year 2010. 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%, but 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.
The retail boom will face a strong competition from the 12 million mom-and-pop stores,
which are easily accessible and approachable and provide services like free home
delivery and goods at credit. But buying from Malls, Supermarkets and Department
stores like Subhiksha, Marks & Spencers, etc gives a different feeling and the
environment of pick and choose from a variety of products. A number of retail giants are
also going to explore the market such as Reliance Retail Ltd and Wal-mart. The
revolution is driven by large expectations where both domestic and international players
will be channel through which other large stores in India are spreading themselves
across the country.
Some of the players present in the industry:
Archies, Bata India Ltd, Big Bazaar, Crossword, Ebony Retail Holdings Ltd., Fabmall,
Food Bazaar, Globus Stores Pvt. Ltd., Health and Glow, Liberty Shoes Ltd., MTR Foods
Ltd., Music World Entertainment Ltd., Pantaloon Retail India Ltd., Shoppers Stop, StyleSPA Furniture Ltd, Subhiksha, Titan Industries, Lifestyle, etc.New entrants entering the
market soon will be Reliance Retail Ltd, Wal-Mart Stores, Carrefour, Tesco, Boots
Group, etc.
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EV OL U TIO N O F T HE SEC T O R
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101111111111111111111111111111111111111
M A R KET S T RUC T URE & M A J O R P L A YE RS GLOBAL
& INDIA
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Indian Retail: Past Vs Present
It is widely accepted that the retail industry has undergone a drastic change in last
five years and there is yet more to come. Let us compare the image of Indian retailing
in
2004-05 to that of its status in 2007-08 in the following table:
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Magnification of the Indian Retail Industry
Yardstick Situation in 04-05 Situation in
Value of retail sales Rs. 10,20,00 Rs
Annual growth rate
Value of organized market Rs 35,00 Rs
Share of organized market in the sector
Forecasts (after 5 years) about size of
organized retail market
Over Rs. 1,00,00 Rs.2,00,00
Forecasts about growth rate of organized
market
Aroun Aroun
The above table clearly shows that the retail market as well as the mindset required for
it has experienced a thorough revisal in the last three years. This is just the beginning
and Indians are sanguine that the sector will see rosy days in the future. This
confidence has helped India acquire the No.1 position among 30 most attractive
retailing destinations in the world according to the Global Retail Development Index of
2005 (by AT Kearney, India). Among emerging markets, India holds the second position
after China in the list of most favored retail destinations.
The retail industry employs a huge share of the total workforce in India. It is the second
largest employer after India. Presently 7 percent of the total labor force is employed in
the retail sector. According to available data it is also the largest employer in the
services sector and maximum growth in the non-agricultural sector has been witnessed
by retail trade. According to market analysts 300 new malls, 1,500 supermarkets and
325 departmental stores are going to come up in India in the next few days. The
shopping revolution that has led to this retail boom is going to continue and this is a
good news for the government as well as those who wish to work in the organized
sector.
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1997
1998
1999
2000 2
001
2002
2003
2004
2005
2006
2007
14
10%
9%
8%
7%
6%
5%
4%
3%
5.4%
6.6%
6.4%
5.2%5.6%
6.0%
6.0%
6.8%
9.0% 9.2%
8.90%
Projections of 8% sustainable
real GDP growth rate till 2020promise high growth potential
for Indian Retail
2%
1%
0%
CONTRIBUTION OF FDI IN RETAILING -
Permitting Foreign Direct Investment in the retailing sector can have immense benefits.
It can generate huge employment for the semi-skilled as well as illiterate population
which otherwise can't be employed in the already confined rural and organized sector.
The retail sector is highly dependent on the rural sector. Thus it can facilitate the
improvement of the standard of living of farmers by purchasing commodities at a
reasonable cost. It also stems out an indirect employment generation channel by
training and employing people in the transportation and distribution sectors such asdrivers, mechanics etc. It is also evident that real estate is a genuine challenge for
organized retailing. Traditional retailers can use this situation in their favor by taking
franchisees of the mega players of this industry. On the other hand, the consumer gains
from the wide variety of choices and a more diversified basket of prices available under
one roof. Secondly the indirect benefits like better roads, online marketing, expansion of
telecom sector etc. will give a 'big push' to other sectors including the rural one itself.
Last but not the least the huge tax revenue generated from these retail biggies and
collected in government coffers will gradually wipe out the ugly looking fiscal and
revenue deficits. Besides the transaction in foreign currencies by these MNCs will
create a balance in exchange rate and will bring in stable funds in the economy as
opposed to FII's hot money. This will in turn act as a boost to the developing (or
'transforming', as suggested by the USAID) economy of India. The phobias relating to
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FDI in the retail sector are unfounded as neither the retailing sector in India is an infant
industry, nor it can outweigh the paramount local tastes and preferences.
Let's pray that the retail sector like the IT and manufacturing sector brings happiness in
the eyes of the people and help remove the regional and class-based disparities.
BENEFITS TO THE GOVERNMENT
It will help in increasing employment levels as FDI Greater PerCapita Incom e
GreaterConsum erSpending due to
economic boom
would GDP owth
result in market growth and expansion which in turn Employ Benefits Greater
will result in employment generated at various Increasingment to Govt. Exports
Greater
levels
Increased consumer demand implies employment
Tax PayingPopulation Increased TaxRevenues
Reduced TaxEvasion
SourcingFrom India
generation across the value chain as certain areas in
retail does not need very high skill sets as basic needs are
high school graduates and other similar skill levels which
is currently a majorly unemployed demographic group.
ESTIMATES AND PREDICTIONS FOR RETAIL SECTOR:
At present, the industry is estimated to be at more than US$ 400 billion by a study of
McKinsey. The Economist Intelligence Unit (EIU) estimates the retail market in India will
increase to US$608.9 billion in 2009 from US$394 billion in 2005.
KPMG Report says that the organized retail would grow at a higher rate than the GDP
in the next five years. The retail sector would generate employment for more than 2.5
million people by the year 2010, predicts an analysis by MaFoi Management
Consultants Ltd.
Traditional vis a vis Modern Format Retailers
The retail boom will face a strong competition from the 12 million mom-and-pop stores.
These are easily accessible and provide services like free home delivery and goods at
credit, which is not possible with hypermarkets and supermarkets. Buying from Malls,
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Supermarkets and Department stores like Subhiksha, Marks & Spencers, etc. provide a
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different environment where one can pick and choose from a variety of products. Owing
to the entry of such big players, the small shopkeepers fear losing their business.
Reliance Retail Ltd. has been inviting such people to join in its Dairy business as
franchisees.
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L E G A L I SSU E S I N RE T A I L S EC TO R
Many countries specially in south east Asia like Malaysia, Indonesia and Thailand have
put in place tough regulations with a view to balance the conflicts of interests between
modern retail and the traditional retailers and suppliers to the modern retail. These
countries have imposed a number of restrictions on the growth of large retail companies
particularly the transnational companies as against fairly liberal approach to the retail
sector practiced until the late 1990s.
In India in a bid to cushion small retailers from corporate giants, the Centre is in
consultation with states for setting up a retail regulator. As per the consolations among
states, state level legislative authorities would wield powers to grant licenses to retailers
for operating business.
The regulators in coordination with the state governments would also demarcate zones
in the cities for setting hypermarkets. Moreover, the regulators would work in tow with
competition commission to oversee pricing of products so that small retailers do not fall
prey to predatory pricing. States would submit the final guidelines on the regulatory
mechanism in 2 months to Commerce & Industry ministry.
In fact, the proposal is part of the Icrier report on Big Versus small retail recently
submitted to the government. We have had several rounds of consultations with the
state governments and other ministries. We are now awaiting their comments on the
report, a senior commerce ministry official said. The policy framed by the government
based on the report would also set the ground for FDI in retail, which has been facing
problems due to lack of consensus among political parties.
The regulator would also look into real estate cornering by large retail chains to restrict
competitor access and complaints of muscling out smaller retailers by price
undercutting.All the following statutory provisions related to following acts are applicable to retail
industry
1) Shops & Establishment
2) PF & Misc.Provisions Act
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3) ESI Act
4) Bonus Act
5) Minimum Wages Act
6) Industrial Disputes Act
7) Gratuity Act
8) Maternity Act
9) Welfare Act
As part of a big move to liberalize the foreign direct investment (FDI) regime, the
Cabinet today approved new FDI norms for several sectors including retailing. Retail
presents the next big opportunity (worth $250 billion) for the foreign investor. However,
foreign direct investment in the India retail sector is currently restricted. There are
several methods pursuant to which a foreign investor may gain exposure to the Indian
retail sector:
(i) Pursuant to Press Note No. 3 (2006 series), foreign direct investment up to 51% is
now permitted in single brand retail trade with the prior approval of the government;
(ii) Pursuant to Press Note No. 4 (2006 series), foreign direct investment up to 100% is
now permitted under automatic route for cash and carry wholesale trade; or
(iii) The foreign investor could enter into franchise arrangements.
LVMH is among the international brands that have indicated interest in a 51% stake.
However, multi-brand retail stores such as Wal Mart are not yet permitted.
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CURR E NT I SSUES
The boom in Indias retail sector will continue and top $365 billion in 2008, against $300
billion a year. With a year-on-year growth of 30-35 per cent, the retail trade sector in
India will top $440 billion by 2010, says the study by the Associated Chambers of
Commerce and Industry of India (Assocham). The study estimated the organised retail
segment would witness an additional investment of $70 billion by 2010. In 2008, the
investment size would be in the region of $25-28 billion.
Mukesh Ambani, RILs chairman, plans to open 100m sq ft of retail space in India by
2010. Local press reports talk of between 5,000 and 10,000 stores spread across 1,500
towns and cities. Ambani has described the concept as a pan-India footprint of multi-
format retail outlets.Reliance will operate hypermarkets, convenience and speciality
stores, as well as business-to-business operations, selling food, clothing, electrical
goods, consumer durables, luxury goods and financial and travel services. The project
will employ 1m people within five years.
Protests against reliance fresh in UP and Jharkhand.
Chinese conglomerate Li & Fung Group said it is studying India's logistics and retail
sectors to expand its presence in the country. The company, engaged in distribution,
retail, logistics, private equity and properties businesses, currently sources consumerproducts worth 550 million dollars from India every year for its global operations."We will
look at India for innovative designs and creativity. In the next three years we expect to
more than double our sourcing from this country," Li & Fung Group Chairman Victor K
Fung said today on the sidelines of a FICCI event.
Taxpayers, especially corporates in the retail sector who have to bear the burden of
huge rentals for commercial space, could get some relief soon. The government is
considering allowing taxpayers to deduct tax at source (TDS) on rents after reducing the
total outgo on service tax. North Block is examining a proposal in this regard after
receiving references from field formations, and a clarification may be issued shortly. To
put it simply, if a taxpayer pays Rs 100 as rent he is liable to pay service tax at the rate
of 12%, taking the total outgo to Rs 112. There was a confusion as to whether TDS
would be on Rs 100 or Rs 112. As the field formations were in dilemma, in some
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instances they had demanded deduction of tax on the final amount of Rs 112. The
confusion had arisen after the government brought commercial rental service under tax
net in the Budget for 2007-08.
Wal-Mart Store Inc. will open its first cash-and-carry centre in India in 2009, the head of
its India operations said on Wednesday. Wal-Mart, which has a venture with India's
Bharti Enterprises for cash-and-carry wholesale operations, had earlier said it aimed to
open the first of its centres by year-end and open 10-15 centres over seven years.
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I NTR O D U CT I O N
Established in 1998 as part of the Tata Group, Trent Ltd. operates Westside, one of
India's largest and fastest growing chains of retail stores.
The Westside stores have numerous departments to meet the varied shopping needs
of customers. These include Menswear, Womens wear, Kids wear, Footwear,
Cosmetics, Perfumes and Handbags, Household Accessories, lingerie, and Gifts.
The company has already established 31 Westside departmental stores (measuring
15,000 - 30,000 square feet each) in Mumbai, Bangalore, Hyderabad, Jaipur,
Chennai, Pune, Delhi, Noida, Gurgaon, Ghaziabad, Kolkata, Nagpur, Indore,
Ahmedabad, Lucknow, Ludhiana, Surat, Mysore & Rajkot. The company hopes to
expand rapidly with similar format stores that offer a fine balance between style and
price retailing.
H IS T O RY
This story began circa 1998 when The Tatas acquired Littlewoods a London
based retail chain. This acquisition was followed by the establishment of Trent Ltd
(a Tata enterprise that presently operates Westside). Littlewoods was subsequently
renamed Westside.In a rapidly evolving retail scenario, Westside has carved a niche
for its brand of merchandise creating a loyal following. Currently, the company has
31 Westside stores measuring 15,000-30,000 square feet each across 17 cities. With a
variety of designs and styles, everything at Westside is exclusively designed and the
merchandise ranges from stylized clothes, footwear and accessories for men, women
and children to well-co-coordinated table linens, artifacts, home accessories and
furnishings. Well-designed interiors, sprawling space, prime locations and coffee
shops enhance the customers shopping experience.
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THEIR MISSION
At Westside the mission is to be regarded by their customers as the most
relevant retailer in the country.
In order to achieve this goal, they shall develop a comprehensive
understanding of their needs, strive to win their confidence, and offer them
best-in-class products and services at affordable prices.
They shall always be in the forefront of fashion and services by anticipating
and exceeding the expectations of their customers.
Their leadership will be the product of their styling, quality and service
consciousness.hey will continue to scale new heights of excellence through
teamwork, in an atmosphere that encourages creativity and innovativeness.
It is their policy to satisfy our customers with the range, quality and value of
the products we offer. However, if they are dissatisfied with any item that
they might have purchased they would take the necessary measures to assist
them.
They expect their customers to return unused merchandise along with its
receipt within 30 days; they would exchange the returned items or give the
customers a complete refund.
In the event that the customers do not have the receipt they would offer
them an exchange or provide them a gift voucher to the current or last
known selling price.
They have complete confidence in the quality of our merchandise however
should if customers have any grievances, they would be happy to address
them once they are brought to our attention.
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4 Ps
PRODUCT
The Westside stores have numerous departments to meet the varied shopping needsof customers. These include Menswear, Womens wear, Kids wear, Footwear,Cosmetics, Perfumes and Handbags, Household Accessories, lingerie, and Gifts.Some of them are as follows;
PRICE
Menswear: For men at work and at play, Westsides menswear range extends from
formal to casual to sporty. There is also a wide price range starting from value andextending into premium.
Womens wear: For women there are western casual, western formals & very classyethnic wear with a look unique to Westside. The range does not end with clothesbut extends right into accessories with a great range of jewelry, scarves & otheraccessories. Also available are comfortable lingerie at affordable prices.
Kidswear: With a dash of attitude and a sprinkle of playfulness, WestsidesKidswear has a huge range to select from. Catering to a wide age band startingfrom infants to early teens the garments sport a look that is hip, trendy and very
international.
Footwear: The range encapsulates footwear for the entire family with a widevariety of choice, great styles and colours to charm everyone.
Cosmetic, Perfumes and Handbags: The Westside store has a separate section forcosmetics and perfumes in some stores. The handbags are tastefully crafted and rangefrom casual to formal wear.
Household Accessories: The Westside motto is -Your Dreams Our Vision-whichtranslates into a Household section that caters to every taste. This section is one of
the most contemporary with every item being exclusive & unique. The merchandiseis well coordinated & allows customers to mix & match and to create their ownlook. The range extends from bed linen, towels, table linens to coordinatedcrockery, a cook shop, glassware and much more to set up an entire home. Therange also includes high quality home accessories and dcor product.
Gifts : A wonderful gift section with the trendiest of collections that will leave onespoilt for choice. This section matches every requirement and suits every occasion.
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Westsides gift section is vast and includes gifts ranging from photo frames, candlestands, candles, vases, ceramic mugs, lanterns, lamps and more.
PLACE
The company has 31 Westside departmental stores up till now (measuring 15,000 -30,000 square feet each) in Mumbai, Bangalore, Hyderabad, Jaipur, Chennai, Pune,Delhi, Noida, Gurgaon, Ghaziabad, Kolkata, Nagpur, Indore, Ahmedabad,Lucknow, Ludhiana, Surat, Mysore & Rajkot. The company hopes to expandrapidly with similar format stores that offer a fine balance between style and priceretailing.
PROMOTION
Westside does its regular brand building through advertisement in the mediawithbrand ambassador yuvraj Singh and other young models. More importants its in-house promotions which peak during main festive seasons, summer, diwali andChristmas. The promotion are mostly them based, with decorations to match, livebands and other attractions.
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F I NAN C I AL I NTER P RET A T I O N
DIVIDEND:On 30th June 2008, the Board of Directors recommended a final dividend of Rs. 7/-per share on 1,95,32,896 equity shares (70%) (Previous year interim dividend - 70%on 1,57,60,737 equity shares) involving a distribution of Rs. 13.67 crores (previousyear Rs. 11.03 crores). The total outflow will be Rs. 15.24 crores including the tax ondividend of Rs.1.57 crores.
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ISSUE OF EQUITY SHARES ON RIGHTS BASIS:During the year under review, the Company allotted 31,48,264 equity shares of Rs10/- each at a premium of Rs. 490/- each for an amount aggregating to Rs. 157.41crores on Rights basis to the existing equity shareholders of the Company in theratio of one fully paid equity share for every five equity shares held on the record
date i.e. on 15th May 2007. The shares have been listed on Bombay StockExchange Limited and National Stock Exchange of India Limited.
DISTRIBUTION OF REVENUE:
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H RP o lic y & C o d e o f C o n d u c t
S i n c e W e sts i d e i s a Tat a Ent e r p r i s e th e y adop t th e sa
m e Cod e o f Condu c t po l i c i e s a s Tat a
Code of Conduct
1. National InterestA Tata company shall be committed in all its actions to benefit the economicdevelopment of the countries in which it operates. It shall not engage in any activitythat adversely affects such an objective. It shall strive to make a positivecontribution to the achievement of such goals at the international, national andregional level, as appropriate.
2. Financial Reporting And Records
A Tata company shall prepare and maintain its accounts fairly and accurately in
accordance with the accounting and financial reporting standards which representthe generally accepted guidelines, principles, standards, laws and regulations of thecountry in which the company conducts its business affairs.
3. Competition
A Tata company shall fully strive for the establishment and support of acompetitive, open market economy in India and abroad, and shall cooperate inefforts to promote the progressive and judicious liberalisation of trade and investmentby a country.
4. Equal - Opportunities Employer
Employee policies and practices shall be administered in a manner that ensures thatin all matters equal opportunity is provided to those eligible and that decisions arebased on merit.
5. Gifts and donations
A Tata company and its employees shall neither receive nor offer or make, directlyor indirectly, any illegal payments, remuneration, gifts, donations or comparablebenefits which are intended to or perceived to obtain business or uncompetitive
favours for the conduct of its business.
6. Government Agencies
A Tata company and its employees shall not offer or give any company funds orproperty as donation to any government agencies or their representatives, directly orthrough intermediaries, in order to obtain any favourable performance of officialduties
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7. Political Non-Alignment
The company shall not offer or give any company funds or property as donations,directly or indirectly, to any specific political party, candidate or campaign.
8. Health, Safety and EnvironmentA Tata company shall be committed to prevent the wasteful use of natural resourcesand minimise any hazardous impact of the development, production, use and disposalof any of its products and services on the ecological environment.
9. Quality of Products and Services
The quality standards of the company's goods and services should meet the requirednational standards, and the company should endeavour to achieve internationalstandards.
10. Corporate Citizenship
Tata companies are encouraged to develop social accounting systems and to carryout social audits of their operations.
11. Cooperation of Tata Companies
In the procurement of products and services, a Tata company shall give preferenceto another Tata company as long as it can provide these on competitive termsrelative to third parties.
12. Public representation of the company and the Group
A Tata company shall honour the information requirements of the public and itsstakeholders. It will be the sole responsibility of these authorised representatives todisclose information on the company or the group.
13. Third-Party Representation
Parties which have business dealings with the Tata Group but are not members ofthe group, such as consultants, agents, sales representatives, distributors,contractors, suppliers, etc. shall not be authorised to represent a Tata company if
their business conduct and ethics are known to be inconsistent with this code.
14. Use Of The Tata Brand
The use of the Tata name and trademark owned by Tata Sons shall be governed bymanuals, codes and agreements issued by Tata Sons. The use of the Tata brand is
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defined in and regulated by the Tata Brand Equity & Business PromotionAgreement.
15. Ethical Conduct
Every employee of a Tata company, including whole-time directors and themanaging director, shall deal on behalf of the company with professionalism,honesty and integrity, as well as high moral and ethical standards.
16. Group Policies
A Tata company shall recommend to its board of directors the adoption of policiesand guidelines periodically formulated by Tata Sons.
17. Shareholders
A Tata company shall be committed to enhance shareholder value and comply withall regulations and laws that govern shareholders' rights.
18. Regulatory Compliance
Every employee of a Tata company shall, in his or her business conduct, complywith all applicable laws and regulations, both in letter and in spirit, in all theterritories in which he or she operates.
19. Concurrent Employment
An employee of a Tata company shall not, without the prior approval of themanaging director of the company, accept employment or a position ofresponsibility (such as a consultant or a director) with any other company, norprovide 'freelance' services to anyone.
20. Conflict of Interest
An employee of a Tata company shall not engage in any business, relationship oractivity, which might detrimentally conflict with the interest of his company or theGroup. A conflict of interest, actual or potential, may arise where, directly orindirectly:
21. Securities transactions and confidential information
An employee of a Tata company and his or her immediate family shall not deriveany benefit or assist others to derive any benefit from access to and possession ofinformation about the company or the Group, which is not in the public domain andthus constitutes insider information.
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22. Protecting Company Assets
The assets of a Tata company shall not be misused but shall be employed for thepurpose of conducting the business for which they are duly authorised.
23. Citizenship
An employee of a Tata company shall in his or her private life be free to pursue anactive role in civic or political affairs as long as it does not adversely affect thebusiness or interests of the company or the Group.
24. Integrity of Data Furnished
Every employee of a Tata company shall ensure, at all times, the integrity of data orinformation furnished by him or her to the company.
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F UTURE P LANS O F W E S T SI DE
Westside, one of largest and fastest growing chains of retail stores in India, is on
an expansion path these days. The retail chain has just launched KIDSWEST, a
kids program that incorporates learning with playing, in its stores operating in
Delhi, Bangalore and Pune.
Westside, Tatas leading chain of stores, is planning to adopt the franchisee route
to expand its presence in tier-II and tier-III cities. Through this model, 25-30
franchisee-operated stores of across 8,000-12,000 sqft and with an initial
investment of Rs 1.2 crore, per store would be set up in the next five years. With
this move, it plans to reach out to consumers across 37 cities.
Trent-controlled retail chain Westside is planning to open 18 flagship stores in
calendar year 2008. Market sources said that Westside, one of Indias fastest
growing retail store chains, will target mostly tier II and III cities as part of its
expansion plans for 2008, with flagship stores in the 40,000-50,000 square feet
range. At least 80 per cent of the property acquisitions required for Westsides
next phase of expansion have been wrapped up.
Trent is also set to launch its second Star One Global hypermarket (under the Star
India Bazaar initiative) after Ahmedabad, at Vashi in sub-urban Mumbai.
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S U GG E S T I O N S AND C O N C LU SI O N S
Modern retailing is all about directly having "first hand experience" with customers, giving themsuch a satiable experience that they would like to enjoy again and again. Providing great
experience to customers can easily be said than done. Thus challenges like retail differentiation,merchandising mix, supply chain management and competition from supplier's brands are thetalk of the day. In India, as we are moving to the next phase of retail development, each endeavorto offer experiential shopping. One of the key observations by customers is that it is verydifficult to find the uniqueness of retail stores. The problem: retail differentiation.
The next problem in setting up organized retail operations is that of supply chain logistics. Indialacks a strong supply chain when compared to Europe or the USA. The existing supply chain hastoo many intermediaries: Typical supply chain looks like:- Manufacturer - National distributor -Regional distributor - Local wholesaler - Retailer - Consumer. This implies that global retailchains will have to build a supply chain network from scratch. This might run foul with the
existing supply chain operators. In addition to fragmented supply chain, the trucking andtransportation system is antiquated. The concept of container trucks, automated warehousing isyet to take root in India. The result: significant losses/damages during shipping.
Merchandising planning is one of the biggest challenges that any multi store retailer faces.Getting the right mix of product, which is store specific across organization, is a combination ofcustomer insight, allocation and assortment techniques.
The private label will continue to compete with brand leaders. So supplier's brand wil take theirown way because they have an established brand image from last decades and the reasons can beattributed to better customer experience, value vs. price, aspiration, innovation, accessibility of
supplier's brand.
In their preparation to face fierce competitive pressure, Indian retailers must come to recognize thevalue of building their own stores as brands to reinforce their marketing Positioning, tocommunicate quality as well as value for money. Sustainable competitive advantage will bedependent on translating core values combining products, image and reputation into a coherentretail brand strategy.