a study of organized retail business in...

A STUDY OF ORGANIZED RETAIL

BUSINESS IN SELECTED

CITIES IN WESTERN

MAHARASHTRA

A Thesis submitted to

Shivaji University, Kolhapur

For the Degree of Doctor

of Philosophy

in

Commerce and Management

Under the Faculty of Commerce

By

Sayali A. Pataskar B.E., M.B.A.

Under the Guidance of

Dr. C. S. Dalvi M.M.S., Ph.D.

Chh. Shahu Central Institute of

Business Education & Research, Kolhapur

2011

DECLARATION

I Hereby declare that the thesis entitled “A STUDY OF ORGANIZED

RETAIL BUSINESS IN SELECTED CITIES IN WESTERN

MAHARASHTRA” completed and written by me has not previously formed the

basis for the award of any Degree or Diploma or other similar title of this or any

other University or examining body.

Place: Kolhapur Research Student

Date: (Mrs. Sayali Pataskar)

Chapter Content Chapter Name and Contents Page No.

III Theoretical Aspects of Retailing

3.1 Introduction 45

3.2 Functions of Retailing 46

3.3 Types of Retail Organizations 48

3.3.1 Retailer Classified on The Basis of Ownership 48

3.3.2 Retailers classified on the Basis of Strategy 52

3.3.2.A General Merchandise Retailers 52

3.3.2.B Food Retailers 54

3.4 Methods of Customer Interaction 57

3.5 Changing Scenario of Retail 61

3.5 .a Role of Internet 61

3.5 .b Branding through Retailers 62

3.6 Retail Mix 63

3.7 Strategic Retail Planning Process 63

3.8 Retail Market Strategy 65

3.9 Competitive Advantage 66

3.9.1 Approaches to Gain Competitive Advantage 67

3.10 Implementing Retail Strategy 70

3.11 Manufactured Brands 74

3.12 Private Labels 74

3.12.1 Advantages of Private Labels 75

3.12.2 Limitations of Private Labels 77

3.13 Unorganized Retailing 78

IV Retail Industry – Worldwide and India

4.1 Worldwide Retail Business 81

4.2 Evolution of Retailing 82

4.3 Evolution of Modern Retail 86

4.4 Evolution of Retail Formats in Various Countries 91

4.5 Emerging Trends in Retail in Various Countries 97

Chapter Content Chapter Name and Contents Page No.

4.6 Factors Attracting Global Retailers to India 100

4.7 Successful Global Retailer ‘Wal-Mart’ 103

4.8 History of Retailing in India 105

4.9 Present Indian Retail Scenario 106

4.10 Structure of the Indian Market 108

4.11 Retailing Formats in India 117

4.12 Emergence of Organized Retail format in India 120

4.13 Region-wise Analysis of Indian Retailing 123

4.13.1 Northern India 124

4.13.2 Southern India 128

4.13.3 Eastern India 132

4.13.4 Western India 134

4.14 Main Drivers of Retailing in India 143

4.15 Impact on Unorganized Sector 151

4.16 Challenges facing the Organized Retail Industry 154

V Data Analysis and Interpretation

Analysis – Consumer Behaviour and Organized Retail 159

Analysis – Unorganized Retailers 287

Hypotheses Testing 308

VI Findings and Suggestions

Findings – Organized Retailing 315

Findings – Unorganized Retailing 324

Suggestions 328

Conclusion 333

Bibliography

Annexure

Chapter Table No. Table Heading Page No.

5.52 Sufficient Cooling of Cold Drinks 256

5.53 Whether Products in Small Quantity Are Available 257

5.54 Whether Products in Large Quantity Are Available 258

5.55 Help from Sales Attendant for Searching Item 259

5.56 Whether Arrangement of Racks and Shelves is

Comfortable

260

5.57 Whether Area Provided For Each Category is Sufficient 261

5.58 Opinion about Space for Movement between Shelves 262

5.59 Feeling of Purchasing Unnecessary Items 263

5.60 Any Complaints Regarding Retailer 264

5.61 Filed Complaint about Some Thing 265

5.62 Complaints Filed by Customers 266

5.63 Provision of Hassle Free Complaint Handling 678

5.64 Efficient Customer Help Desk Handling 268

5.65 Satisfaction about Billing Procedure 269

5.66 Store Timing Convenience for Customers 270

5.67 Feeling about Store Environment 271

5.68 Changing Room Facility at Apparel Section 272

5.69 Satisfaction about Size and Location of Entrance 273

5.70 Vehicle and Baggage Security 274

5.71 Opinion about Congested Area 275

5.72 Whether Signage Provides Required Information 276

5.73 Whether Testing of Electrical/ Electronic Goods before

Selling Done

277

5.74 Attractive Store by Considering It’s Décor 278

5.75 Opinion Regarding Dress of Staff and Manager 279

5.76 Sales Attendant’s Interest in Finding out Items 280

5.77 Sales Attendant’s Interest to Choose Right Item 281

5.78 Liking About Trying New Retail Outlets

282

Chapter Table No. Table Heading Page No.

5.79 Opinion about liking of Big Retailers’ entry 283

5.80 Visit to Modern Retail Formats- Entertainment cum

Shopping

284

5.81 Years in business 286

5.82 Type of Ownership 287

5.83 Type of Shops 288

5.84 Average Number of Customers Visiting Daily 289

5.85 Monthly Sales 290

5.86 Awareness about Modern Retail Shop 291

5.87 Adverse Impact on Business because of entry of Modern

Retailers

292

5.88 Amount of Negative Impact on Profit of Business 292

5.89 Opinion about Impact on Volume of Business 293

5.90 Opinion on ‘Entry of Big Retailers has Made Negative

Impact on Profit’

293

5.91 Reasons behind the Problem 294

5.92 Strengths of Kirana Shop as Compared to Modern

Retails

295

5.93 Weaknesses of Kirana Shop as Compared to Modern

Retails

296

5.94 Rank of the Benefits for Which Customers Prefers Small

Shop

297

5.95 Different Changes Made in Outlook of the Shop to

Match the Competition

298

5.96 Changes in Storage of Products to Suit the Competition 298

5.97 Customers Known Personally by Shop Owner 299

5.98 Credit Period Allowed 300

5.99 Percentage of Providing Home Delivery Service

301

5.100 Opinion - Impact on Employment in Unorganized Retail 301

5.101 Whether Allowing Your Next Generation to Come in this

Business

302

Chapter Graph No. Title of Graph Page No.

5.30 Ranking Given to ‘Status Enhancement’ Factor by

Respondents from Kolhapur

196

5.31 Factor Most Liked About Organized Retail 199

5.32 Ranking for Reliability of Organized Retailer for

‘Availability of the Product’ (Sangli)

202


‘Efficient Checkout’ (Sangli)

202


‘Quality of Private Label Product’ (Sangli)

203


‘Accurate Bills’(Sangli)

203


‘Discount and offers’ (Sangli)

204


‘Availability of the Product’ (Solapur)

204


‘Efficient Checkout’ (Solapur)

205


‘Quality of Private Label Product’ (Solapur)

205


‘Accurate Bills’(Solapur)

206


‘Discount and Offers’ (Solapur)

206


‘Availability of the Product’ (Satara)

207


‘Efficient Checkout’ (Satara)

207


‘Quality of Private Label Product’ (Satara)

208

Chapter Graph No. Title of Graph Page No.


‘Accurate Bills’ (Satara)

208


‘Discount and offers’ (Satara)

209


‘Availability of the Product’ (Kolhapur)

209


‘Efficient Checkout’ (Kolhapur)

210


‘Quality of Private Label Product’ (Kolhapur)

210


‘Accurate Bills’(Kolhapur)

211


‘Discount and offers’ (Kolhapur)

211

5.52 Opinion about Parking 214

5.53 Opinion of Respondents for Parking Facility (Sangli) 215

5.54 Opinion of Respondents for Parking Facility (Solapur) 215

5.55 Opinion of Respondents for Parking Facility (Satara) 216

5.56 Opinion of Respondents for Parking Facility (Kolhapur) 216

5.57 Opinion on ‘Outer look of the building attracts

Shoppers.’

217

5.58 Opinion about Effective Check- In and Check-Out

System

218

5.59 Satisfaction with Price Charged 222

5.60 Opinion about Price Level 223

5.61 Awareness among Respondents about Offers 225

5.62 Satisfaction with Schemes and Offers 227

5.63 Preference to Private Brands Introduced by Retail Shop

228

5.64 Opinion about Quality of Private Label

229

Chapter 1

Research Methodology

1. 1 Introduction to subject - The term ‘retailing’ refers to any activity that involves a sale to an individual

customer. Currently, Retailing is the buzzword in Indian Industry. The $ 6.6

trillion retail industry is the largest private industry in the world which

contributes significantly in world’s GDP, employment generation and wealth

creation.1 Because of the saturation of US domestic market and increase of rich

middle class in India, opportunities in retail sector are incredible.

Retailing in India could become a $ 496 billion industry by the 2011 - 12, if it

continues in its current growth of income of the consumers, increasing demand

for products/services, changing lifestyle and buying behaviour and better

products and shopping options. The organized retail industry will grow up to 16

percent by 2011 - 12.2. There will be 600 malls in operation across the country by

2011 - 12. With these levels of growth, there is high scope in this dynamic

business. Large Indian corporate groups like Reliance, Tata, Birla and Mittal are

exploring opportunities in retailing. There will be increase in awareness levels

with respect to products, usage and all leading to higher aspiration level among

the customers.

1.1 (a) Indian Retail Scenario

Retail is the largest industry in the world and is controlled by few powerful

businesses. These are now entering in India, where organized retail trade is only

about 6% and there are huge growth potentials 3. Retailing in India is thoroughly

unorganized. Traditionally, the retail industry in India comprised of large,

medium and small grocery stores and drug stores which could be categorized as

unorganized retailing. Most of the organized retailing in India had recently

started and was mainly concentrated in metropolitan cities. Even though India has

1

over 5 million outlets of all sizes and styles, the country lacks in modern sense of

organized retail stores. This presents great opportunity to retailers. As much as

96% of the 5 million outlets are smaller than 500 square feet in area. This means

that India’s per capita retailing space is about 2 square feet which is lowest in the

world.4 Just over 8% of India’s population is engaged in retailing as compared to

20% in U.S.

The retailing industry seems poised for a significant growth in the coming years

owing to the presence of a vast market, growing consumer awareness about

product quality and services, higher disposable income of consumers and the

desire to try out new products. In the past couple of years, the organized, multi-

outlet retailing concept had gained acceptance in India. Leading global retailers

such as Wal-Mart, Tesco and others are keen to enter actively in the Indian

retailing industry.

According to Euro Monitor International, a leading provider of global consumer

market intelligence, sales from large format stores (supermarkets and

hypermarkets) was increased by 30% in 2005. In the year 2002, food-related

items accounted for nearly 71% of retail sales in India 5. However, it was

interesting to note that there had been a decline in the purchase of food-related

items. In recent years, there has been higher spending on non-food items.

Lifestyle in India is changing and the concept of ‘value for money’ is picking up

local companies and local-foreign joint ventures are expected to more

advantageously position than the purely foreign ones. Up and coming modern

retail channels such as hypermarkets, supermarkets, convenience stores and

discounters were unable to make a significant mark in grocery retailers’ value due

to a limited geographical spread in consumer reach. Department stores within

mixed retailers were the forerunner in growth, being boosted by the introduction

of lifestyle concept stores.

In a developing country like India, a major chunk of a consumer’s expenditure is

on retail products. This expenditure is only likely to increase in the near future.

Retailing in India, in spite of industry majors entering is still at its nascent stage.

According to India’s Ministry of Commerce & Industry, only about 6% of the

2

Table 1.2: Space Occupation by Retailers

Retailer Estimated space occupation on

2010

(in million sq. ft.)

Pantaloon 30

Reliance 100

Bharati 15-18

Aditya Birla Group 13-15

Spencers (RPG) 1

Shoppers Stop 5-6

(Source:www.indiaonestop.com)

2) Managing man power

A retail sector is expected to generate employment in access of 20 lakhs by 2010

of which 5 to 6 lakh are directly linked with core retailing. Managing manpower

will be the toughest challenge for organized retail players. Companies are

intending to hire people for critical functions like store design, back end logistic

and merchandising. An organized retail shop needs one employee to cover 275

sq.ft. Thus the challenge is to retain the skilled and talented employees.

3) Supply chain

There will be need to make the sufficient and proper supply chain by making

appropriate provisions. Significant investment in restructuring the supply chain

and logistic management is needed.

4) Partner Selection

The current policy restricts FDI to 51% for multinational retailers and this

translates to joint venture and arrangement of local players. The choice of partner

is very crucial in order to achieve long term success.

5) Cultural Diversity

Because of geographical and socio-economic diversity in India, there is no role

model for Indian suppliers and retailers to adopt and expand in the Indian

6

context. Different policies in different province are needed in order to be

successful.

6) Competition from unorganized sector

Traditional retailing has established in India for last some centuries. It is the low

cost structure & operated at negligible real estate and labour. To handle these

challenges, efficient management and virtual merchandising is needed.

1.1 (e) Retailing as an engine for economic growth

In India, the unorganized retailing sector comprises around 94 % while that of

organized sector just 6 % that is mainly in major metropolitan and urban areas.

Indian retailing is traditionally dominated by a small family run “Kirana” store.

Retailing in India is the second largest untapped market after China. Despite the

huge size of the industry, only 8% of the country’s population is engaged in

retailing while that in United States of America; it is 20%. The positive factors

such as increased purchasing power rise in number of double income families and

demanding customers, due change in lifestyle and paucity of time, increasing

consideration of convenience are helping to grow retail sector. Retailers are

providing wide range of products, quality and value for money, apart from

creating a memorable shopping experience. Organized retailing has made a

considerable headway in product like food, groceries, clothing, books and music.

Food & groceries segment has undergone transformation with super market chain

like Food world, Nilgiris, Subhiksha, Apana Bazaar etc. The apparel section has

seen the emergence of store like Pantaloon, Shopper’s Stop, Lifestyle, Westside

etc. and Archies, Music World and Crossword cater the books and music market.

Retailing is estimated to generate about Rs. 13.5 trillion worth of consumers

spending and this activity has as its customers the entire one billion people in the

country. Consumers are increasingly seeking convenience in shopping. The

growing proposition of working women further fuels the desire of convenience.

Consumers also increasingly want the shopping experience to be enjoyable.

7

smaller towns and cities, registering a commendable growth 28% growth over the

previous year. Indian retail sector Analysis shows that from 2006 to 2010 the

organized retail sector will grow at 49.53%. Retail sales are predicted to rise

rapidly than consumer expenditure during 2003-08. The forecast growth in retail

sales during 2003-08 is 8.3% per year compared with 7.1% for consumer

expenditure 11. Inevitably modernization of Indian Retail Sector will be reflected

in rapid growth in sales of supermarket, department stores and hypermarkets.

1.3 Statement of the Problem

There is growing preference by affluent and upper middle classes for shopping at

modern organized retail stores, given the convenience they offer such as

shopping ambience, variety and a single point source of purchases. There is no

doubt that traditional retail has been performing a vital function in the economy

and significant source of employment. However, it suffers from huge

inefficiencies as a result of which, it is in trouble. The challenges currently faced

by the Indian organized retail sector are various and these are stopping the Indian

retail industry from reaching its full potential. Retailers have got many

opportunities to make most of the retailing business by adopting some strategies

to eliminate problems as well as to suit the customers’ requirements.

Keeping in mind above factors, organized retailing was selected for the purpose

of study. And hence the present research work “A Study of Organized Retail

Business in selected cities in Western Maharashtra” is an effort to carry out in

depth research in this field.

1.4 Objectives of Study

1. To study current organized retail industry in India.

2. To know various product categories sold in organized retail stores in

selected cities in western Maharashtra.

3. To study various challenges for current retail industry in western

Maharashtra.

11

4. To determine various opportunities for the retail industry in selected cities

in western Maharashtra.

5. To study impact on unorganized retailers due to modern retail formats in

selected cities in western Maharashtra.

6. To know customer buying behaviour when they are engaged in buying

process in selected cities in western Maharashtra.

7. To study change in attitude of people while purchasing and impact due to

strategies like pricing, promotion by modern retailers in selected cities in

western Maharashtra.

8. To know preference for private labels against recognized brands by

customers in organized retailing.

1.5 Scope of the Study

The geographical scope of the study covers four big cities namely Kolhapur,

Solapur, Sangli and Satara in Maharashtra. The topical scope covers strategies

and policies in modern organized retail stores and does not consider non store

retailing or e-tailing. The analytical scope covers fulfillment of objectives set for

the study. The functional scope covers meaningful suggestions for the organized

retail industry.

1.6 Limitations of the study

1. Organized retail has wide scope, but researcher has limited study only to

store retailing. Non-store retail, e-tailing are not the part of this research

work.

2. As it was impossible to consider all kinds of modern retail stores, the

researcher has taken into consideration only multiproduct, multibrand

retailers and not single line or single brand.

3. While colleting data, researcher has selected only four major cities in

Western Maharashtra, where considerable scope of modern retail was

available.

12

Primary data were collected from traditional retailers. Considering different types

of retail stores, variety of traditional retail stores covered with judgmental

sampling. Primary Data were collected from modern retailers. All available

modern chain retail formats were considered in 4 different cities.

1.8.4 Sample Size

For collecting data for the research work, 500 numbers of respondents were

considered. The sample is divided into four different groups for four different

cities namely Kolhapur, Solapur, Satara and Sangli.

Table 1.6: Sample Size for Customers

Sr. No. City Number of

Respondents

1 Kolhapur 125

2 Sangli 125

3 Solapur 125

4 Satara 125

Total 500

Primary Data were collected from modern retailers. All available modern chain

retail formats were considered in 4 different cities.

16

Table 1.7: Sample Size for Modern Retailers

Sr.

No.

City Number of

Retailers

Names of Modern retailer

1 Kolhapur 3 D- Mart, Big Bazaar,

Vishal Mega Mart,

2 Sangli 3 D- Mart, Big Bazaar,

Godrej Aadhar

3 Solapur 2 D- Mart, Sai Krupa Super

Market

4 Satara 2 Vishal Mega Mart, Godrej

Aadhar

Total 10

There is variety of modern organized retail stores like hypermarkets,

supermarket, discount stores, convenience stores etc. Each type store is different

in terms of facilities, services and variety of products. All available existing

modern retail stores for the purpose of research were considered. Unorganized

retailers who are involved in traditional retailing were selected to find out impact

on unorganized sector because of entry of modern retailers. Traditional shops in

the radius of 1 Km. around modern retail format were selected. In Kolhapur city

there were 12 traditional retailers, in Sangli 3 and in Solapur and in Satara only 5

traditional retailers were found in the area around organized retail format in 1 km.

radius.

Table 1.8: Sample Size for Traditional Retailers

Sr. No. City Number of Retailers

1 Kolhapur 12

2 Sangli 10

3 Solapur 8

4 Satara 5

Total 35

17

Chapter –II

Literature Review

2.1 Books

2.2 Journals and Magazines

2.3 Reports

2.4 Dissertation and Thesis

Chapter –II

Literature Review

Number of Thesis, Dissertations, Research articles in journals and magazines

were found while carrying out present research work on “A Study of Organized

Retail Business in selected cities in Western Maharashtra”. This Literature

Review formed a base for completion of this study on organized retailing.

2.1 Books

Parasraman M.G. (2003)1 - In ‘Understanding Shoppers: Building powerful

brands using shopper research’, Tata McGraw-Hill, author has categorized

shoppers in two typologies: Hindi medium type and English medium type, where

the former were more traditional and looked up to the latter for innovating

cultural leads. The study indicated that male shoppers belonged to the following

segments: traditional, pleasure seeker, social chameleon, and intrinsic progressive

man. Women shoppers were contented conservative housewives, the role bound

archetypal provider, the anxious working woman rebel.

Newman Andrew, Peter Cullen (2006)2 – The Book on ‘Retailing: Environment

and Operations’, by Thompson Publication explains retailing as set of activities

that markets products or services to final consumers for their own personal or

household use. It does this by organizing their availability on relatively large

scale and supplying them to consumers on relatively small scale. According to

authors, the responsive retailer recognizes the importance of additional services

for the customer.

Jain J.N., P.P. Singh (2007)3 - Authors in their book on ‘Modern Retail

Management’ by Deep & Deep Publication Pvt. Ltd., have given detail

classification of various retailers as well as competitive analysis. Book also

throws light on Retail locations; Store planning, Design and Layout of retail

stores. Product and Merchandise Management is discussed while giving idea

21

G. Laxmi Prabha, Amatul Baseer (2007)14 – ‘Emerging Retail Trends in India’,

here authors have discussed about emerging trends in Indian Retail. Strong

regional and national players are emerging across formats and product categories.

Real estate developers are also moving fast through the learning curve to provide

qualitative environment to the consumers. The shopping mall formats are fast

evolving. Partnering among brands, retailers, franchisees, investors and malls is

taking place. The demanding assertive Indian consumer is now sowing the seeds

for an exciting retail transformation that has already started bringing in larger

interest from international brands. With the advent of these players, the race is on

to please the Indian consumer and its time for the Indian consumer to sit back and

enjoy the hospitality of being treated like a king.

Gupta C.P., Mitali Chaturvedi (2007)15 – ‘Retailing: An Emerging Trend in

India’, authors have commented that, in India Retail Industry has become the

second largest employer after agriculture. It is found that the gap between living

standards of the consumers of metro and non-metro cities are narrowing own day

by day. One of the prime concerns of the retailers is the availability of space for

the retailing in India. The availability of prime space would definitely enable the

retailers to deliver better quality products and services to the consumers, resulting

in increase in operational efficiencies and decline in costs for the supply chain.

This new arena will offer new jobs, high salaries, better living conditions, world

quality products and services, a unique shopping experience and more social

activities and huge business opportunities to the world retail players.

Gupta S.L., Tripat Kaur (2007)16 – ‘Exploring the trends of retail formats in

India – A study of Shopping malls’, this study presents an overview of the

present situation of organized retail formats with a special reference to shopping

malls. It is concluded that understanding of our shopper’s attitude towards

different characteristics of the stores and retailers response towards the shoppers’

mood. The results suggested that if proper window display and other methods of

presentation of merchandising are done, the retailers are able to attract more

shoppers. Study also focuses on product categorization, merchandise co-

ordination and market segmentation.

25

Malliswari M N, (2007)17 – ‘Emerging Trends and Strategies in Indian

Retailing’, here author in her article on ‘Emerging Trends and Strategies in

Indian Retailing’ has given overview on recent strategies in Indian Retailing. The

peculiarity of the Indian Retail scene lies in the co-existence of innumerable

small informal retail stores alongside with modern chain stores and malls. The

poor and middle class constituting a major part of population, patronize the

smaller stores as they are more comfortable with them. Small local stores still

find patronage from substantial number of customers belonging to the middle

class and above because of their convenient location in residential areas.

Md. Ismail El-Adly (2007)18 – In ‘Shopping malls attractiveness’, he undertook

a segmentation approach to shopping malls attractiveness in the UAE revealed

six mall attractiveness factors from the shoppers’ perspective: comfort,

entertainment, diversity, mall essence, convenience, and luxury. It also arrived at

three malls shopper segments, specifically, relaxed shoppers, demanding

shoppers, and pragmatic shoppers. Each segment was profiled in terms of mall

attractiveness attributes, demographics and shopping behaviour.

Palveen Kaur, Raghbir Singh, (2007) 19 – ‘Uncovering retail shopping motives

of Indian Youths’, authors looked at uncovering retail shopping motives of Indian

youth and reveal that Indian youth primarily shops from a hedonic perspective.

Various factors were identified covering shopping motives: hedonic (meeting

friends and getting new ideas), market mavens (to identify new trends), peer

group association, utilitarian motive, status consciousness and impulse shopping

and economic shopping motives.

Panandikar S.C. , Rajiv Gupte,(2007)20 – ‘Models of Consumer Behaviour in

Mall Culture’, here authors state that malls have revolutionized the concept of

retailing and they pose serious competition to their conventional counterparts in

terms of service, ambience, price, access to the brands etc. Furthermore they have

created a niche in the minds of consumer through a perception of innovation style

and status. They observed that most preferred items are food and stationary

followed by toys and beauty care products. Price was observed as influencing

factor followed by product offer, shop display and previous experience.

26

created to lure the Indian consumer away from the traditional Kirana. The Kirana

are not playing salient spectators to this new reality. Although current

demographic indicators and growing consumerism point positively towards the

growth of organized retailers, consumers are still loyal to Kiranas. In spite of the

success stories like Big Bazaar, the Indian Kirana community which forms the

hub of small business and entrepreneurs in India is still holding ground in the

extremely competitive Indian retail market.

Ramesh H.N. (2008)31- ‘Cyber retailing - Indian Profile’, this article highlights

on importance of retailing, scope and types of retailing and retail mix and retail

strategy for successful retailing. Retailing can not be overlooked for its

contribution to the economic development. Lot of professionalism was used for

acquiring, maintaining and retaining the customers. Many industrial houses have

entered into retailing with twin objectives. One of the objectives is to provide

superior service to the customers for building brand loyalty for which

intermediaries may not be so effective. Another objective is to reap the superior

profit in the terminal market. This article notes negative and positive impact of

information technology on retailing.

Ravichanran K., David Sam Jayakumar, Abdus Samad K., (2008)32 –

‘Service Quality: Food Retail’, this paper identifies the critical quality dimension

of food and grocery shoppers based on the Retail Service Quality Scale Proposed

by Dabholkar A. (1996) that takes into account the retail settings. It investigates

the service quality items under five different factors and the results have been

indicated. The quality of service provided by food retailers and be assessed by

pioneering work done by the experts in retail marketing.

Bapat A., Patil P., (2009)33 – ‘Retail Management – A Road Ahead’, it has been

stated that Indian retailing enjoys many unique features, is still in primitive way.

They are not in a position to implement world class practices of supply chain

management. The concepts of quick response are missing. The two bases of

modern retailing the electronic data interface and mutually respectable

partnership among retailers and suppliers are missing to great extent in Indian

context. Also, Indian marketing channel members are performing some

unnecessary tasks, which make channel structure heavy and inefficient.

30

Cherish Mathew, (2009) 34 – ‘Organized Retailing - Opportunity or Threat?’,

this article deals with comparison of the marketing systems of organized and

unorganized retailing to assess the feasibility of ‘Organized Retailing’ as a

strategic choice out of new business opportunities. The phenomenal size of

retailing business in India alongwith high potential has attracted leading Indian

and multinational operations towards ‘retailing’ and expanding their business

portfolio. However the current trend of aggressive expansion strategy b major

organized retailers has created resistance from some socio-political forces thus

raising apprehensions about the future scope of the business.

C V Krishna, (2009) 35 – ‘Next Generation Retailing, An Empirical Study using

Factor Analysis’, this article deals with comparison of marketing system of

organized and unorganized retailers. The phenomenal size of retailing business in

India along with high growth potential has attracted leading Indian and multi

national corporations towards ‘retailing’ or expanding their business portfolio.

The current trend of aggressive expansion strategy by major organized retailers

has created resistance from some socio-political forces, thus raising

apprehensions about the future scope of this business.

Choudhari Himanshu, Vandana Sharma (2009) 36 - ‘Empirical Study on

Operational Efficiency in Retail Stores in Chandigarh Tricity’, in this article,

authors have stated that, it is essential to know-how of all f actors which will help

retailers to sustain in the long run. It was observed that there is significant

influence of format of retail stores and location on the operational efficiency.

Location of the retail store must be central to the customers to encourage higher

footfall and combat competition.

Dutta Nandita (2009) 37 - ‘Friend, Wholesaler an Guide’, here she speaks about

‘How German wholesaler ‘Metro’ is helping customers like ‘Kiranas’ to grow

their business. Metro Cash & Carry India, the Indian arm of German Wholesaler

Metro AG opened its Kolkata Store six months ago. Metro helped small Kirana

shop in a village outside Kolata transform from a hole-in-the-wall outlet to a

central point of the village. For customers like hotels restaurants and caterers,

Metro has a community approach. The idea is to give them a platform to meet

31

J. Prasad, A. R. Aryasri (2010) 49 - Authors in their Research Paper on ‘A study

on Role of Consumerism in Modern Retailing in India’ have stated that

emergence of hypermarkets; shopping malls have become destination centers to

cater ever-changing need of consumers. It is imperative to understand changing

trends of consumerism that led to the growth of organized retailing in India. The

study puts great focus upon overview of selected organized retail formats like

food and grocery, apparel and throws light upon changing trends of retailing and

prospects associated with it.

Sathyanarayanan R.S. (2010)50 – Author has suggested in their research on

‘Measuring Service Quality in the Context of Indian Retail’ that offering service

quality in retail is highly imperative for retailers, as competition is getting stiffer

day-by-day and customers are becoming more demanding and discerning.

Creating unique customer experience is essential for retailers to woo customers

and retain them in long run. Hence Retailers should focus on improving customer

service quality by carefully analyzing perception and expectation of customers

towards the store on various dimensions, and taking appropriate actions to

improve the situation.

Sahoo Swaroop Chandra, Das Prakash Chandra (2010) 51 – ‘Consumer

Decision Making Styles in Shopping Malls’, an attempt has been made by these

authors to know about the decision making styles of buyers in shopping malls.

The purchase of goods and services include a number of factors that could affect

each decision. Increase in numbers of variety of goods and stores, shopping malls

and the availability of multi-component products have broadened the sphere of

consumer choice and have complicated process of decision making.

Saxena Nitu, (2010) 52 – ‘Service Orientation in Retailing’, author has stated

that, service orientation in retailing has come to the fore with the emergence of

organized retailing, and has spread its roots to traditional formats as well. The

changing expectations of consumers have necessitated that services are

effectively planned and executed. Successful retailers know that the demand for

their merchandise is not just price elastic, as economists would like to believe,

but also service elastic. Accordingly service orientation should be integrated into

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all aspects of retailing. The goal should not be only customer satisfaction, but

also customer delight.

Singh Swati (2010) 53 – ‘The Rise of Non-Metros- New Retail Frontiers’ in this

article researcher discusses the changes taking place in Tier II and III cities and

also the factors that have facilitated transformation. As markets in metros face

saturation, organized retailing is moving to non-metros to make the most of

changing behavioral patterns brought about the increased earnings, western

influences, increased number of working women and desire for luxury items.

Consumers in small cities want to eat shop and get entertained under the same

roof like their counterparts in metros.

Verma Amit,(2010) 54 – ‘Category Management- Merchandise buzz in Retail

Operations’, this article presents a literature survey on the concept of category

management in retail operations based on the exposition on category

management given in research papers. Category management has gained

importance as a result of dynamic changes in consumer outlook coupled with

increasing competition. It helps to ensure better product planning on the retail

shelves so that it can increase profitability and meeting consumer demands.

2.3 Reports

KPMG in Hong Kong, China ‘Retail Outlook for China (2005) 55 - In China,

both hypermarkets and supermarkets are perceived as food specialists and include

fresh food produce to cater to local tastes. Convenience stores have been another

format that have done exceedingly well in larger cities. These convenience stores

have increased their services beyond snack foods, beverages and dairy products

to include financial services and utility bill payment facilities. China’s traditional

urban retail format – the department store – has not been very successful in

competing with modern trade. Mall development in China started in the early

1990s. By 2002, there were over 100 malls in China, most of them concentrated

in the large cities such as Shanghai, Chengdu, Guangzhou and Beijing. At

present, there are more than 400 shopping centers and malls operating in China.

36

entering the fray in a big way. Even at the going rate, organised retail is expected

to touch Rs.2,30,000 crores (at constant prices) by 2010, constituting roughly 13

per cent of the total retail market.

2.4 Dissertation and Thesis

Kulkarni A.A. (2000) 64 - In his Ph.D. Thesis on ‘Analysis of emerging practices

in retailing in Kolhapur City’, the researcher has tried to observe the changes in

the field of retailing. The study deals with retailing in consumer goods only. It

considers textiles, food and personal care products, books, music cards, gift

articles and consumer durables. Information from retailers regarding merchandise

handled organizational structure and product range, was collected and analysed.

Researcher had found scope for modern retailing in future.

Chile Sarjerao (2009) 65 - In M.Phil. Dissertation he has stated in his research on

‘Effects of Organized Retailing on Small Traders in Kolhapur City’ that the

effect on small traders is negligible because of personal relations with customers.

People also prefer to buy things in small quantity and mostly the purchase on

credit. Vendors of grocery and garment have been affected but effect is not

significant.

40

References:

1. Parasraman M.G. (2003) - Understanding Shoppers: Building powerful

brands using shopper research, Tata McGraw-Hill.

2. Newman Andrew, Peter Cullen (2006) - Retailing: Environment and

Operations, Thompson Publication.

3. Jain J.N., P.P. Singh (2007) - Modern Retail Management, Deep & Deep

Publication Pvt. Ltd.

4. Nair Suja (2008) - Retail Management - Himalaya Publishing House.

5. Levy Michel, Weitz Barton A. and Pandit Ajay (2008) - Retailing

Management –Sixth Edition, Tata McGraw-Hills Publishing Company Ltd.

6. Pradhan Swapna (2009) - Retailing Management: Text & Cases, 3rd edition,

Tata McGraw – Hill, New Delhi.

7. Pradhan Swapna (2009) - Retailing Management: Text & Cases, 3rd edition,

Tata McGraw – Hill, New Delhi.

8. Martin, Turley (2004), Malls and consumption motivation: an exploratory

examination of older generation Y consumers, International Journal of

Retail and Distribution Management, Vol.32 No. 10, 464 – 475.

9. Sinha Piyush Kumar, Dwaraka Prasad Uniyal (2005), Using Observational

Research for Behavioural Segmentation of Shoppers, Journal of Retailing

and Consumer Services, Vol.12, No.1.

10. Amatul Baseer, G. Laxmi Prabha (2007) - Prospects and problems of Indian

Retailing, Indian Journal of Marketing – October, 26 – 28.

11. Anbalagan M., V. Gunasekaran( 2007), Retail Consumers Market in India –

The Next Big Leap, Indian Journal of Marketing (Vol.XXXVII, No. 3),

March , 27 – 29.

12. Angshuman Paul, Aditi Prasad, Shashank (2007), Business & Economy, 19

Oct. - Nov., 82 - 87.

13. Dassani Vaishali (2007), Reliance Mart, Images Retail, Sept. 2007, 44- 48.

14. G. Laxmi Prabha, Amatul Baseer (2007) - Emerging Retail Trends in India,

Indian Journal of Marketing – December, 23 – 27.

15. Gupta C.P., Mitali Chaturvedi (2007), Retailing: An Emerging Trend in

India, Indian Journal of Marketing, June, 39 – 44.

41

Chapter –III

Theoretical Aspects of Retailing

3.1 Introduction

3.2 Functions of Retailing

3.3 Types of Retail Organizations

3.3.1 Retailer classified on the basis of Ownership

3.3.2 Retailers classified on the basis of Strategy

3.3.2.A. General Merchandise Retailers

3.3.2.B Food Retailers

3.4 Methods of Customer Interaction

3.5 Changing Scenario of Retail

3.5.a Role of Internet

3.5.b Branding through Retailers

3.6 Retail Mix

3.7 Strategic Retail Planning Process

3.8 Retail Market Strategy

3.9 Competitive Advantage

3.9.1 Approaches to Gain Competitive Advantage

3.10 Implementing Retail Strategy

3.11 Manufactured Brands

3.12 Private Labels

3.12.1 Advantages of Private Labels

3.12.2 Limitations of Private Labels

3.13 Unorganized Retailing

Chapter –III

Theoretical Aspects of Retailing

3.1 Introduction

The word ‘retail’ is derived from the French word retaillier, meaning ‘to cut a

piece-off’ or ‘to break bulk’. In most simple terms, it implies a first hand

transaction with the customer. The term retail refers to the sale of goods or

commodities in small quantities directly to consumers. Thus, a retailer is a

company or an organization that purchases products from individuals or

companies with the intent to resell those goods and services to the ultimate, or

final, consumer. The U.S. federal government considers a retailer a business that

sells more than 50 percent of its products to the ultimate consumer1. Ultimate

consumers, or end users, are families, individuals, or households that plan to

consume the products or services themselves.

3.1.1 Definition

Retailing is a set of activities that markets products or services to final consumers

for their own personal and household use. It does this by organizing their

availability on a relatively large scale and supplying them to consumers on

relatively small scale. Any business that directs its marketing efforts towards satisfying

the final consumer based upon, the organization of selling goods and services as a means of

distribution2.

David Gilbert has defined retail as any business that directs it marketing efforts

towards satisfying the final consumer based upon the organisation of selling goods

and services as a means of distribution3.

As per the above definition the final consumer is a key concept within the distribution

chain, especially since the retailers are at the end of the chain and directly interact

with the customer. Moreover, the final consumer is presumed to be the final user of a

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(i) Retailer’s vision regarding the size and nature of his business,

(ii) The level of control he wishes to have,

(iii) The level of structure they are willing to deal with,

(iv) The business vulnerability to lawsuits,

(v) Tax implications of the different ownership structures,

(vi) Expected profit (or loss) of the business.

(vii) Whether or not one is required to re-invest earnings in the business,

(viii) Retailer’s need for access to cash from the business for personal use.

Some basic legal forms of ownership for retailers:

3.3.1. i) Sole Proprietorships

The vast majority of small businesses start out as sole proprietorships. These firms are

owned by one person, usually the individual who has the day-to-day responsibility

for running the business. In this case, the retailer owns all the assets of the

business and the profits generated by it. It assumes complete responsibility for any of

its liabilities or debts. Sole proprietors are in complete control and, within the

parameters of the law, may make decisions as they see fit. Sole proprietorship may

be at a disadvantage in raising funds and are often limited to using funds from

personal savings or consumer loans.

3.3.1. ii) Partnerships

A partnership is a common format for carrying out business activities on a small or

medium scale. In a partnership, two or more people share ownership of a single

business. As in case of proprietorships, the law does not distinguish between the

business and its owners in partnership. Partnerships are relatively easy to

establish; however, time should be invested in developing the partnership

agreement. With more than one owner, the ability to raise funds may be

increased. The partnership may have a limited life; it may end upon the

withdrawal or death of a partner.

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3.3.1. iii) Joint Venture

A joint venture is not well defined in the law. Unless incorporated or

established as a firm as evidenced by a deed, joint ventures may be taxed like

association of persons, sometimes at maximum marginal rates. It acts like a

general partnership, but is clearly for a limited period of time or a single project.

If the partners in a joint venture repeat the activity, they will be recognized as an

ongoing partnership, and will have to file as such and distribute accumulated

partnership assets upon dissolution of the entity.

3.3.1. iv) Limited Liability Company (LLC)

The LLC is a relatively new type of hybrid business structure that is now

permissible in most states. It is designed to provide the limited liability features

of a corporation and the tax efficiencies and operational flexibility of a

partnership. The owners are members, and the duration of the LLC is usually

determined when the organization papers are filed. The time limit can be

continued if desired by a vote of the members at the time of expiration.

3.3.1. v) Independents

An Independent retailer operates only one retail establishment. The majority

of these stores are owner or family managed. The case of entry into this type

of retailing makes the independent retail store attractive to those with few

capital resources. Although independent retailers make up 80 percent of all

retailers, their sales represent only 40 percent of retail sales4. Independent

retailers have the advantage of being able to respond quickly to their

customers’ needs and wants.

Due to the smaller size and location, independent retailers have greater

opportunities than other types of retailers to build customer relationships.

One of the most important variables for success as a small, independent

retailer is to develop strategic clarity. Strategic clarity is the commitment to

achieve an in-depth understanding of the retailer’s strengths and weaknesses,

including the strengths and weaknesses of its integrated retail management

and marketing programs.

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3.3.2.A iv)Off-Price Retailers

Off-price retailers resemble discount retailers sell brand-name Merchandise at everyday

low prices (EDLP). Off-price retailers rarely offer many Services to customers. The key

strategy of off-price retailers is to carry the same type of merchandise as traditional

department stores but offer prices that can be 40 to 50 percent lower7. To be able to

offer lower prices, off-price retailers develop special relationships with their suppliers

for large quantities of merchandise. Inventory turnover is the key to a successful off-

price retailing business. In addition to purchasing closeouts and cancelled orders, off-

price retailers negotiate with manufacturers to discount orders for merchandise that

is out of season or to prepay for items to be manufactured, thus reducing the

buying prices of those items. Because off-price retailers do not ask the

manufacturers for additional services such as return privileges, advertising

allowances, or delayed payments, they are often able to get reduced prices for the

merchandise they purchase.

3.3.2. B) Food Retailers

There are many types of food retailers. To make their classifications easier to

understand, this section is broken down into the main types of food retailers. To

remain competitive in the mature food retail business, many retailers are carrying

merchandise outside their traditional lines. As the mass merchandisers industry

begins to mature, this channels vigorous focus on food as a vehicle for growth

results in super centers that are beginning to look similar to conventional grocery

stores. The conventional supermarket channel, in turn, has fought back with an

expanded offering of general merchandise and various other peripheral

departments.

3.3.2. B. i) Conventional Supermarkets

Conventional supermarkets are essentially large department stores that

specialize in food. According to the Food Marketing Institute, a conventional

supermarket is a self-service food store that generates an annual sales volume of

$2 million or more8. These stores generally carry grocery, meat, and produce

products. One benefit that accompanied the development of supermarkets was

increased Impulse buying. Impulse purchases are those that haven’t been planned.

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Shoppers at conventional supermarkets generally prepare a list of items needed for

their households. While in the supermarket, however, they may find some

tempting items that weren't on the list and may purchase them on the spot, or by

impulse. The key to successful supermarket sales is high inventory turnover.

Because supermarkets have a great deal of competition from convenience

stores, warehouse stores, and superstores, they must develop an effective strategy

to keep their customers coming back.

3.3.2.B. ii) Superstores

One of the biggest trends over the past twenty years in food retailing has been the

development of superstores. Superstores are food-based retailers that are larger

than the traditional supermarket and carry expanded service, bakery, seafood, and

nonfood sections. Superstores vary in size but can be as large as 150,000 square

feet. Generally they are no smaller than 20,000 square feet. Typical stores run

80,000 to 130,000 square feet and carry more than 60,000 products, compared to

an average of 40,000 products for supermarkets9. Typically included are bakeries,

ready-to-cook meat and seafood entree sections, international foods, photo labs,

floral shops, and a fun centre for kids to play in while their parents shop.

3.3.2.B. iii) Combination Stores

Because shoppers have been demanding more convenience in their shopping

experiences, a new type of food retailer has been emerging, called a combination

store, this type of retailer combines food items with nonfood items to create a one-

stop shopping experience for the customer. In general, customers can find general

merchandise along with food products and can take all these products to a common

checkout area. Combination stores can be as large as 100,000 or more square feet.

3.3.2.B. iv) Super Centers and Hypermarkets

A super centre is a combination of a superstore and a discount store. Super centers

developed based on the European hypermarket, an extremely large retailing

facility that offers many types of products in addition to foods. In super centers,

more than 40 percent of sales come from nonfood items. Super centers are the

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every 5 minutes, a mobile handset every 8 minutes and a car every 9 hours11. The

number of Internet users in India is estimated at four million. These users are young,

well-educated males with a monthly income of over Rs 15,000 and are concentrated

in the top 10-20 class ‘A’ cities. Internet retailing had a positive impact on the

economy of the nation in particular and the world at large. In India, it will be a

mixture of e-tailing and retailing that will work. With time, companies are

working hard on reaching out to their consumers with the help of Internet. It helps

prospective customers to acquire information about the offers or retailers at minimal

cost in terms of traveling time and cost involved. The capital and labour devoted

to stores, salespersons, inventories, etc. are freed up for other productive

applications in the economy.

Internet retailing appeals to marketers and retailers on account of the following

factors:

(i) Internet retailers can avoid expensive capital investment on stores and in store

fittings, sales persons, and inventory holding costs,

(ii) Internet retailers depend on IT integration from their store-front to order

3.4. 4) Catalogue and Direct Mail Retailing

It is a form of non-store retailing in which retail units communicate about their

merchandise or service through a catalogue. This retail format is new to Indian

retail industry and is at a very nascent stage of its development. In the West,

catalogue retailing became popular among marketers and retailers to tap rural

markets, which lacked access to the retail centre/stores. Later with the

emergence of the double-income families with limited time at their disposal,

catalogue retailing proved quite successful. Direct mail retailing is a non-store

retail format in which retailers communicate with their customers using

mails/letters or brochures. Retailers directly mail advertising material to their

existing or potential customers with the objective of selling goods or services.

Catalogue retailing is classified into two, namely general merchandise-

catalogue and Speciality-catalogue retailing. General merchandise catalogue

offers a wide variety of merchandise that is periodically mailed to the customers

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3.4. 5) Direct Selling

It is a retail format which involves personal contact between salesperson/ retailer

and customers at any convenient place, be it his home, office, or club. It also

includes the phone interactions between retailers and customers.

3.4. 6) Television Shopping

It is a retail format in which existing and prospective customers watch a TV program

demonstrating products and then placing order for the same by telephone, e-mail

Internet. There are three types of television shopping, namely cable channels meant

for shopping, infomercials, and direct-response advertising shown on TV.

Infomercials are TV program that mix entertainment with product demonstrations

and then interested customers place orders by telephone or e-mail. However, direct-

response advertising includes, advertisements on TV that provide details about

merchandise and an opportunity to order. The Indian TV retailing is estimated at

Rs 50 crores, with an annual growth rate of 20%. The key players in the Indian

market are Asian Sky Shop (ASK), TSN, TVC, TSNM, Telebrands (India), and

Star Wamaco, the last one being an international player. ASK and TSN are Rs 20

crores companies each, with the balance Rs 10 crores being shared by other players

in the market12.

3.4. 7) Vending Machine Retailing

It is a form of non-store retailing in which products or services are placed in a

machine and dispensed to customers when they deposit cash or use plastic

money (credit or debit card). Vending machines are found everywhere; compared to

store retailing, vending machines offer consumers greater convenience 24 hours a day,

and have replaced many services formally requiring a human interface. Vending

machines offer everything including; cigars, postcards, stamps, etc. The

expensive equipment and labour required to stock and service vending machines

makes this a costly channel of distribution, and prices of vended goods are often 15-

20 % higher than those in retail stores.

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buying pattern include - market size and growth, sales cyclically and seasonality.

Market size (large, growing, mature markets etc.) will be an indicator of whether the

retailer will be able to generate revenues to cover his investments. The competitive

factors affecting retail markets include barriers to entry (due to scale economies,

customer loyalty and availability of locations), bargaining power of vendors and

level of competitive rivalry. The environmental factors affecting the retail market

includes the technological, economic, regulatory and social changes which can affect

the market’s attractiveness.

While performing the situation audit, the retailer will have to do a self analysis in

terms of - management capability, financial resources, operative strengths,

merchandise capabilities, store management capabilities, location strength, loyal

customers etc. in order to determine the potential areas for developing competitive

advantage.

Step 3: Identify Strategic Opportunities

After doing the situation audit, the retailer will have to identify strategic

opportunities for increasing retail sales. These could include growth strategies for

the retailer such as, market penetration, market expansion, diversification strategy

etc.

Step 4: Evaluate Strategic Opportunities

Once the situation audit is done, the next step involves making an evaluation of the

opportunities in order to determine the retailers’ potential to build up a sustainable

competitive advantage and reap long term benefits. Typically, evaluating strategic

opportunities call for looking into market attractiveness and the strengths and

weaknesses of the retailer. Such an evaluation will enable the retailer to make proper

investments looking to the market opportunities and then build up a strong

competitive position.

Step 5: Establish Specific Objectives and Allocate Resources

The retailer’s overall objective is included in the mission statement. The specific

objectives are goals against which progress towards achieving the overall objective

can be measured. The specific objectives include three components:

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• The performance sought in terms of a numerical index against which

progress can be measured.

• The time period within which goal is to be achieved.

• The level of investment required to achieve the objective.

The performance will be measured by looking into the return on investment, sales or

profits.

Step 6: Develop a Retail Mix to Implement Strategy

The sixth step in the strategic retail process involves developing a retail mix for the

strategic opportunity in which investment will be made and to control and evaluate

the performance. The retail mix will include planning merchandise assortments,

buying systems and merchandise, planning the retail communication mix and

customer service, store management, visual design and merchandising etc.

Step 7: Evaluate Performance and Make Adjustments

The final step in the planning process relates to evaluating the results of the

strategy and implementation program. Evaluating the strategy and

implementation program will reveal whether the retailer is meeting or not the

objectives set. If the objectives are being met, changes are not required. But if the

retailer fails to meet the objectives, a reanalysis is done to review the

implementation programs and if necessary a new situation audit is worked out.

3.8 Retail Market Strategy

Today, the emergence of new retailing formats, advancements in the field of

technology and increase in consumer awareness and needs is making retail

competition more intense and also forcing retailers to devote more attention towards

working out the long-term retail market strategy. The retail market strategy will

provide an insight to retailers on how to deal with the market environment,

customers and competition. The retail structure is a mix of both organised and

informal retailing. It becomes more challenging for the organised sector to stand out

and woo customers through unique product offerings. Through a strategic approach,

the retailer works at positioning his product/service offerings in the market with its

unique image, price and quality features.

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competitively priced. Further, the store's image builds a certain level of confidence

and trust within the customer which can lead to an increase in customer base.

3.9.1.7 Vendor Management

When retailers have good relations with vendors it helps:

• To procure merchandise to be sold in a particular region.

• To enter into some special terms of purchase with vendors due to strong

relations with them.

• To receive fast moving merchandise even with short notice or receive those

merchandise, which are in short supply.

Good relations with vendors are built over a period of time and are always beneficial

for the retailer. Today while operating in a competitive environment, timely

deliveries and-quality of merchandise are major concerns. They need to go for

backward integration i.e., manage and plan production so as to work out a

sustainable model with higher quality compliance and lower mind-to-market time.

Now, retailers are making use of Retail Managed Production Planning (RMPP)

system, which offers a sustainable solution for partnering with the vendors in order

to achieve the long-term objectives of better quality and lower lead times.

3.9.1.8 Customer Service

On the one hand, retailing in India is still in its nascent stage and they are trying to

offer merchandise to satisfy the rising aspirations of the lifestyles of the Indian

households. On the other hand there also exists the local and unorganized retailing

format in India, who is finding it difficult to match the growing demand of the same

higher middle class with high disposable income. Nevertheless, all types of retailers

have realised that good customers can be attracted only be offering good customer

service. The customer services offered by some well-known retailers like Reliance

Infocomm, Bharat Sanchar Nigam Ltd (BSNL), Food World etc. include drop boxes

for cheques and credit cards, proximity, good ambience, new and certified products

and so on. There are retailers like Food Bazaar, Food World, Kemp (Bangalore) etc.

offering candy or popcorn vending machines, food courts, good seating arrangement

where customers can relax and shop at leisure. The layout of the stores and mall are

made consumer friendly to ensure that consumers are able to shop with comfort and

purchase fresh and quality products.

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3.9.1.9 Build Multiple Sources of Advantage

Retailers make use of a combination of approaches or parameters to build up

sustainable advantage. Generally a mix of various factors such as good products and

services, attentive sales personnel, physical store appeal, good vendor management,

suitable locations and so on can result in a successful retail venture. For, a satisfied

customer is likely to visit the store more often and also recommend it to others. The

net result will be a healthy bottom-line in which both customers and the retailer

benefit mutually.

Organised retailer, Shoppers Stop when it opened shop in Mumbai apart from

focusing on variety of (fashion) designer wear, at affordable prices, good vendor

management (prefers outright purchase leveraging on the designers’ confidence) and

ideal location also has a First Citizen’s club for frequent shoppers (loyal customers).

Every time a First Citizen’s club member makes a purchase, he notches up a number

of redeemable points. The first citizen also enjoys other benefits such as free parking;

a member only queue for at the cash counter and a few hours of exclusive shopping

for club members at festival time. Such programs are mutually beneficial for both -

customers and retailers. This is because profitable customer service provides added

value, tangibly and intangibly to the customers and also enables the company to

make profit at the same time

3.10 Implementing the retail strategy

3.10.1 Organizing structure and Training

The first decision by retailer is to clearly define the structure of the organisation

that would facilitate implementation of all the tasks. This will involve exactly

pinpointing who is responsible for each job and to whom each individual would

report to. The structure of small independent retailers is simple, even though they

perform almost the same functions as the large chain store retailers. Since a small

store has few employees, there is little scope for specialization and most staff

needs to be multi-skilled in which each employee may have to perform several

functions. However as the store expands, there is more opportunity for

specialization and departmentalization.

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only gives the store an appealing look but also imparts and attractive fragrance that

could go a long way in motivating customers to spend a longer time in the store

which would hopefully materialize into some concrete purchases.

3.10.7 Communication Strategy

The final part of the retail strategy involves implementation of the communication

strategy of the company. The company must be able to communicate to its target

clientele very clearly its prime USPs over its competitors and what it wishes to

offer. If a retailer wishes to operate a discount store format, he must effectively

communicate his lower prices to his target clientele, while if a department store

operator has larger variety and greater choice.The pricing policy of the company as

well as the depth and the breadth of the product mix must be decided prior to this.

3.11 Manufactured Brands

Manufactured brands are products that are designed and marketed by the

manufacturer himself or through his authorized distributors. The manufacturer’s

prime responsibility is to develop the product and establish an image for the

brand. In some cases, the manufacturers use their own brand name for the name

of the product, while others prefer to treat a product as a separate brand

altogether. For example, Kellogg’s corn flakes use its own name for its products,

whereas Procter and Gamble does not use its name for any of its products.

3.12 Private Labels

Private label is the term used to signify the brands which are developed by the

retailer himself. The process of developing such products is known as ‘backward

integration’. In other words, when a retailer expands his operations into

backward integration for some products, wherein he also develops the products

that he sells from his stores, the end-products are called private label items. Such

items may or lay not be developed within a unit or subsidiary of the same retail

company. For example, a retailer may also decide to outsource the production,

development and/or packaging for his private label items to extremely reliable

74

third parties. Many retailers around the world prefer this option. Typically,

retailers develop specifications for the merchandise and then contract the

production of the same to vendors with prior experience of manufacturing the

same products.

Private label items are usually sold exclusively at the retailer’s outlets only.

Deciding which products must be developed under the private label is a crucial

decision for every retailer though it is important to generate large volumes of the

product to be able to justify the private label. Even the strategies adopted for

allotting the brand name to private label items are quite diverse throughout the

world. While some retailers prefer to retain the same name as that of their stores,

others prefer to use a separate name altogether. Such decisions involve intense

thought on the part of the retailer as each strategy has its own advantages and

limitations.

It is rather intriguing that while some retailers aggressively adopt private labels,

others running operations of a similar magnitude prefer to remain rather passive

in this regard. Although even independent retailers have managed to create a few

fast moving private label items, it is a fact that unless large volumes are assured

from a chain of stores, a retailer may not be able to develop many private label

products. Offering private labels provides a number of benefits to the retailers.

Given below are some of the advantages and limitations of developing private

label brands.

3.12.1 Advantages of Private Labels

3.12.1.1 Greater Profits

Since private label items are the retail company’s own products, selling them

helps save almost entirely the profits of most of the intermediaries, i.e. the

manufacturer as well as the distributors, which are usually quite substantial.

Apart from this, the retailer is also free to decide his own pricing policy and

hence enjoys much greater flexibility in marketing the products.

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is a major comparative advantage of unorganized outlets. Unorganized retailers

have significant competitive strengths that include consumer goodwill, credit

sales and amenability to bargaining, ability to sell loose items, convenient

timings, and home delivery.

It is feared that organized retailing will eliminate the traditional retailers. But they

would continue to exist and will not be seriously affected because organized

retailing is developing its own distinctive market. New market equilibrium will

be achieved where both organized and unorganized retailers will be able to thrive.

The market size is too expanding giving enough scope for all. Besides giving

long term relationships, small stores give additionally goods on credit and home

delivery. They are reaching to their price sensitive customers with attractive

deals. Corner store has become smart and giving value added services. There is

competitive response from traditional retailers who are gearing up to meet the

threat from organized retailers.

The size of opportunity is very large and neither the foreign nor the domestic are

the threat to unorganized stores. They have their own USP in terms of

convenience due to their proximity, personalized service and deep understanding

of their customer’s behaviour and lifestyle. Those who adapt and improve will

survive and grow. Small retailers can also form co-operatives or associations to

avail advantage of bulk purchase which facilitates fewer prices. They can directly

procure from suppliers or farmers. With some changes in policies and practices,

traditional retailing can overcome adverse impact on modern retailing.

79

References:

1. Nicolas Alexander (2005)- International Retailing, Oxford University

Press

2. Newman Andrew, Peter Cullen (2006) - Retailing: Environment and

Operations, Thompson Publication.

3. Gilbert David ( 2005) - International Retailing, Prentice Hall

4. Barry Barman, Evans Joel R. - Retail Management ( 2007) – A strategic

Approach, Prentice Hall, 10th edition.

5. Lamba A.J. (2008) - The art of Retailing, Tata McGraw-Hill Publication.

6. Jain J.N., P.P. Singh (2007) - Modern Retail Management, Deep & Deep

Publication Pvt. Ltd.


8. Gupta S.L. (2007) – Retail Management: An Indian Perspective, Wisdom

Publication

9. A. Shivkumar (2007) - Retail Marketing, Excel Books.

10. Lucas, Bush, Gresham (1994) - Retail Management, Macmillan

Publishing Company.

11. Pradhan Swapna (2009) - Retailing Management: Text & Cases, 3rd

edition, Tata McGraw – Hill, Nesw Delhi.

12. Sinha Raj (2008) - Retail and Trade Management, Mohit Publications.

13. Impact of Organized Retailing on Unorganized Sector, ICRIER Working

Paper No. 222 (2008)

14. Valsamma Anthony (2009) - Small Retail Stores thrive on Customer

relations – An Empirical Study, Marketing Mastermind, Feb,68-70

80

but disappeared almost throughout the world. And in its place we find the more

refined self-service ‘cash-and-carry’ organised retail stores in the form of

supermarkets, department stores, shopping malls and the like. These stores

signified the beginning of ‘organised retailing’ and its evolution across the

world. This new breed of organised retailers have their shelves neatly stacked

with a huge variety of products which include anything from cans, packed food,

bread, dairy products, fresh meat and fish, apparel, shoes, furniture or any

conceivable item one can think of. This phenomenon of new found modern

supermarkets, department stores is in sharp contrast to the old and orthodox

grocery stores that had hitherto existed.

Thus, this is the story of a revolution - a revolution in the shopping habits of the

people across the entire world, which has virtually brought the supermarket to

the main street. This revolution is unparalleled in human history as it has

engendered the development of a distribution system that delivers food and

other products to the consumer in unprecedented abundance, variety and quality.

Retailing was never as it is seen today. It has gone through its natural process of

evolution in all areas from the initial concept of the supermarket and

department store to the shopping mall as it exists today.

It is believed that the first true department store in the world was founded in

Paris in 1852 by Aristide Boucicaut and was named Bori Marche. At that point

of t ime, the department store business was a bare-bones operation. It was

only after World War II that retailers in the West began to upgrade their

services, facilities and merchandise selection to offer a fascinating array of

additional benefits to consumers through organised retailing.

In the early part of the twentieth century, the American housewife, while shop-

ping for her family’s dinner, bought meat at one store, groceries at another, and

fruits and vegetables at still another. It was back then that chain stores which

existed such as the Great Atlantic and Pacific Tea Company (now known as the

‘A&P’ chain of stores) started introducing new methods of food selling. Because

83

they did large volumes of business, these chain stores could stock larger

quantities of a greater variety of products and afford to sell them at lower

prices. Soon these chain stores too began to sell meat, fruits, vegetables and

dairy products all under one roof and housewives liked this idea of one-stop

shopping.

In order to reduce business expenses and compete with chain store prices, some

of the smaller merchants too were compelled to open self-service stores of their

own. Initially the emphasis in these stores was only on price competitiveness

and little attention was given to making the stores attractive. Even empty garages

or ware houses were often used for the purpose. The supermarket revolution was

first sparked off in the 1920s, and by the 1950s it had won acclaim almost

throughout America.

In the 1920s, one could not even dream of retailing as it exists today. One could

never have imagined that from their humble beginnings, supermarkets in the

West would evolve into their present form. Initially, many items used to come in

bulk and were sold as it is at the retail outlets. Potatoes were sold from barrels

and later from 100 pound sacks, while sugar was sold from 100-pound sacks and

butter in tubs. The average grocery store was originally very small and expanded

only with the passage of time. The retailers were keen to acquire the know-how

to upgrade their quality and service for the consumers and to develop the best

stores possible. They all learnt a little from each other - many retailers thus

became business friends and some even became family friends. By the late

1950s, about 40 per cent of the American population was buying its groceries

from these organised retail stores4.

In America, the owners of these stores finally got together to form an association

which ultimately contributed a great deal in the development of modern retailing.

There were, among them, men with vision and determination who spoke

aggressively in seminars and conventions which were attended not only by

retailers but also by wholesalers, suppliers and even manufacturers. They soon

84

Straus. Similar developments were under way in London (with Whiteleys), in

Paris (with La Samaritaine) and in Chicago, where department stores sprang up

along State Street, notably Marshall Field and Company, which remains the

second-largest store in the world (after Macy’s). In 1877, Wanamaker’s opened

in Philadelphia. Philadelphia’s John Wanamaker performed a 19th century

redevelopment to the former Pennsylvania Railroad terminal in that city and

eventually opened a modern day department store in the building.

On March 1, 1869 Zion’s Cooperative Mercantile Institution was opened in Salt

Lake City as a new community store that became the first incorporated

department store in America in 1870. A new 3-storey brick and iron store was

built in 1876, noted for its unique architecture and striped awnings. This store

was replaced by an enclosed shopping centre in 1973, and the new Zion

department store preserved the gilt-edged ornate facade of the old store. In 1999

the May Department Stores bought a 14-store ZCMI chain and changed its name

to “Meier and Frank”, a May property with eight stores in Oregon and

Washington. Subsequently May Department Stores completed a merger with

Federated Department Stores and the Meier and Frank brand ZCMI stores have

become Mac/s stores, effective late 2006.

In 1881, Joseph Lowthian Hudson opened a small men’s clothing store in

Detroit. After 10 years he had 8 stores in the midwest and was the most profitable

clothing retailer in the country. In 1893 he began construction of the immense

department store at Gratiot and Fanner streets in Detroit. The 25-storey tower

was added in 1928, and a 12-storey addition in 1946, giving the entire complex

49 acres of floor space.

In 1954 the company became a suburban shopping centre pioneer when it built

Northland 13 miles northwest of Detroit. In 1969 it merged with the Dayton

Corporation to create Dayton-Hudson headquartered in Minneapolis. George

Dayton had founded his Dayton’s Daylight store in Minneapolis in 1902 and the

AMC cooperative in 1912, built the Southdale Shopping Centre in 1956, and

started the Target discount store chain in 1962. The new corporation closed the

88

flagship Hudson department store in downtown Detroit in 1983, but expanded

its other retail operations. It acquired Mervyn’s in 1978, Marshall Field’s in

1990, and renamed itself the Target Corporation in 2000.

By 1890 a new world of retailing had been created as department stores had a

clear market position as universal providers. General stores eventually became

department stores as small towns became cities. The most prominent department

stores emerged from small shops. The department store created several of North

America's first large businesses. The department store is also largely responsible

for the standard store design seen today; because of its size it required new

building materials, glass technology and new heating, amongst other architectural

.innovations. The store layouts made shopping easier for consumers regardless of

their social or economic background. The department store also offered new

customer services never before seen such as restaurants, restrooms, reading

rooms, home delivery, wrapping services, store hours, bridal registries, and new

types of merchandise displays.

Some department stores leased space to individual merchants, similar to the

changes in late 17th-century London, but by 1900 the smaller merchants were

purchased or eventually replaced by the larger companies. In this way they were

very similar to our modern malls, where the property owner has no direct interest

in the actual department store itself, other than to collect rent and provide

utilities. Today only the most specialised departments are leased out, such as

photography, photo finishing, automotive services or financial services.

However, today this is rare, as most departments - even a store’s restaurant - are

usually run by the store itself.

Before the 1950s, the department store held an eminent place in both Canada and

Australia, during both the Great Depression and World War II. Since then, they

have suffered from strong competition from specialist stores. Most recently the

competition has intensified with the advent of larger-scale superstores. Following

World War II, a number of retail establishments in the United States began to

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branded the former Switzer stores in Cork (formerly Cash’s), Limerick (formerly

Todd’s) and Galway (formerly Moon’s). There are also many self-owned

department stores around the country, especially in rural towns. The British

department store, Debenhams, has a Dublin city centre site within the Jervis

Centre. The opening of the Dundrum Shopping Centre in Dublin's suburbs saw the

arrival of two more British stores: House of Fraser and Harvey Nichols.

4.4.8 Japan: Some of the largest department stores in Japan include Daimaru,

Hankyu, Hanshin, Isetan, Marui, Matsuzakaya, Matsuya, Mitsukoshi, Printemps

Ginza, Seibu, Sogo, Takashimaya, Tobu and Tokyu. Many are owned and

operated in conjunction with private railway companies.

4.4.9 Germany: In Germany there are a number of department stores. There

are two big department store companies, Karstadt Quelle (Karstadt and Hertie)

and Kaufhof (part of the Metro AG). There are also some smaller independent

department stores. Some department stores only sell clothing. The biggest clothing

department store chain is C&A. Larger department stores in Germany usually

contain a self-service restaurant, clothing departments, a toy department, a

department for computer and electronics, a small book department (for bestsellers),

a department for newspapers and magazines and a food department (like a

supermarket).One of the most famous department stores in Germany is the

Kaufhaus des Westens (German for department store of the west) which is located

in Berlin.

4.4.10 Malaysia: Since the 1980s, Malaysia has opened its doors to many foreign

chains, such as Tesco, Carrefour, Aeon (Jusco), Makro Sogo, Parkson, etc. All of these

foreign stores must join venture; with local partners. Many of home grown

department store chains include Giant, Metrojaya, Cold Storage, Sunshine

(SuiWah), The Store, Kamdar, Mydin, etc.

4.4.11 Mexico: Mexico has a number of department stores, many coming

from other countries, such as the United States. However, some Mexican

department stores exist and serve different income levels. Examples include

Sears Mexico, Liverpool and El Palacio de Hierro.

4.4.12 Panama: Panama's first department stores such as Bazaar Frances, La

Dalia and La Villa de Paris started as textile retailers at the turn of the

nineteenth century. Later on in the twentieth century these eventually gave

93

way to stores such as Felix B. Maduro, Sarah Panama, Figali, Dante, Sears,

Gran Morrison and smaller ones such as Bon Bini, Cocos, El Lider, Piccolo

and Clubman among others. Of these only Felix B. Maduro (usually referred

to as Felix by locals) and Dante remain strong. All the others have either

folded or declined although Cocos have managed to secure a good position in

the market. Today major department stores aside from these two include

Steven's and Collin’s. There are also many discount department stores such as

Conway, La Onda, Dorian’s, Saks, Madison Store and El Titan among others.

4.4.13 Netherlands: The most well-known department stores in The

Netherlands are Metz & Co, De Bijenkorf, Vroom and Dreesmann and

HEMA.

4.4.14 Thailand: The most popular department stores in Thailand are Central

Department Store which managed by Central Group. These are the list of

department stores in Thailand

• Central Department Store - has 20 branches (2007)

• The Mall - has 6 branches (2007)

• Robinson Department Store has 19 branches (2007)

• Zen Department Store has 1 branches (2007)

4.4.15 Russia: Arguably the most famous Department store in Russia is the

GUM in Moscow or the Petrovsky Passage. In Saint Petersburg there is The

Passage extremely popular.

4.4.16 Singapore: Most department stores are clustered around Orchard Road

in Singapore. The most well-known department stores in Singapore are

BHG- Formally known as Seiyu, Isetan, John Little, Marks and Spencer,

Metro, OG, Robinson and Co., Takashimaya, Tangs, etc. They can also be

found in some sub-urbs shopping malls.

4.4.17 South Korea: Most famous department stores are Shinsegae, Hyundai,

and Lotte. Shinsegae, which opened in 1930 as Mitsukoshi Gyeongseong store,

is oldest department store chain. Shinsegae, Lotte Department Store, and GS

Group has discount stores. Carrefour and Wal-Mart sells its all stores to E-

Land and Shinsegae.

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with just three stores opened by 1997. This probably had a role in Wal-Mart

experimenting with a smaller format called ‘Todo Dia’, which stocked just

12,000 items. It was an attempt to cater to a completely different income

segment. This is a strategy similar to the strategy it followed in Mexico, where it

is the market leader and operates in six retail formats.

4.5.2 China:

China has gradually opened up retailing to 100 percent FDI in the last 10 years.

Bailian is China’s biggest retailer and its largest domestic retail player. Created in

April 2003 by merging the parent companies of Hualian Supermarket, Lianhua

Supermarket, Hualian Department Store, and Shanghai No 1 Department Store,

Bailian is now a veritable giant in China’s retailing landscape. Acquisitions have

been Bailian’s strategy to gain a significant share of China’s chronically

fragmented retail market. Even after the consolidation activities, Bailian’s 2004

sales of US$ 8.16 million represented just over one percent of national retail

sales. Bailian has a major consolidation task on its hands – in store format,

branding and management – in its plans to leverage its size effectively.

Hong Kong listed Gome Electrical Appliances Holdings Ltd is China’s largest

retailer of consumer electronics, and was on the top ten listed private companies

in China in 2005. Yet even Gome, the market leader has just a 5 percent market

share in this segment. Aggressive expansion plans: In March 2005, the company

announced plans to double its retail presence in China.

Tesco, the UK’s largest food retailer finally moved into China’s grocery market

in 2004. Having evaluated the market for over three years, it finally entered

China through the acquisition of a 50 percent stake in Hymall, owned by a

Taiwanese food processor and retail, which owns 25 hypermarkets on the

mainland in a US$ 260 million transaction. Tesco is entering the arena against

global rivals such as Wal-Mart, Carrefour and Metro in addition to Bailian. Yet,

for all the competition, Tesco’s timing may be just about right. For a start, the

company can take advantage of the growing popularity among Chinese

consumers for modern trading practices – particularly hypermarkets. More

importantly, with China just having opened its retail market in December 2004 in

line with its obligation as a member of the WTO, Tesco is now free to decide on

its expansion unencumbered by restrictive regulations.

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4.5.3 UK and Europe A number of structural changes in the retail environment have become evident

during the post-war era. These developments have occurred throughout Europe,

although they are apparent to differing extents in different markets. Three

fundamental related transitions have occurred in the European retail

environment: first, the balance of power has shifted along the distribution channel

from the manufacturers to the retailers; secondly, traditional independent retailers

and co-operatives have lost market share to multiple chain organizations and

thirdly, markets have become increasingly consolidated and concentrated. The

second point above is reinforced by Hollinger (1998), who identified that the

Co-op had fifty mutual retail societies, of which the fifteen largest accounted for

more than 90 per cent of the movement’s trade. In fact in 1985 the Co- operative

movement as a whole could boast that it was the UK’s leading grocery retailer,

as well as a banker, insurance provider, funeral services group and agricultural

operator. The Co-op business allowed its competitors such as Tesco, J. Sainsbury,

ASDA and Safeway to invest heavily in store development, delivering a consistent

product range to customers while the Co-op’s individual societies were left to

languish.

It is believed that globally, retail management (in the initial period) followed a

passive supply led approach, i.e., markets were assumed to exist and the retailer

was only required to provide an acceptable outlet to enable the consumer to

make purchases. In the initial stages of retailing, there was minimal branding

and competitive advantage was obtained by creating efficiencies in operational

costs. The changes occurring in the economic scenario helped in the inception of

the Disneyland Theme park concept. Similarly, McDonald management was

able to open their first fast food outlet in the USA in 1955. Subsequently, there

were some important factors which prompted retailers and manufacturers to

work closely in order to satisfy the needs of the consumers. These factors are:

(a) An increase in demand (or oversupply of retail outlets) to serve similar

markets, coupled with the risks associated with the market place, has prompted

retailers to make better use of marketing to survive at the market place.

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4.7 Successful Global Retailer ‘Wal-Mart’

Wal-Mart, a name we are all familiar with even in India, is not just a retailer but

truly an institution of its own. The hitherto American retail giant is undoubtedly

the largest and the most successful retail company the world has ever witnessed.

In 2002 for the first time in its history it has been declared the largest

organisation in the world according to Fortune with a turnover of US$ 220 billion

beating Exxon Mobil and all other conglomerates globally. The company

currently has over 1900 Wal-Mart stores and 565 Wal-Mart super centers apart

from the over 450 Sam's Club Warehouse Stores and even this number has been

rapidly increasing at the rate of almost one new store every day in some location

of the world. Sam Walton, the founder of Wal-Mart was declared the richest man

in America in 1985 and even to this day, long after his death, the rest of the

Walton family are stated to be among the 10 wealthiest families in the world. It is

believed that they have created over US$ 20 billion of family wealth within the

last 40 years only since the inception of the company. In fact, according to some

studies they are considered second only to Bill Gates, and their total accumulated

wealth is believed to be much more than even what the Rockefellers and the

Fords had during their times.

However, the real wealth that Sam Walton truly created was the wealth of his

highly motivated workforce whom he termed as his associates. His commitment

to providing his customers greater value for money and his philosophy of

partnership still remain the cornerstones of the success of Wal-Mart even after

his death. What is most intriguing is the fact that while there were many chain

store retailers operating for much longer periods of time, Wal-Mart which started

with only one store about 40 years ago, has now become the world’s largest

retailer with over 3000 stores, and an annual sales of over US$ 137 billion and

900,000 employees who are treated as partners of the company9.

Although the young Sam Walton did a brief stint as an army officer, his retailing

career commenced only as a management trainee at J C Penny in 1940 where he

started at a salary of US$ 45 per month. It was only in 1945 that Sam actually

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ventured out on his own for the first time in his life by buying a ‘Ben Franklin’

variety store franchise in Newport, Arkansas. When his landlord refused to

renew his lease in 1950, Walton re-located to Bentonville, Arkansas and opened

a ‘Walton 5 & 10’. The location still remains the corporate headquarters of Wal-

Mart Inc, in spite of the company becoming the largest retailer in the world

today. By 1962, Walton’s business had grown to five stores, by which time Wal-

Mart had created a firm corporate strategy to offer branded merchandise at

discounted prices to small communities. Walton truly believed that the key to

success was people: his customers and his employees (called ‘associates,’ a term

adopted from his initial job at Penny).

Sam Walton died in 1992, but his spirit and ideas remain a driving force at Wal-

Mart even today. With annual sales of over US$ 200 billion, Wal-Mart is today

the largest retail merchant on the planet. The Company has always believed in

providing quality merchandise at the lowest possible retail prices and this

philosophy has till this day been the secret of its unprecedented success. In fact

Wal-Mart’s competitors have always been baffled by how the company is able to

maintain its high standards of service and facilities, and still be able to offer the

most competitive prices. The tremendous effect that this policy of Wal-Mart had

on the retail industry at large is evident from the now very famous lawsuit, which

was initiated against the retail giant. The suit was related to charges against Wal-

Mart for deliberately engaging in price-cutting to drive the smaller competitors

out of business. However, after a very long and tiring round of litigation which

lasted a couple of years, the Arkansas Supreme Court finally ruled in favour of

Wal-Mart. It held that the cost benefit to the public at large on account of

superior technology was in no way an indication of unfair trade practices.

However, despite its aggressiveness and phenomenal success in the domestic

market, Wal-Mart as a company had never been as aggressive as some of its

competitors in terms of overseas expansion. However, the company’s policy in

this regard has lately seen a drastic change and a far more aggressive approach in

this area in the more recent past. In fact so aggressive has been its entry into

some of the overseas markets that it has often given the impression of being a

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With these huge attractive infrastructures, organized retailers create environment

which boosts shopping activity. Modern retail Business focuses on ‘One stop

shopping model’ by expanding product assortment and enhancing store

ambience. Share of organized retail to total market is given in following table.

Table 4.5 : Share of Organized Retail to Total Market

Retail Segment 2004 2005 2006 2007

Clothing, Textiles & Fashion

Accessories

13.6% 15.8% 18.9% 22.7%

Jewellery 2.0% 2.3% 2.8% 3.3%

Watches 39.6% 43.5% 45.6% 48.9%

Footwear 25.0% 30.3% 37.8% 48.4%

Health & Beauty Care Services 6.0% 7.6% 10.6% 14.3%

Pharmaceuticals 1.8% 2.2% 2.6% 3.2%

Consumer Durables, Home Appliances 7.8% 8.8% 10.4% 12.3%

Mobile handsets. Accessories &

Services

6.5% 7.0% 8.0% 9.9%

Furnishings – Home & Office 6.7% 7.6% 9.1% 11.0%

Food & Grocery 0.5% 0.6% 0.8% 1.1%

Out-of-Home Food (Catering) Services 5.7% 5.8% 6.9% 8.0%

Books, Music & Gifts 9.8% 11.7% 12.6% 13.4%

Entertainment 2.6% 3.3% 4.1% 5.3%

(Source: Images F & R Research (2006))

4.10 Structure of the Indian Market

India's population of more than 1 billion may at first glance seem like a

tremendous opportunity for retailers, but in reality, it has become their biggest

nightmare. Not only does the uncontrollable population pose innumerable

problems, its disproportionate density also aggravates the situation. The

population of China, at approximately 1.2 billion, is only about 20 per cent

higher than that of India while its size approximately 300 per cent more than that

of India. Apart from its uncontrollable population, it is the high density of

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population and the unplanned expansion of its important towns and cities that

pose numerous problems in India today.

Table 4.6 Population and Proportion of Total Retail Market

City Type Population in

crores

Population of total retail market

( % )

2001 2025 2004 2010 2015 2025

Metroes, Mini Metros and

Cities

6.7 13 15 18 20 28

Top Cities, Population > 1

million ( 27 cities )

3.7 7.2 6 6 7 10

Large Cities Population 0.5

to 1 million ( 32 cities )

2.4 4.5 2 3 3 4

Rest of India 5500 towns +

6 lakh Villages

87.4 115.3 77 73 69 57

( Source : NCAER, CSSO TSMG Analysis (2006))

The social infrastructure in the country too is deficient and has not been

developed in an organised manner either. Since retailing is an integral part of the

social infrastructure of any country, the haphazard growth of the social

infrastructure in India has caused the Indian retail market to grow in a highly

fragmented manner over the last five decades. There are presently over four

million retail outlets in India's approximately 5500 urban markets and over

5,00,000 villages. While there has been virtually no development of organised

retailing, the retailing scenario in the villages has been even more depressing

due to various factors. The lack of proper roads, poor basic infrastructure and

transport system have all contributed to this situation and very little effort is

being made to improve matters in this area.

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city will reduce the catchments population of an outlet, thus increasing the

density of occurrence. Delhi and Bangalore fall in the latter category.

Towns with lower income and higher unemployment trends would give rise to

fragmentation of the retail universe resulting in a large number of small outlets.

Calcutta, Howrah, Patna and Guwahati are some apt examples of such

fragmentation. The composition of the retail universe in India is also quite

diverse. As is evident from the tables given above, grocers account for the largest

block of 32 per cent of the total retail outlets while the tiny paan stores have

emerged as the second largest block accounting for about 15 %.

Table 4.12: Structure of the Indian Market

Year 1994 - 95 2000 – 01 2005 – 06

Destitutes 35 % 24 % 17 %

Aspirants 48 % 32 % 33 %

Climbers 48 % 66 % 78 %

Consuming Class 29 % 55% 75 %

Very Rich 1 % 3 % 6 %

(Source: Business India Projections Based on NCAER Research Published in Nov. 1997)

Table 4 13: Segregation of Income Groups

Monthly Household Income (‘000)

Number of individuals in Urban Area ( millions )

Number of individuals in Rural Area ( millions )

10 to 15 14 19

15 to 30 16.3 6.2

30 to 50 3.9 1.4

50 to 125 3.4 0.9

Above 125 1.7 0.2

(Source: Business India Projections Based on NCAER Research Published in Nov. 1997)

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The future of the retail industry in India thus rests entirely in the hands of the

retail community itself which should have no expectations from the government.

While most retailers, especially supermarkets, around the world are considered to

be a crucial part of the social infrastructure, India has still not woken up to this

reality nor given the retail sector the importance and impetus it deserves.

Retailing in India remains just the same as it has been for several generations,

with small, independent, owner-managed shops constituting a chunk of the total

of 4 million retail outlets that are estimated to dot the country’s landscape.

According to surveys conducted by AIMS (Asian Information Marketing and

Social Research) in 1996-97, it is estimated that there are over 2.1 million retail

outlets stocking FMCG items in urban India alone. This implies that there is one

outlet for every 125 urban residents. From the tables given above, we have

observed that the north and east zones have a significantly higher density of retail

outlets as compared to the south and west zones.

The very concept of retailing, however, is still under developed in India, with

emphasis only being laid on distribution. The Indian retail market is quite large

but highly fragmented, comprising very few large retailers. It is estimated that

there are approximately 1.8 million urban retail outlets in this unorganised sector,

out of which only 7 per cent achieve sales of over Rs 8 lakh per annum. These

traditional corner stores, at best, constitute nothing more than a cost and

distribution overhead. At worst, they destroy the very concept of making

shopping a pleasant experience. In fact, it is estimated that till date less than 2 per

cent of the retailing business in India comes from organised retailing.

There are approximately only 100 odd credible organised retailers comprising

supermarkets and department stores in the entire country, the majority of which

too have only come up during the last five years or so. Most of these stores are

owner-managed and are independent outlets, while only a handful of companies

have actually got down to serious chain store retailing yet. While almost 85 per

cent of the shopping in the US is done in organised stores, it is a very different

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merchandise, offer limited services and at low prices. For instance, Subiksha and

Margin Free Super Market.

4.11.4) Department Stores: Large stores ranging from 20000-50000 sq. ft., catering to a

variety of consumer needs. Further classified into localised departments such as

clothing, toys, home, groceries, etc. 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. A store having several departments

such as clothing, personal care and cosmetics, books and stationeries, house ware

goods, electronics etc. all under a single roof, although individually functioning

as a Strategic Business Unit (SBU). These stores are large in size (or area) more

often owned by large or national chains. For instance, Life Style, Shoppers’ Stop,

Pantaloon, Westside, Ebony.

4.11.5) Hypermarkets/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 per cent of all food and grocery

organised retail sales.14 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 and grocery and

personal sales. Hyper markets are very large in size, carry grocery, hardware,

appliance and other general merchandise, with self service facilities, usually

located in warehouse type structures with large parking facilities. For instance,

Trent's (a Tata Enterprise) Star India Bazaar, Giant (RPG Group) and Big

Bazaar( Pantaloon Retail India).Hyper markets are very large in size, carry

grocery, hardware, appliance and other general merchandise, with self service

facilities, usually located in warehouse type structures with large parking

facilities. For instance, Trent's (a Tata Enterprise) Star India Bazaar, Giant (RPG

Group) and Big Bazaar (Pantaloon Retail India).

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4.11.6) Convenience Stores: Ideally located close to residential areas to enable

target customers have easy accessibility and select convenient merchandise such

as beverages, ready-to-eat snacks, grocery etc. For instance the friendly

neighbourhood grocery 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.

4.11.7) MBO’s: Multi Brand outlets, also known as Category Killers, offer several

brands across a single product category. These usually do well in busy market

places and Metros.

4.11.8) Shopping Plaza: The shopping plaza will be a configuration of many

tenants using space of 1,000 sq ft. or so for putting up stores within a single

building. For instance, Fountain Plass (Chennai), Modi Arcade Plaza (Bangalore)

etc.

4.11.9) Kiosk: Kiosk as a store often is a concession format store placed within a

mall/shopping centre, a bus station, airport etc. It is a free standing pavilion open

on one or more sides. For instance, in a bookstore kiosk, customers are provided

with online catalogue service to help them to identify titles and read reviews

before making a purchase decision.

4.11.10) Standalone Stores —the Oldest Retail Format

Standalone stores can be defined as single self service stores and are an

important supermarket store type within the modern Indian retail environment.

India has been witnessing a rise in various formats in the past few years.

Although traditional retail formats such as ‘Kirana stores’, grocery stores and so

on still exist in the market, modern retail formats are growing in importance for

the FMCG marketer. This is because of the availability of a wide range of

products and services and increase in awareness among the customers. In fact

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It can be observed that Pantaloon has the highest estimated sales. The second

largest retailer was RPG, followed by Shopper’s stop. In terms of floor space,

Pantaloon was again at the top having 30 lakh sq.ft. in 2004-05. A recent 2008

report on India’s organized retail sector predicts that the existing players in this

sector such as Bharati, RPG, Pantaloons, Reliance, Birla's and so on are going to

witness a multifold growth in the coming 5-10 years. This dynamic sector will also

witness the debut of other major Indian business players such as Mahindra,

Parsavnath, DLF, Hero Honda and India bulls. These players are making it happen

big in a short span because they are keeping the important factors such as

operational efficiency as their prime concern. This is also supported by extremely

high concern for customer satisfaction and extravagant experience for the

customers while consuming products and services at organized retail stores. India

has a highly competitive retail industry; therefore, it is very essential to have know-

how of all those factors which will help retailers to sustain in the long run.

4.13 Region-wise Analysis of Indian Retailing

The existence of major hindrances in the development of organised retailing in

India, does not, however, imply that supermarkets and department stores are

entirely non-viable in India. All problems notwithstanding, the first signs of a

retail revolution are already visible in the country and this is so in spite of the

immense diversity between regions within the country. It is usually felt that

extending retail operations from one region to another within India is like

travelling from one country to another. The tastes, habits, consumption and

buying patterns are vastly different between various regions making it imperative

for a retailer to possess a very sound knowledge of each region that he operates

in. Diversity of the country in relation to the growth of retail operations and the

present Indian retail scenario can be examined. It must also be mentioned here

that some extremely interesting and very large retail chains are also expected to

come up in the near future in the country.

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4.13.1 Northern India

The northern part of India comprises some of the largest states in India but has

seen very little development in terms of organised retailing, except in places like

Delhi , Faridabad, Jaipur, Lucknow and Allahabad among other cities. Some of

the important cities and towns in the various states of northern India which may

be termed as attractive retail destinations are:

• Delhi - New Delhi

• Haryana - Faridabad, Gurgaon, Rohtak

• Himachal Pradesh - Shimla

• Jammu & Kashmir - Srinagar, Jammu, Gulmarg

• Punjab - Chandigarh, Amritsar, Ludhiana, Jalandhar,

Patiala

• Rajasthan - Jaipur, Jodhpur

• Uttar Pradesh - Dehra Dun, Noida, Nainital, Meerut, Agra,

Lucknow, Kanpur, Allahabad, Moradabad

It has been observed that whatever little growth has taken place in the organised

retail sector of late, has taken place primarily in the apparel and fast food sectors.

Many international readymade garment brands have discovered that franchising

is the most successful method of branching out into India and many of them have

opened their exclusive outlets by giving franchisees throughout various parts of

the country. Companies like Benetton, Arrow, La Coste, Van Heusen,

Weekender, Raymonds, Lee, Adidas and Reebok have taken the lead in this

regard and have opened many such stores all over the country, especially in

northern India, with a fair degree of success. However, apart from these

relatively small franchised stores, there is also the emergence of larger stores and

multi-storeyed department stores especially in the major cities of northern India

like Delhi, Chandigarh and Jaipur.

Large multi-storeyed department stores like Ebony, Snowhite, Big Jo’s, Jainsons,

Landmark and the latest edition of Shoppers Stop have also become quite popular

within their respective regions. These relatively large department stores usually

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4.13.2 Southern India

The southern part of India is undoubtedly the most literate part of the entire

country. It has the highest percentage of literacy and also has the highest

number of organised retail stores compared to any other region. In fact even the

global recognition that our country has received in the IT industry, has largely

been possible on account of the vast pool of wealth that exists in the southern

part of the country. It is in many states of South India that most of the biggest

global names in the Infotech industry have their offices and an extremely large

pool of manpower talent, which has also brought more prosperity to these

states.

It is also said that organised retailing in India actually originated from the South

and it is from here that it has been gradually spreading to other parts of the entire

country. The level of retailing in some southern cities is also far higher than in

most other parts of India. Some of the important cities and towns in the states of

southern India are as follows:

• Andhra Pradesh - Hyderabad, Secunderabad, Vishakapatnam

• Karnataka - Bangalore, Belgaum, Mangalore, Mysore

• Keral - Trivandrum, Kochi, Calicut, Kottayam, Kannur

• Tamilnadu - Chennai, Erode, Salem, Vellore, Coimbatore, Trichy,

Kanyakumari

• Andaman & Nicobar Islands - Port Blair

• Pondicherry

Almost all major national and international brands have their stores across south-

ern India. While some of these outlets are company-owned, others are franchised.

Apart from the outlets of some of the major companies, many small Indian

companies have also been promoted by dynamic entrepreneurs who operate some

very popular retail stores over a large spectrum of store formats in the region. In

fact though the density of population in the South is much lesser in comparison

to the north, there are a very large number of organised retail stores here

128

including fast food stores, supermarkets, apparel stores and consumer electronic

stores among others.

Some of the major retailers of south India are as follows:

Nilgiris

It is said that the supermarket way of shopping was introduced in India by this

then fairly small South Indian family. This company known to have been called

the ‘Nilgiris’ chain of supermarkets has been operating very successfully in

Bangalore, Chennai, Coimbatore, Erode and some other South Indian towns and

cities since more than the four decades. In fact the advent of Nilgiris has been a

tremendous boon for consumers in these towns who have been able to do their

one-stop grocery shopping here. The tremendous customer traffic at these

Nilgiris stores in turn has fascinated many entrepreneurs in South India so much

that a large number of retail stores of various store formats have since opened all

over South India. The Nilgiris chain of stores too has grown, though rather

slowly over the last four decades and presently has about 20 supermarkets, some

company-owned and others franchised. They also have ambitious plans of

opening a large hypermarket (over 100,000 square feet) on the outskirts of

Bangalore in the near future which could become the largest single store in the

entire country.

FoodWorld

In May, 1996 the 100-year old Chennai-based Spencers and Company, which

was taken over by RPG Enterprises in 1989, started a supermarket chain from

Chennai with the brand name 'FoodWorld'. This company was set up under a tie-

up with the retail wing of the US-based $40 billion Jardine Matheson group,

Dairy Farm International, Hong Kong who currently operate over 2400 stores in

a variety of formats all over the world. The stores of Dairy Farm are extremely

popular in many countries in south-east Asia, Australia, New Zealand, Spain and

the United Kingdom. It is said that in India, the company tasted blood right from

its inception, which is apparent from the fact that it did not waste any time in

implementing its expansion plans unlike the Nilgiris.

129

not more, but real progress has been extremely low. This is so because the

population in India is generally not very mobile like in the US or Europe and

prefers to remain in the same areas as they have been for many generations even

if the economy of the region is in shatters.

Retailing in eastern India has, by and large, been extremely fragmented with a

majority of many small outlets and hence very few major retailers have set foot

in this region yet. Although the population in the region is quite large, the buying

power of the consumer is still very limited. It is primarily because of this that

most large retailers including garment as well as fast food stores prefer not to

include the region in their expansion plans, at least in the near future. Companies

even prefer to open stores in cities such as Indore and Hyderabad but avoid the

relatively more populated cities and towns like Kolkata or even Jamshedpur.

Some of the important states and towns in the region, which may be termed as

attractive retail destinations, are as follows:

• West Bengal - Kolkata, Darjeeling, Siliguri, Haldia, Kalyani,

Durgapur

• Assam - Gauhati, Dibrugarh, Silchar, Jorhat

• Bihar - Dhanbad, Jamshedpur, Ranchi, Patna

• Orissa - Bhubaneswar, Cuttack, Puri, Balasore, Rourkela

• Nagaland - Kohima, Dimapur

• Meghalaya - Shillong

• Sikkim - Gangtok

• Arunachal Pradesh - Itanagar

• Manipur - Imphal

• Tripura - Agartala

Some of the major retailers of the region are:

Vishal Garments

It is believed that after all major store formats failed in eastern India, it was only

the discount format of Vishal Garments that was successful. The company’s first

store is located on prime Chowringhee Road very close to the historical New

133

Market of Kolkata. The company believes in round-the-year sales in which it

heavily discounts its products on the lines of international discount stores. The

primary focus of the company is on garments for all ages. The company has also

recently opened its second store, a large 3000 square feet store located in the

prime Gariahat area of South Kolkata, where it also follows the same policies of

‘everyday low prices’.

Pantaloon

Pantaloon was undoubtedly the first true international retailer to be successful

in the city of Kolkata. The company has its head office in Mumbai and as a

matter of prime policy only believes in having its own stores and does not

believe in the concept of franchising. The company has an extremely successful

department store format and its policy of low-cost high-volume products has

been paying off extremely well especially in Kolkata. Apart from its store in

Kolkata, the company has seven more branches including one each in Chennai,

Hyderabad, Mumbai, Nagpur, Pune, Secunderabad and Thane.

It has been observed especially in the eastern region that retailers dealing in

essential household items are far more successful than those dealing in

upmarket or luxury products. The one type of retail format that would definitely

be a grand success in the region would be that of a ‘no-frill, low price

supermarket/convenience store’ format focusing primarily on essential items of

daily necessity.

4.13.4 Western India

Western India is perhaps the most advanced and progressive region of the

country. This region is also economically the most advanced as a result of

which the major part of the population here also has greater buying power as

compared with most other parts of the country. Some of the important cities

and towns in the various states of Western India, which are attractive retail

destinations, are:

134

stores across 13 states at the end of FY 2007-08. RRL launched its first

‘Reliance Digital’ store in April 2007 and its first and India’s largest hypermarket

‘Reliance Mart’ in Ahmedabad in August 2007. RRL has also launched its first

few specialty stores for apparel (Reliance Trends), footwear (Reliance

Footprints), jewellery (Reliance Jewels), books, music and other lifestyle

products (Reliance Timeout), auto accessories and service format (Reliance

Autozone) and also an initiative in the health and wellness business through

‘Reliance Wellness’. In each of these store formats, RRL is offering a unique set

of products and services at a value price point that has not been available so far to

the Indian consumer. Overall, RRL is well positioned to rapidly expand its

existing network of 590 stores which operate in 57 cities.

During the year, RRL also focused on building strong relationships in the agri-

business value chain and has commenced marketing fruits, vegetables and staples

that the company sources directly to wholesalers and institutional customers.

RRL provides its customers with high quality produce that has better shelf life

and more consistent quality than was available earlier. RRL has made significant

progress in establishing state-of-the-art staples processing centers and expects to

make them operational by May 2008. RRL also expanded its supply chain

infrastructure. The Company is fully geared to meet the requirements of its

rapidly growing store network in an efficient manner.

Recognizing that strategic alliances are going to be a key driver to its retail

business, in FY 2007-08, RRL established key joint ventures with international

partners in apparel, optical and office products businesses. Further, RRL will

continue to seek synergistic opportunities with other international players as well.

This year, RRL will continue its focus on rapid expansion of the existing and

other new formats across India.

Shoppers Stop

The K Raheja group of companies, considered to be one of the largest real estate

developers in the country, also owns a few cinema halls. When the cinema hall

business was no longer viable, the company began exploring many possibilities

138

and were finally convinced that if real estate developers in other parts of the

world could succeed in retailing so could they. In October 1991, Shopper’s Stop

made its first serious attempt to create a world class department store in

Maharashtra. The cinema hall in Andheri, in Mumbai's western suburbs was

gradually but extensively renovated over a couple of years to ultimately make the

property appropriate for a 32,000 square feet department store. The store is

primarily an apparel store offering garment and garment accessories for both men

and women of all ages including a very attractive special section for children.

The store was a great success right from its inception and was visited by over

3000 customers on week-days and about 6000 on weekends. As mentioned

before the large population of Mumbai, which had the resources to spend, had

been quite desperate for such a store for a very long time. However, never before

did they ever get the opportunity to witness such a large variety of products under

one roof and at reasonable prices. The sheer convenience and service was hitherto

unheard of in this part of the country and the positive response encouraged the

group to think bigger. The company now has some very successful stores with

almost identical store formats in cities like Bangalore, Chennai, Hyderabad and

even one in Jaipur. The company has a current turnover in excess of 160 crores

per annum and is believed to have a sales growth of over 40 per cent per annum.

Westside

As mentioned before Westside, the retailing outfit of the Tata’s, has also created

a department store format with emphasis on garment and garment accessories.

They began their commercial operations in Mumbai only a couple of years ago

and much later than Shopper's Stop but with much fanfare. Within a very short

span of time, apart from Mumbai, they too have already expanded their

operations into Chennai, Bangalore and Hyderabad and have some very

ambitious plans for the near future as well. In fact their seriousness and financial

power to back their entry into the exciting retail arena in India, were

demonstrated during one of their interesting promotion campaigns when they

139

Star India

Bazaar

Hypermarket 2 Chota

Budget,

Lambi

Shopping

Food and Non

Food

Discount

Piramyd Department

Stores

7 ----- Apparel,

accessories,

cosmetics,

home

Regular

Spencer’s

Express

Convenience

Stores

93 ---- Food and

Grocery and

Basic home

needs

Regular

Spencer’s

Daily

Supermarket 143 --- Food and

Grocery and

Basic home

needs

Marginal

Discount

Spencer’s

Super

Supermarket 8 ---- Food and

Grocery and

Basic home

needs

Marginal

Discount

Spencer’s

Hyper

Hypermarket 12 ---- Food and Non

Food

Discount

( Source ; Retailing Management By Swapna Pradhan, 3rd Edition, pg. 95 – 96 )

4.14 Main Drivers of Retailing in India

4.14.1) Rising incomes

Over the past decade, India's middle- and high-income population has grown pace of

over 10% per annum. Though this growth is most evident in urban areas it has also

taken place in rural markets. Further, the number of households earning above

Rs.1,50,000 per annum is about 30 million and expected to grow to 80 million 19. This

143

growing high-income population triggering the demand for consumer goods, leading

to the proliferation of quality of higher priced products.

4.14.2) Consumerism Cycle

Consumer cycle starts with the industry dictating the market. Eventually time the

distributor gains control over the market; at this stage the distributor is an important

link between manufacturer and customer. When the market starts developing and

expanding its horizons, retailers turn into the vital in this supply chain. India is

entering this third stage where retailers control market. Being the closest link to the

consumer in the supply chain, retailers profit accordingly. Manufacturers spend a lot

of money promoting a product; profit it's not on the shop-shelf, consumers won't be

able to buy it. Manufacturers have also realised that retailer recommendations matter,

particularly in smaller towns where retailers are figures of authority or opinion

leaders. With shopping attitudes changing, the Indian market today desires value-

added products and services with good ambience and brands which only a retailer can

provide. Hence good retailer relations are a must. Manufacturers are ready fees to get

retailers to stock a product, or display charges to place it prominently.

4.14.3) Establishment of the Supply Chain

Over the past few years, the consumer goods sector has been transformed

by increased liberalization, continuous reduction in customs duty, a shift from

quota to tariff-based systems for imports and sophistication in manufacturing.

Entry restrictions for multinationals have been removed in nearly all sectors. All

this has enabled chain retailers to enjoy better range depth and, sourcing options

as well as improved average margins. There has been a proliferation in, the range

across all categories, with a simultaneous increase in the supply of f products and

quality retail space. According to a study, there are over 18,000 stock-keeping

units (SKUs are products and their variants, of type and size, counted

individually), while most retailers have the space for at most 5,000-2,000 units.

This has tempted a number of real estate companies and other corporate into

investing in malls and other retail formats.

144

4.14.7) New Entrepreneurs

The growing attractiveness of the retail trade has begun to attract new

entrepreneurs with ideas, and venture capitalists with funds. Venture capitalists like

ICICI and IL&FS are also increasingly willing west in retail businesses.

4.14.8) Explosion of Media

There has been an explosion in media as well during the past decade; Kick-started by

the cable explosion during the Gulf War, television has accelerated to a point where

there are more cable connections than telephones in Indian, homes (225 million vs. 23

million), and about 90 channels are being aired at all times. This media

bombardment has exposed the Indian consumer to the lifestyles of more affluent

countries and raised their aspirations and expectations from the shopping

experience; they want more choice, value, service, experience and convenience.

4.14.9) Foreign Retailers Looking for Entry Options

The increasing attractiveness of the sector has drawn the interest of a number of global

retailers. With the opening up of the economy, more and more MNCs have entered

the Indian business arena through joint ventures, franchisees or even self-owned

stores. The very first MNC to get into the business was Spencer’s, a tie-up between the

RPG Group and Dairy Farm International, $ l0 billion Hong Kong-based Company,

and a part of the Jardine Matheson, group. While foreign retailers cannot start

operations on their own mainly because of FDI restrictions on the sector, a number

of companies, Kingfisher, Metro, Carrefour and Ahold, are exploring entry options.

In appe1rel, Benetton, Lifestyle and Zegna are already in business, and Dairy Farm

has a number of retailing joint ventures in India.

4.14.10) Technological Impact

Technology is probably the most dynamic change agent in the retailing industry.

The computerization of the various operations in a retail store including inventory

management, billing and payments as well database (customers) management -

widespread use of bar coding, point of sale terminals and Management Information

Systems (MIS) has changed the face of Retailing drastically. Apart from providing the

retailers with better and timely about their operations, the technology also performs

such tasks as preventing theft store's goods and creating a better shopping

148

atmosphere. This is help of closed-circuit televisions, video walls and in-store video

network forms of interactive applications ranging from CD-ROMs to let customers

select and buy products.

4.14.11) Building Chains Around Brands

Apparel, footwear and consumer durable brands have driven the growth of specially

chains and upgraded existing multi-brand outlets. Some like Reebok claim to have

entered retailing because of the paucity of suitable multi-brand retailing options.

4.14.12) Expansion of Family-Owned Businesses

The most successful of these are the Rs.150 crores Viveks, the 40-year-old

Chennai consumer durables chain, the Rs.50-crore Pantaloon apparel retail

business, and Bangalore’s food retailer Nilgiris. With the new-age demanding

consumer preferring to shop in these big retail chains, traditional ‘bania’ shops

will face a difficult time trying to meet consumer expectations. This will make

retailing an unattractive proposition for them. The process is likely to be kick-

started by grocery stores transforming into supermarkets since the margins in

the grocery trade are the lowest in the business. Further, the ‘bania’ is no longer

considered a trusted friend. Managing inventory is a challenge in the small

spaces that they operate from and it is a tough balancing act between stocks-

out and keeping low-turnover SKUS. The younger generation, however, is far

more aware of the cost of real estate or indeed of higher-margin retailing

opportunities. Moving up to newer business opportunities and creating the

space for a new model will take top priority.

4.14.13) Awareness in Rural Market

The rural market is beginning to emerge as an important consumption area,

accounting for over one-third of the demand for most key consumer durables

and non-durable products. In response, manufacturers of consumer goods-both

FMCGs and durables have begun developing new products (LG television,

shampoo sachets, Ruf’n Tuf jeans) and marketing strategies (using a village

‘haat’ for brand promotions) with the rural consumer in mind.

149

The recent years have witnessed rapid transformation and vigorous profits in

Indian retail stores across various categories. This can be contemplated as a result

of the changing attitude of Indian consumers and their overwhelming acceptance

to modern retail formats. Asian markets witness a shift in trend from traditional

retailing to organized retailing driven by the liberalizations on Foreign Direct

Investments. For example, in China there was a drastic structural development

after FDI was permitted in retailing. India has entered a stage of positive

economic development which requires liberalization of the retail market to gain a

significant enhancement.

Domestic consumption market in India is estimated to grow approximately 7 to

8% with retail accounting for 60% of the overall segment. Of this 60%, organized

retail is just 5% which is comparatively lesser than other countries with emerging

economies. In developed countries organized retailing is the established way of

selling consumer products. Despite the low percentage, Indian textile industry has

grown noticeably in organized retailing of textile products. The negative phase in

exports may have compelled the Indian textile retailers to explore the

opportunities in the domestic market substantially causing the outstanding growth

in the concerned segment. These indications give a positive notion that organized

retailing has arrived in the Indian market and is here to stay. It is expected to

grow 25-30 per cent annually and would triple in size from Rs35,000 crores in

2004-05 to Rs109,000 crores ($24 billion) by 201021.

India is on the radar screen in the retail world and global retailers and at their

wings seeking entry into the Indian retail market. The market is growing at a

steady rate of 11-12 percent. The inherent attractiveness of this segment lures

retail giants and investments are likely to sky rocket with an estimate over Rs 200

billion by end of 201022. Indian retail market is considered to be the second

largest in the world in terms of growth potential.

A vast majority of India's young population favors branded garments. With the

influence of visual media, urban consumer trends have spread across the rural

areas also. The shopping spree of the young Indians for clothing, favorable

income demographics, increasing population of young people joining the

153

workforce with considerably higher disposable income, has unleashed new

possibilities for retail growth even in the rural areas. Thus, 85 % of the retail

boom which was focused only in the metros has started to infiltrate towards

smaller cities and towns. Tier-II cities are already receiving focused attention of

retailers and the other smaller towns and even villages are likely to join in the

coming years. This is a positive trend, and the contribution of these tier-II cities

to total organized retailing sales is expected to grow to 20-25 %.

4.16 Challenges facing the Organized Retail Industry:

Despite the rosy hopes, some facts have to be considered to positively initiate the

retail momentum and ensure its sustained growth. The major constraint of the

organized retail market in India is the competition from the un-organized sector.

Traditional retailing has been deep rooted in India for the past few centuries and

enjoys the benefits of low cost structure, mostly owner-operated, therein resulting

in less labor costs and little or no taxes to pay. Consumer familiarity with the

traditional formats for generations is the greatest advantage to the un-organized

sector. On the contrary, organized sector have big expenses like higher labor

costs, social security to employees, bigger premises, and taxes to meet.

The challenges facing the Indian organized retail sector are various and these are

stopping the Indian retail industry from reaching its full potential. The behavior

pattern of the Indian consumer has undergone a major change. This has happened

for the Indian consumer is earning more now, western influences, women

working force is increasing, desire for luxury items and better quality. Indian

consumer now wants to eat, shop, and get entertained under the same roof. All

these have lead the Indian organized retail sector to give more in order to satisfy

the Indian customer.

The biggest challenge facing the Indian organized retail sector is the lack of retail

space. With real estate prices escalating due to increase in demand from the

Indian organized retail sector, it is posing a challenge to its growth. With Indian

retailers having to shell out more for retail space it is effecting there overall

154

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8. Michel Levy, Weitz Barton A. and Pandit Ajay (2008) - Retailing

Management –Sixth Edition, Tata McGraw-Hills Publishing Company

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study,Icfaian Journal of Management Research, Vol. VII, No. 12, 60 – 73.

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17. www.indianrealtynews.com

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19. The Great Indian Middle Class, NCAER, MGI Analysis (2007)

20. Global brands slash prices to woo small owners (2007) – The Economic

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24. India Retail Report (2009)

158

Chapter –V

Data Analysis and Interpretation

• Analysis – Consumer Behaviour; Organized Retail

• Analysis – Unorganized Retailers

• Hypotheses Testing

Graph 5.1: Classification of Respondents by Considering Age

8.0%

42.6%

27.6%

21.8%

Up to 20 yrs.

21 to 30 yrs.

31 to 40 yrs.

Above 41 yrs.

The purpose was to find out the age group to which maximum numbers of

customers belong. This helps to focus on target group of potential customers of

organized retail format. Consumer behaviour highly depends on age of the

respondent. Young shoppers are generally prone to accept new products and new

concepts, trends easily. Modern retailer has to concentrate all marketing efforts

on young shoppers.

From the above table it is observed that, the majority of the visitors in Sangli i.e.

52 percent are from young age group i.e. 21 to 30 yrs. age group followed by

middle age group 24.8 percent and elder age group 18.4 percent. Majority of the

customers from Solapur city belong to age group of 21 to 30 yrs. i.e. 36 %

followed by 29.6 % from 41 yrs. and above age group and then 28.8 % from 31

to 40 yrs. In Satara and Kolhapur cities, majority are from age 21 to 30 yrs. ( 46.4

% and 36 % ) then from age group of 31 to 40 yrs. ( 26.4 % and 30.4 ) and then

from age group of above 41 yrs. ( 8 % and 31.2 %) . Overall very less proportion

is from customers up to 20 yrs. age group i.e. teenagers.

It can be seen that youngsters are the potential group of customers in modern

retail shops. They like modern facilities, sophisticated way of shopping at

organized retails. Youngsters prefer to shop at modern retail outlets because they

162

generally like to spend leisure time in enjoying shopping activity with friends.

For young couples this can be evening recreational activity. Therefore retailers

also have to think of attracting and retaining more and more young shoppers.

Table No.5.4: Categorization of Customers by Considering Occupation.

Occupation Service Business Housewife Any other Total

City Frequ

ency

% Frequ

ency

% Frequ

ency

% Frequ

ency

% Frequ

ency

%

Sangli 71 56.8 25 20.0 12 9.6 17 13.6 125 25

Solapur 46 36.8 40 32.0 19 15.2 20 16.0 125 25

Satara 55 44.0 28 22.4 18 14.4 24 19.2 125 25

Kolhapur 52 41.6 39 31.2 18 14.4 16 12.8 125 25

Total 224 44.8 132 26.4 67 13.4 77 15.4 500 100

The above information was collected to know occupation of respondents and

study its relation with buying behaviour. Occupation of a person can determine

his/her lifestyle and ultimately their habits and requirements. Most of the time

businessmen do not get time for shopping and employed people get leisure time

especially reserved for shopping. Housewives also like to shop for their family.

It is clear from the table that in Sangli, Solapur, Satara and Solapur cities

respectively, nearly 56.8 %, 36.8 %, 44% and 41.6 % shoppers are employed in a

service, 20 %, 32 %, 22.4%, and 31.2 % are having their own business and

only 9.6 %, 15.2 %, 14.4 % and 14.4 % are housewives.

This also makes clear that majority of the shoppers are earners as well as decision

makers. Most of the shoppers are employed and shopping in modern retail shops

might be convenient for them. Employed people reserve time for leisure activities

after returning from workplace as well as on holidays. Retailer can consider this

factor for developing strategies for rush hours, peak time etc. Purchasing pattern

also changes with occupation of the person. Needs and demands are derived on

the basis of occupation of the respondent.

163

family. In Solapur also majority i.e. 37.6 % and in Kolhapur 36.8 % are the

maximum values for 4 family members. In Satara majority is 40.8 % for 5 family

members. Average size of family for Sangli, Solapur, Satara and Kolhapur is 9,

12, 5 and 5 respectively.

On an average the family size is 5 members in all cities as well as in total. As

nuclear families are more than joint families number of family members can limit

to 4 or 5 people. As percentage of working women is increasing their role as

decision maker is also increasing. Role of children as influencer in buying

process also becoming important.. Thus retailer has to take into consideration

important features of current family structure.

Table No.5.8: Monthly Income of the Respondents

Monthly

Income

Up to Rs.

10000

Rs. 10001 to

Rs. 20000

Rs. 20001 to

Rs. 30000

Above Rs.

30000

Total

City Frequ

ency

% Frequ

ency

% Frequ

ency

% Frequ

ency

% Frequ

ency

%

Sangli 27 21.6 47 37.6 30 24.0 21 16.8 125 25

Solapur 22 17.6 54 43.2 38 30.4 11 8.8 125 25

Satara 61 48.8 50 40.0 7 5.6 7 5.6 125 25

Kolhapur 20 16.0 36 28.8 51 40.8 18 14.4 125 25

Total 130 26.0 187 37.4 126 25.2 57 11.4 500 100

167

Graph 5.2: Monthly Income of Respondents

05

101520253035404550

Per

cent

age

Up toRs.10000

Rs. 10001 to20000

Rs. 20001 to30000

Above Rs.30000

Sangli

Solapur

Satara

Kolhapur

As income is the crucial determinant of consumption, it was studied to know

purchasing pattern. Economic background of the person largely decides his/her

lifestyle. This also influences the kind of store in which he/she may be

comfortable shopping in.

The above table overall shows that majority 37.4 percent customers are having

family income from Rs. 10001 to Rs. 20000 and 25.2 percent belongs to

Rs.20001-Rs. 30000 income group.26 percent customers belong to income group

of up to Rs. 10000 and 11.4 percent customers have their income above Rs.

30000. In Sangli and Solapur city majority is from income group Rs. 10001 to

20000 but data of Satara city shows majority for income group up to Rs. 10000.

For Kolhapur city, majority of the customers belong to income group of Rs

20001 to 30000.

This implies that most of the customers who shop in modern retail outlets are

from middle class and upper middle class. Socio-economic factors are

influencing consumer buying behaviour. It also determines the retailer from

which these customers may shop. Purchases from lower income group may not

be suitable for modern retail format and high class customers prefer to shop in

other formats while considering status criteria.

168

Table No.5.11: Type of Product Purchased From Retail Outlets

City Sangli Solapur Satara Kolhapur Total

Product Freq % Freq % Freq % Freq % Freq %

Food and

Grocery 94 75.2 92 73.6 92 73.6 94 75.2 352 74.4

Personal

Care 76 60.8 109 87.2 83 66.4 112 89.6 380 76.0

Home Care 75 60 87 69.6 68 54.4 97 77.6 327 65.4

Home

Décor 62 49.6 87 69.6 32 25.6 68 54.4 249 49.8

Clothing 48 38.4 77 61.6 104 83.2 81 64.8 310 62.0

Jewellary 37 29.6 70 56.0 1 0.8 9 7.2 117 23.4

Music and

Books 32 25.6 48 38.4 5 4.0 19 15.2 104 20.8

Electronic

Appliances 22 17.6 32 25.6 30 24 32 25.6 116 23.2

Toys 14 11.2 26 20.8 10 8.0 29 23.2 79 15.8

Cooking

and Dining 11 8.8 14 11.2 22 17.6 50 40 97 19.4

Health and

Beauty 10 8.0 13 10.4 31 24.8 59 47.2 113 22.6

Any other 7 5.6 10 8 8 6.4 19 15.2 44 8.8

172

Graph 5.4: Type of Product Purchased by Respondents

0 10 20 30 40 50 60 70 80

Food & Grocery

Personal care

Home Care

Home Décor

Clothing

Jwelery

Music & Books

Electronic Appliances

Toys

Cooking & Dining

Health & Beauty

Other

%

The above table shows the intensity of various items purchased by customers in

organized retail outlets. It is the trend for shoppers that food and grocery and

personal care are the categories mostly shopped in modern retail outlets. The

reason is on such products modern retailers offer discount on M.R.P. which

Kirana shop does not. For categories like electronic appliances etc. customers

generally prefer to purchase from reliable source which will offer after sales

service and maintenance.

Overall 74.4 percent visitors purchasing food and grocery, 76 percent of the

visitors are purchasing personal care items and 65 percent of the visitors are

purchasing home care items. 49.8 percent visitors are purchasing items of home

decor and 62 percent purchase clothing. 23.4 percent customers prefer to

purchase jewelry items, 20.8 percent buy music and books and 23.2 purchase

electronic appliances from modern retail formats. 15.8 percent customers shop

toys, 19.4 percent shoppers like to buy cooking and dining items and 22.6 percent

173

Table No. 5.14: Items Purchased From Traditional Kirana Shop

Items Food Items Non Food Items Total

City Frequency % Frequency % Frequency %

Sangli 95 84.8 17 15.2 112 100

Solapur 76 82.6 16 17.4 92 100

Satara 83 87.4 12 12.6 95 100

Kolhapur 70 86.4 11 13.6 81 100

Total 324 85.3 56 14.7 380 100

The above information was gathered to know different category of items that

generally people purchase from traditional Kirana shops. Food is one of the

purchases which have some safety, quality and reliability considerations. This

makes people to buy it from reliable source on which they can depend on for

cleanliness and good quality of food and grocery.

It is observed from the analysis that 84.8 % from Sangli, 82.6 % from 82.6, 87.6

% from Satara, 86.4 % from Kolhapur city, respondents purchasing food items,

where as 15.2 % from Sangli, 17.4 % from Solapur, 12.6 % from Satara and 13.6

5 from Kolhapur, respondents are purchasing non food items from Kirana shops.

The overall response is majority i.e. 85.3 % of the total respondents purchase

food items and only 14.7 % of the respondents purchase non food items.

There is more preference for purchasing food items than non-food items by

respondents. This may be because of the reliability on Kirana Shop and heavy

discounts on non-food items in Modern Retails. But modern retailers have to

work hard for attracting this chunk of customers and making them feel reliable

while purchasing food products.

177

Table No. 5.15: Reason behind Purchase from Kirana Shop

There are many reasons behind the purchase from traditional Kirana shop. The

intension of this question is to find out most preferred reason.

The most important reasons are good and reliable quality (20.2 percent), near by

home (7.4 percent), Time saving and convenience (6.6 percent), urgently required

178


Reason Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

No

Response 45 36.0 39 31.2 53 42.4 44 35.2 181 36.2

Urgently

Required 17 13.6 6 4.8 4 3.2 4 3.2 31 6.2

Good and

Reliable

Quality

17 13.6 19 15.2 27 21.6 38 30.4 101 20.2

Home

Delivery 12 9.6 7 5.6 4 3.2 5 4.0 28 5.6

Near by

Home 7 5.6 18 14.4 5 4.0 7 5.6 37 7.4

Time

Saving 9 7.2 8 6.4 6 4.8 10 8.0 33 6.6

Money

Saving 9 7.2 13 10.4 4 3.2 5 4.0 31 6.2

Convenient 5 4.0 14 11.2 6 4.8 8 6.4 33 6.6

Bulk

Purchase 2 1.6 0 0.0 0 0.0 2 1.6 4 0.8

Good

Relations 2 1.6 1 0.8 16 12.8 2 1.6 21 4.2

Total 125 100 125 100 125 100 125 100 500 100

Table No.5.18: Category of Shopping

Category of

Shopping

Regular

Shopping

Special

Shopping

Infrequent

Shopping

Total

City Frequ

ency

% Frequ

ency

% Frequ

ency

% Frequ

ency

%

Sangli 59 47.2 39 31.2 27 21.6 125 100

Solapur 76 60.8 31 24.8 18 14.4 125 100

Satara 54 43.2 63 50.4 8 6.4 125 100

Kolhapur 72 57.6 41 32.8 12 9.6 125 100

Total 261 52.2 174 34.8 65 13.0 500 100

Above information was collected to know category of shopping mostly preferred

by shoppers.

The above table shows that in Sangli about 47.2 percent respondents are visiting

for regular shopping, 31.2 percent are for special shopping and the remaining are

for shopping infrequently. In Solapur, 60.8 percent visit for regular shopping,

24.8 % visit for special shopping and 14.4 % visit infrequently. In Satara,

maximum i.e. 50.4 % visit for special shopping, 43.2 % come for regular

shopping and 6.4 % visit for infrequent shopping. In Kolhapur, majority 57.6 5

visit for regular shopping, 32.8 % visit for special shopping and 9.6 % come for

infrequent shopping. Overall, it is observed that majority, 52.2 % are regular

shoppers followed by 32.8 % of the respondents visit for special shopping and 13

% visit for infrequent shopping.

Shoppers regularly purchase from Organized Retail Stores.

182

Table No.5.19 Rank of Benefits While Shopping in Modern Retail Format

City Rank Saves

time %

Saves

money %

Different

experience %

Variety

of

products

% Window

shopping %

Status

enhance %

1 33 26.4 46 36.8 3 2.4 34 27.2 11 8.8 1 0.8

2 37 29.6 34 27.2 11 8.8 30 24.0 13 10.4 1 0.8

3 28 22.4 20 16.0 17 13.6 44 35.2 10 8.0 5 4.0

4 17 13.6 16 12.8 24 19.2 10 8.0 47 37.6 11 8.8

5 7 5.6 6 4.8 46 36.8 4 3.2 23 18.4 38 30.4

Sangli

6 3 2.4 3 2.4 24 19.2 3 2.4 21 16.8 69 55.2

1s 55 44.0 45 36.0 6 4.8 15 12.0 5 4.0 1 0.8

2 28 22.4 34 27.2 20 16.0 37 29.6 3 2.4 5 4.0

3 11 8.8 19 15.2 41 32.8 40 32.0 10 8.0 4 3.2

4 16 12.8 20 16.0 25 20.0 23 18.4 25 20.0 15 12.0

5 9 7.2 6 4.8 23 18.4 6 4.8 52 41.6 29 23.2

Solapur

6 6 4.8 1 0.8 10 8.0 4 3.2 30 24.0 71 56.8

(Continued …..on next page)

183

Graph 5.11: Ranking Given to ‘Window Shopping’ Factor by Respondents from

Sangli.

The above graph explains that 37.6 percent of the customers from Sangli have opined

that modern retail markets are not for window shopping; only around 9 percent of the

customers have stated that the modern outlets are useful for window shopping.

Graph 5.12: Ranking Given to ‘Status Enhancement’ Factor by Respondents from

Sangli.

From the above given data and graphs it can be observed that, 55.2 percent customers

of Sangli city don’t think that visit to modern retail shops will enhance their status in

the society.

187

Graph 5.13: Ranking given to ‘Time saving’ Factor by Respondents from Solapur.

From the above given graph it is clear that majority customers from Solapur (44

percent) opined that the modern shopping outlets are helping in save the time while

shopping because all items are available at one place.

Graph 5.14: Ranking Given to ‘Saves Money’ Factor by Respondents from

Solapur.

From the above graph it can be said that 36 percent of the customers from Solapur feel

that the modern shopping outlets are useful in saving the money in their purchasing

because of different schemes introduced by the retailers.

188

Graph 5.21: Ranking given to ‘Different Experience’ Factor by Respondents

From Satara.

Respondents from Satara do not think that shopping in modern retail formats give

different experience. Majority is 32.8 % with fourth rank.

Graph 5.22: Ranking Given to ‘Variety of Products’ Factor by Respondents from

Satara.

It can be seen that maximum respondents ( 39.2 % ) have ranked ‘Variety of products’

factor as third. This means that no much importance given by respondents to this factor.

192

Graph 5.23: Ranking Given to ‘Window Shopping’ Factor by Respondents from

Satara.

The above graph shows that, customers from Satara do not feel that modern retail

outlets are for window shopping. Fifth rank is given with value as 48 percent.

Graph 5.24: Ranking Given to ‘Status Enhancement’ Factor by Respondents from

Satara.

193

It can be seen that majority of the respondents from Kolhapur i.e. 51.2 % have given

sixth rank to the factor of status enhancement due to shopping in modern retail outlets.

In every city ranking preferences by respondents are in different pattern but mostly

money saving and time saving are the priorities.

Table No. 5.20: Monthly Expenditure on Modern Retail

Expenditure Upto Rs.

1000

Rs. 1001 to

Rs. 2000

Rs. 2001 to

Rs. 3000

Above Rs.

3000

Total

City Frequ

ency

% Frequ

ency

% Frequ

ency

% Frequ

ency

% Frequ

ency

%

Sangli 68 54.4 34 27.2 10 8.0 13 10.4 125 25

Solapur 30 24.0 60 48.0 31 24.8 4 3.2 125 25

Satara 62 49.6 49 39.2 7 5.6 7 5.6 125 25

Kolhapur 40 32.0 39 31.2 34 27.2 12 9.6 125 25

Total 200 40.0 182 36.4 82 16.4 36 7.2 500 100

The intension of knowing monthly expenditure on shopping from Modern retail shops

is to understand its relation between monthly income of the respondent.

The above table shows the monthly expenditure on purchases from modern retail

stores. It is observed from the table that, 54.4 percent respondents from Sangli are

spending up to Rs. 1000 and 27.2percent are spending amount between Rs. 1001 to

Rs.2000. There are 10.4 percent of the respondents spending more than Rs. 3000.

However there are only 8 percent of the respondents who are spending between Rs.

2001 to Rs. 3000. In Solapur, 48 percent respondents are spending amount between Rs.

1001 to Rs.2000, 24.8 percent spend between Rs. 2001 to Rs. 3000, 24 percent are

spending up to Rs. 1000 and only 3.2 percent spend above Rs. 3000. In Satara

maximum percentages of respondents, (49.6 percent) spend upto Rs. 1000, 39.2 percent

spend between Rs. 1001 to Rs.2000 and 5.6 percent respondents each from group of Rs.

2001 to 3000 and from group above Rs. 3000. The data from Kolhapur city shows that

32 percent respondents spend upto Rs. 1000, 31.2 percent respondents spend Rs.1001

to 2000, 27.2 percent respondents spend Rs. 2001 to 3000 and only 9.6 percent

197

customers respondents spend above Rs. 3000 on purchases from modern retail shops.

Overall it can be predicted that, majority (40 percent) spend up to Rs. 1000 per month

and only 7.2 % customers spend above Rs. 3000 per month on purchases from

organized retail outlets.

This shows that people are ready to spend upto Rs.3000 monthly, on shopping activity

at organized Retail outlet.

Table No.5.21: Factor Most Liked About Organized Retail


Factor Frequ

ency %

Frequ

ency %

Frequ

ency %

Freque

ncy %

Frequ

ency %

Convenient

location 32 25.6 23 18.4 58 46.4 17 13.6 130 26.0

Modern

physical

facilities

16 12.8 22 17.6 19 15.2 17 13.6 74 14.8

Trained

staff 1 0.8 5 4.0 18 14.4 7 5.6 31 6.2

Attractive

display 13 10.4 20 16.0 16 12.8 25 20.0 74 14.8

We get

what we

require

63 50.4 55 44.0 14 11.2 59 47.2 191 38.2

Total 125 100 125 100 125 100 125 100 500 100

198

The above data deals with the reliability of the store in above given factors. Factor

wise presentation is as follows:

Graph 5.32: Ranking for Reliability of Organized Retailer for ‘Availability of the

Product’ (Sangli)

During the study period it has been observed that majority 32 percent of the customers

have said that availability of the products in retail outlet is highly reliable and other 32

percent of the respondents reveled that reliability is average.

Graph 5.33: Ranking for Reliability of Organized Retailer for ‘Efficient

Checkout’ (Sangli)

From the given data it can be said that the retail store is not having efficient checkout

system. This factor is ranked five by the majority customers i.e. 38.4 percent.

202

Graph 5.34: Ranking for Reliability of Organized Retailer for ‘Quality of Private

Label Product’ (Sangli)

From the above given graph it is clear that quality of the private labeled products is ok.

This factor had been given rank two by majority of the customers i.e.32 percent.

Graph 5.35: Ranking for Reliability of Organized Retailer for ‘Accurate Bills’

(Sangli)

The customers are not happy with the billing in the retail stores. They believe that the

billing procedure is not proper. This factor ranked four which is low reliability in the

customers mind by considering the store. This is expressed by 36 percent of the

customers.

203

Graph 5.42: Ranking for Reliability of Organized Retailer for ‘Availability of the

Product’ (Satara)

Regarding consistency in availability of products majority 44.8 % has given 2nd rank,

about 30 % given 1st rank.

Graph 5.43: Ranking for Reliability of Organized Retailer for ‘Efficient

Checkout’ (Satara)

The 2nd parameter is efficient checkout system. In this case 4th tank has given by 51.2

% respondents, 5th rank by 30.4 % no one has given 1st rank.

207

Graph 5.44: Ranking for Reliability of Organized Retailer for ‘Quality of Private

Label Product’ (Satara)

Regarding quality of private label products, majority 35.2 % given 3rd rank, 22.4 %

given 2nd rank.

Graph 5.45: Ranking for Reliability of Organized Retailer for ‘Accurate Bills’

(Satara)

The 4th parameter is accurate bills. It is interesting that majority 40.8 % have given 5th

rank indicating that people are less reliable on bills.

208

Table No. 5.23: Mode of Transport Used by Respondents while Visiting Retail

Outlet.


Mode of

Transport

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

By two

wheeler 66 52.8 75 60.0 49 39.2 63 50.4 253 50.6

By car 26 20.8 20 16.0 18 14.4 21 16.8 85 17.0

By auto

rickshaw 18 14.4 16 12.8 16 12.8 16 12.8 66 13.2

By bus 8 6.4 6 4.8 24 19.2 9 7.2 47 9.4

By walk 7 5.6 8 6.4 18 14.4 16 12.8 49 9.8

Total 125 100 125 100 125 100 125 100 500 100

In order to reach the modern retail stores respondents follow different transport

facilities. This information was collected to understand need for parking facility at

Modern retail shop.

The above table shows the different modes of transport used by the respondents. 52.8 %

in Sangli, 60% in Solapur, 39.2 % in Satara and 50.4 % in Kolhapur city, respondents

are using two wheeler. About 20.8 % in Sangli, 16 % in Solapur, 14.4 % in Satara, 16.8

% in Kolhapur, respondents are coming by car. Overall it can be observed that majority

i.e. 50.6 % use two wheeler while coming for shopping. 17 % respondents come by car.

13.2 % of the respondents reaching retail outlets by auto rickshaw. Around 9.4 % are

coming by bus and 9.8 % come walking for shopping.

Mostly people use their own vehicles while shopping because it makes convenient to

carry goods purchased.

212

Table No. 5.24: Time Required Traveling to Retail Outlet.

Time Lees than

10min. 10 to 20 min. 20 to 30 min.

More than 30

min. Total

City Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Sangli 35 28.0 69 55.2 11 8.8 10 8.0 125 25

Solapur 44 35.2 51 40.8 25 20.0 5 4.0 125 25

Satara 30 24.0 58 46.4 20 16.0 17 13.6 125 25

Kolhapur 29 23.2 68 54.4 21 16.8 7 5.6 125 25

Total 138 27.6 246 49.2 77 15.4 39 7.8 500 100

The purpose for asking this question was to know whether people are willing to travel

for shopping or people from only neighborhood area shop at organized retail stores.

The table shows the time required for respondents to reach modern stores. It is

observed from the table that, 55.2 % in Sangli, 40.8 % in Solapur, 46.4 % in Satara and

54.4 % in Kolhapur, respondents are reaching the stores within 10 to 20 minutes. 28 %

in Sangli, 35.2 % in Solapur, 24 % in Satara, 29 % in Kolhapur, respondents are taking

less than 10 minutes to travel. 8.8 %, 20%, 16 % and 16.8 % respondents require 20 to

30 minutes whereas 8 %, 4 %, 13.6 % and 5.6 % respondents take more than 30 min.

respectively from Sangli, Solapur, Satara and Kolhapur while traveling to shopping.

Overall majority 49.2 % customers require 10 to 20 minutes, followed by 27.6 %

require less than 10 minutes, 15.4 % take 20 to 30 minutes and very few (7.8 %) come

from long distance because they take more than 30 minutes to travel.

It is good for retailer that people are ready to travel for more than 30 minutes also to

visit modern retail store.

213

Most of the respondents who enjoy parking space when they visit organized retail

outlet are happy with the service.

Table No.5.26: Opinion about ‘Outer Look of Retail Store Attracts Shoppers’


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Strongly

agree 44 35.2 43 34.4 49 39.2 30 24.0 166 33.2

Agree 52 41.6 62 49.6 66 52.8 78 62.4 258 51.6

Undecided 15 12.0 7 5.6 3 2.4 11 8.8 36 7.2

Disagree 12 9.6 9 7.2 4 3.2 5 4.0 30 6.0

Strongly

disagree 2 1.6 4 3.2 3 2.4 1 0.8 10 2.0

Total 125 100 125 100 125 100 125 100 500 100

Graph 5.57: Opinion on ‘Outer look of the building attracts Shoppers.’

0

10

20

30

40

50

60

70

StronglyAgree

Agree Undecided Disagree StronglyDisagree

Per

cent

age

Sangli Solapur Satara Kolhapur

Objective of knowing this opinion is to find out importance of outer look of the

building while selecting retail store for shopping.

217

The above table says that 41.6 % of the respondents from Sangli, 49.6 % from Solapur,

52.8 % from Satara and 62.4 % from Kolhapur have agreed that the outer look attracts

shoppers. 35.2 %, 34.4 %, 39.2 % and 24 % respectively from Sangli, Solapur, Satara

and Kolhapur agreed the same strongly. Overall it can be observed that, 51.6 % agree

and 33.02 % strongly agree that outer look of the building attracts shoppers. 7.32 % are

undecided and very few i.e. 8% disagree with that.

It can be revealed that ‘outer look of building’ is one of the important factors to be

considered by Organized Retailers.

Table No5.27: Effective Check- In and Check-Out System

Opinion Definitely

Yes Yes Can’t say No Total

City Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Sangli 88 70.4 33 26.4 3 2.4 1 0.8 125 25

Solapur 36 28.8 44 35.2 28 22.4 17 13.6 125 25

Satara 52 41.6 67 53.6 4 3.2 2 1.6 125 25

Kolhapur 34 27.2 74 59.2 8 6.4 9 7.2 125 25

Total 210 42.0 218 43.6 43 8.6 29 5.8 500 100

Graph 5.58: Opinion about Effective Check- In and Check-Out System

42.0%

43.6%

8.6%5.8%

Definitely Yes

Yes

Can't Say

No

218

Graph 5.59: Satisfaction with Price Charged

05

101520253035404550

DefinitelyYes

Yes Can't Say No DefinitelyNo

It is general feeling that price of good at modern retail formats is generally on higher

side. This question was asked to know satisfaction towards price.

Above table and graph shows that about 49.4 % i.e. majority of the respondents are

satisfied with the price charged on the items by the modern stores. 29.6 % are definitely

saying that they are satisfied with the price. However, about 5.6 % percent respondents

say no and only 2% fell that definitely they are not satisfied about the price.

For all four cities majority of the respondents are satisfied by the price factor of

organized retail shops.

Table No.5.31: Opinion about Price Level

Opinion Higher Satisfactory Less Total

City Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Sangli 12 9.6 92 73.6 21 16.8 125 25

Solapur 11 8.8 81 64.8 33 26.4 125 25

Satara 3 2.4 95 76.0 27 21.6 125 25

Kolhapur 6 4.8 76 60.8 43 34.4 125 25

Total 32 6.4 344 68.8 124 24.8 500 100

222

Graph 5.60: Opinion about Price Level

0

10

20

30

40

50

60

70

80P

erce

ntag

e

Higher Satisfactory Less

Sangli

Solapur

Satara

Kolhapur

Total

The intension was to know the feelings about price level at organized retail as

compared to others.

The above table and graph explains whether customers are satisfied with the price level

or not. 73.6 % of the respondents from Sangli, 64.8 % from Solapur, 76 % from Satara

and 608 % from Kolhapur and in total 68.8 % respondents are satisfied with the prices

charged by the retail shops. About 16.8 %, 26.4 %, 21.6 % and 34.4 % respondents

respectively from Sangli, Solapur, Satara and Kolhapur feel that price in organized

retail shops is less than others. Only 6.4 % of the customers feel that price charged by

retailers is on higher side.

There is satisfaction among customers regarding price level at modern retail shop.

223

Graph 5.62: Satisfaction with Schemes and Offers

0%

20%

40%

60%

80%

100%


Definitely No

No

Can't Say

Yes

DefinitelyYes

The purpose of asking this was to know whether customers are satisfied with the

schemes and offers given by Retailers.

In Sangli, about 34.4 % customers are definitely satisfied and 49.6 % are satisfied with

schemes offered by the stores. Only 3.2 % customers are not satisfied with the offers.

Respondents from Solapur also say that 52 % of them are satisfied and 28 % are

definitely satisfied, only 9.6 % are not satisfied with the offers. In Satara 58.4 % are

satisfied and 28.8 % are definitely satisfied. Only 8.8 % are not satisfied by the offers

and schemes. In Kolhapur city, 68.8 % are satisfied and 13.6 % are definitely satisfied

with the schemes offered.

The overall effect is respondents are satisfied with the schemes offered by Organized

Retailers.

227

Table No.5.35: Preference to Private Brands Introduced by Retail Shop


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Definitely

Yes 52 41.6 17 13.6 36 28.8 15 12.0 120 24.0

Yes 40 32.0 56 44.8 47 37.6 57 45.6 200 40.0

Can't say 8 6.4 17 13.6 2 1.6 9 7.2 36 7.2

No 19 15.2 29 23.2 27 21.6 40 32.0 115 23.0

Definitely

No 6 4.8 6 4.8 13 10.4 4 3.2 29 5.8

Total 125 100 125 100 125 100 125 100 500 100

Graph 5.63: Preference to Private Brands Introduced by Retail Shop

24.0%

40.0%

7.2%

23.0%

5.8%

Definitely YesYesCan't SayNoDefinitely No

The objective for collecting this information was to know that private brands are

accepted by customers or not.

228

definitely not purchased, 9.6 % have purchased and 2.8 % have definitely purchased

unknowingly outdated product. 12 % of the respondents could not say anything.

Overall no major findings about outdated products on shelf but still small proportion

also may spoil retailer’s performance.

Table No. 5.39: Whether Unlimited Assortment Creates Confusion


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Strongly

Agree 11 8.8 22 17.6 30 24.0 19 15.2 82 16.4

Agree 24 19.2 44 35.2 9 7.2 54 43.2 131 26.2

Undecided 44 35.2 16 12.8 21 16.8 23 18.4 104 20.8

Disagree 24 19.2 16 12.8 48 38.4 17 13.6 105 21.0

Strongly

Disagree 22 17.6 27 21.6 17 13.6 12 9.6 78 15.6

Total 125 100 125 100 125 100 125 100 500 100

Graph 5.65: Whether Unlimited Assortment Creates Confusion

16.4

26.2

20.8 21

15.6

0

5

10

15

20

25

30

StronglyAgree

Agree Undecided Disagree StronglyDisagree

Per

cent

age

232

There is variety of products available in modern retail stores. This unlimited assortment

whether confuses shoppers, was tried to find out this as advantage or disadvantage of

organized retail.

The above table and graph shows that overall 16.4 % customers strongly agree and 26.2

% respondents agree that unlimited assortment creates confusion while shopping. 20.8

% of the total respondents could not decide about it. 21 % respondents disagree and

15.6 % strongly disagree and they feel unlimited assortment does not create confusion.

Table No. 5.40: Opinion on ‘If Required Brand is not available’


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

No

response 1 0.8 3 2.4 0 0.0 0 0.0 4 0.8

Postpone

purchase 13 10.4 11 8.8 8 6.4 16 12.8 48 9.6

Select

substitute

brand

23 18.4 49 39.2 65 52.0 59 47.2 196 39.2

Go to

another

retailer

25 20.0 39 31.2 15 12.0 28 22.4 107 21.4

Depends

on type of

product

63 50.4 23 18.4 37 29.6 22 17.6 145 29.0

Total 125 100 125 100 125 100 125 100 500 100

233

Table No.5.42: Opinion about ‘Better Social Image because of Shopping at

Modern Retail Shop’


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Strongly

Agree 23 18.4 19 15.2 37 29.6 23 18.4 102 20.4

Agree 43 34.4 61 48.8 64 51.2 68 54.4 236 47.2

Undecided 28 22.4 27 21.6 12 9.6 13 10.4 80 16.0

Disagree 14 11.2 16 12.8 8 6.4 11 8.8 49 9.8

Strongly

Disagree 17 13.6 2 1.6 4 3.2 10 8.0 33 6.6

Total 125 100 125 100 125 100 125 100 500 100

Graph 5.67: Opinion about ‘Better Social Image because of Shopping at Modern

Retail Shop’ (Sangli)

From the above table and graph it is observed that, 34.4 percent of the customers

agreed that shopping at modern stores gives social image, 18.4 percent customers

strongly agreed the same.11.2 percent disagreed and 13.6 percent of the customers

strongly disagreed with this view.

237


Retail Shop’ (Solapur)

From the above table and graph it is observed that, around 48.4 percent of the

customers agreed that shopping at modern stores gives social image, 15.2 percent

customers strongly agreed the same.12.8 percent disagreed and 1.6 percent of the

customers strongly disagreed with this view.


Retail Shop’ (Satara)

From the above table and graph it is observed that 51.2% customers agreed that

shopping at modern stores gives social image, 29.6% customers strongly agreed the

same. Only 6.4% disagreed and 3.2% strongly disagreed.

238

(continued……from previous page)

Monthly

income/Amount

of Purchase

City More than Rs.5000 Rs.3001 to 5000 Rs.1001- 3000 Less than Rs.1000 Total

Frequency % Frequency % Frequency % Frequency % Frequency %

UptoRs.10000 1 100.00 1 33.33 25 41.67 34 55.74 61 48.8

Rs.10001-20000 0 0.00 0 0.00 28 46.67 22 36.07 50 40.0

Rs.20001-30000 0 0.00 1 33.33 5 8.33 1 1.64 7 4.6

Above Rs.30000 0 0.00 1 33.33 2 3.33 4 6.56 7 4.6

Total

Satara

1 100 3 100 60 100 61 100 125 100

UptoRs.10000 1

9.10 5 25.00 8 10.80 6 30.00 20 16.0

Rs.10001-20000 2 18.2 3 15.00 23 31.10 8 40.00 36 28.8

Rs.20001-30000 4 36.4 8 40.00 35 47.30 4 20.00 51 40.8

Above Rs.30000 4 36.4 4 20.00 8 10.80 2 10.00 18 14.4

Total

Kolhapur

11 100 20 100 74 100 20 100 125 100

Total 36 100 49 100 272 100 143 100

242

Ho: Monthly income and average amount of purchase are independent.

H1: Monthly income and average amount of purchase are not independent.

Analysis for Sangli

Critical value = 16.919

Chi-square value = 34.271 and d.f. = 9

At 5% level of significance at 9 d.f. the null hypothesis has been rejected because, the

calculated chi-square value is greater than the critical value. It is indicating that average

amount of purchase is dependent on monthly income.

From the table it is also observed that 50 percent of the customers belonging to above

Rs. 30,000 income group and 38.9 percentage customers having monthly income

Rs. 20001-Rs. 30,000 are spending more than Rs. 5000 on an average.

Analysis for Solapur



At 5% level of significance at 9 d.f. the null hypothesis has been accepted because, the

calculated chi-square value is less than the critical value. It is indicating that average

amount of purchase is independent of monthly income.

From the above cross table it is also observed that, the respondents’ whose amount of

purchase is less than Rs.1000 , 47.83 percent of the customers are belonging to income

group of Rs.10001 to 20000 , where as the respondents who are spending Rs.1000 to

3000, 44.83 percentage of the customers having same monthly income. Significantly,

the respondents who are spending more than Rs. 5000, 66.66 percent of the customers

are belong to monthly income of up to Rs. 10000 and Rs.10001 to 20000. When the

average amount of purchase is more than Rs.5000 there is only 16.67 percent of the

respondents is belonging to the income group of above Rs.30000. Thus, in Solapur, the

average amount of purchase and the monthly income of the respondents are

independent in nature.

Analysis for Satara



At 5% level of significance at 9 d.f, the null hypothesis has been accepted. It is

indicating that average amount of purchase is independent on monthly income.

243

Graph 5.74: Satisfaction about Lighting Arrangement (Satara)

From the above table and graph, it is observed that about 61% customers agreed that

they are satisfied about lighting arrangement, and 34.4% are saying “definitely yes”

indicating satisfaction about lighting. Only about 3% are not satisfied.

Graph 5.75: Satisfaction about Lighting Arrangement (Kolhapur)

From the above table and graph, it is observed that about 70% customers agreed that

they are satisfied about lighting arrangement, and 21% are saying “definitely yes”

indicating satisfaction about lighting.

247

Table No.5.47 Whether Signage Provided Sufficient and Informative


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Definitely

Yes 66 52.8 30 24.0 32 25.6 21 16.8 149 29.8

Yes 47 37.6 65 52.0 70 56.0 83 66.4 265 53.0

Can't say 5 4.0 7 5.6 6 4.8 3 2.4 21 4.2

No 3 2.4 20 16.0 10 8.0 13 10.4 46 9.2

Definitely

No 4 3.2 3 2.4 7 5.6 5 4.0 19 3.8

Total 125 100 125 100 125 100 125 100 500 100

The word ‘Signage’ means sign of identification, warning, or direction. About 52.8

percent customers from Sangli have agreed strongly and 37.6 percent also feel that

signage provided are sufficient and informative where as only about 5.6 percent

customers are not agreed with the same. In Solapur about 52 percent customers have

agreed and 24 percent have definitely agreed that signage provided are sufficient and

informative where as only about 2.4 percent customers have not agreed with the same

strongly. From Satara city, 81.6 %customers agreed that signage provided is sufficient

and informative where as only about 13.6 % customers are not agreed with the same.

From Kolhapur, 83.2 % agree and 14.4 % do not agree that light is sufficient. Overall it

can be seen that, 53 % say ‘Yes’, 29.8 % say ‘Definitely Yes’, whereas 13 % say ‘No’

for satisfaction towards sufficient lighting arrangement.

248

Table No.5.49: Style of Shopping


Opinion Freque

ncy %

Freque

ncy %

Freque

ncy %

Freque

ncy %

Freque

ncy %

Purchase the things in list 21 16.8 16 12.8 7 5.6 13 10.4 57 11.4

In addition to things listed

purchase many things 27 21.6 29 23.2 36 28.8 51 40.8 143 28.6

Decide products to purchase

with the help of displays 25 20.0 38 30.4 41 32.8 27 21.6 131 26.2

Like to save time while

purchasing 17 13.6 25 20.0 20 16.0 20 16.0 82 16.4

Like to enjoy shopping while

going through all shelves with

ample time

35 28.0 17 13.6 21 16.8 14 11.2 87 17.4

Total 125 100 125 100 125 100 125 100 500 100

252

Graph 5.80: Style of Shopping

11.4%

28.6%

26.2%

16.4%

17.4%

Purchase things in list

In addition to thing listedpurchase many things

Decide product topurchase with the help ofdisplay

Like to save time whilepurchasing

Like to enjoy Shoppingwith ample time

From the table and graph, it is observed that about 11.4 % percent purchase the things

in list, majority i.e. 28.6 percent customers purchasing more items than the list they

prepared, about 26.2 percent customers decides what to purchase with the help of

display, 16.4 percent customers are visiting to save time while purchasing and 17.4

percent of the customers enjoy shopping while going through all shelves. Majority of

the respondents from Sangli (28%) like to enjoy shopping while going through all

shelves with ample time. In Solapur majority of the respondents from Solapur (30.4 %)

and Satara (32.8 %) decide products to be purchased with the help of displays. In case

of Kolhapur, majority (40.8 %) purchase many things in addition to the things listed.

This makes clear that most of the people enjoy shopping activity.

253

Table No. 5.53: Whether Products in Small Quantity Are Available


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Definitely

Yes 38 30.4 24 19.2 15 12.0 15 12.0 92 18.4

Yes 57 45.6 55 44.0 56 44.8 67 53.6 235 47.0

Can't say 16 12.8 16 12.8 22 17.6 18 14.4 72 14.4

No 8 6.4 15 12.0 7 5.6 10 8.0 40 8.0

Definitely

No 6 4.8 15 12.0 25 20.0 15 12.0 61 12.2

Total 125 100 125 100 125 100 125 100 500 100

From the above table, it is observed that about 76 percent of the customers in Sangli,

63.2 % in Solapur, 66.8 % in Satara and 65.6 % in Kolhapur have agreed that they are

getting adequate small size and volume of items as per the requirement. However, 10.2

percent customers from Sangli, 24 % from Solapur, 25.6 % from Satara and 20 % from

Kolhapur have not agreed with the same. Overall it can be observed that 18.4 %

definitely say ‘yes’ and 47 % also feel that they get adequate small size and volume of

items as per the requirement. 8 % feel they do not and 12.2 % say that definitely they

do not get adequate small size and volume of items as per the requirement. Only 14.4 %

customers have failed to give any opinion.

257

Table No. 5.54: Whether Products in Large Quantity Are Available


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Definitely

Yes 48 38.4 19 15.2 13 10.4 21 16.8 101 20.2

Yes 48 38.4 53 42.4 52 41.6 57 45.6 210 42.0

Can't say 16 12.8 19 15.2 23 18.4 20 16.0 78 15.6

No 6 4.8 16 12.8 11 8.8 14 11.2 47 9.4

Definitely

No 7 5.6 18 14.4 26 20.8 13 10.4 64 12.8

Total 125 100 125 100 125 100 125 100 500 100

From the above table, it is observed that about 76.8 % of the customers from Sangli,

67.6 % from Solapur, 52 % from Satara and 62.4 % from Kolhapur have agreed that,

whenever they want items in large quantity, they are getting in adequate size and

volume of items. 10.4 % respondents from Sangli, 27.2 % respondents from Solapur,

29.6 % from Satara and 21.6 % from Kolhapur feel that they do not get items in large

quantity whenever they require it. Out of total respondents 20.2 % say ‘Definitely yes’

that they get items in large quantity, 42 % also agreed that whenever they require they

get items in large quantity. 9.4 % do not and 12.8 5 definitely do not get items in large

quantity whenever required.

258

Table No. 5.58: Opinion about Space for Movement between Shelves


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Completely

satisfied 72 57.6 62 49.6 37 29.6 31 24.8 202 40.4

Satisfied 43 34.4 38 30.4 50 40.0 70 56.0 201 40.2

Can't say 1 0.8 5 4.0 7 5.6 2 1.6 15 3.0

Dissatisfied 8 6.4 17 13.6 23 18.4 21 16.8 49 9.8

Completely

dissatisfied 1 0.8 3 2.4 8 6.4 1 0.8 13 2.6

Total 125 100 125 100 125 100 125 100 500 100

The above statistics clearly states that, 57.6 %, 49.6 %, 29.6 %, and 24.8 % of the

respondents from Sangli. Solapur, Satara and Kolhapur are completely satisfied with

the space provided for the movement between the shelves in the retail outlets. It can be

also seen that 34.4 %, 30.4 %, 40 % and 56 % are satisfied. Only 7.2 %, 16 %, 24.8 %

and 17.6 % of the respondents respectively are not satisfied with same. In all 40.4 are

completely satisfied, 40.2 % are satisfied and 12.4 % are dissatisfied with the space

provided for movement in retail outlets. Only 3 % respondents could not say anything.

262

Table No. 5.59: Feeling of Purchasing Unnecessary Items


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Very

frequently 16 12.8 27 21.6 14 11.2 16 12.8 73 14.6

Frequently 12 9.6 20 16.0 6 4.8 18 14.4 56 11.2

Sometimes 34 27.2 25 20.0 41 32.8 28 22.4 128 25.6

No 17 13.6 24 19.2 28 22.4 20 16.0 89 17.8

Never 46 36.8 29 23.2 36 28.8 43 34.4 154 30.8

Total 125 100 125 100 125 100 125 100 500 100

Graph 5.82: Feeling of Purchasing Unnecessary Items

14.6%

11.2%

25.6%17.8%

30.8% Very Frequently

Frequently

Sometimes

No

Never

Sometimes there can be unnecessary purchase of items while shopping in the modern

outlets. So this question is asked to the respondents to know in this regard. Majority

respondents have opined that they never felt about purchasing of unnecessary items in

the retail outlets (48.6 percent). 25.6 percent of the respondents felt that they sometimes

purchased unnecessary items in the retail outlets and 25.8 percent of the respondents

felt that they frequently purchases unnecessary items while shopping in retail outlets.

263

From the table it is clear that, majority customers filed complaint but they were not able

to give information on the same. But there is significant part of the respondents who

have filed complaints on poor customer service, poor quality of the cloths and

electronic items. Remaining respondents have filed complaints on billing procedures,

quality of the fruits and vegetables and unavailability of the required products in the

outlet. It can be observed that majority of the complaints are regarding delay and

mistakes in billing. Some customers have complained regarding poor quality of fruits,

vegetables and food items. Some have also complained regarding no complaint box as

well as no free gifts.

Table No. 5.63: Provision of Hassle Free Complaint Handling


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Definitely

Yes 8 6.4 21 16.8 33 26.4 20 16.0 82 16.4

Yes 38 30.4 52 41.6 26 20.8 65 52.0 181 36.2

Can't say 69 55.2 43 34.4 61 48.8 34 27.2 207 41.4

No 10 8.0 5 4.0 3 2.4 5 4.0 23 4.6

Definitely

No 0 0.0 4 3.2 2 1.6 1 0.8 7 1.4

Total 125 100 125 100 125 100 125 100 500 100

From the analysis it has been observed that, 36.8 % of the respondents from Sangli,

58.4 % from Solapur, 47.2 % from Satara and 68 % from Kolhapur have opined that

the retail outlets have hassle free complaint handling arrangement. Only 8 %, 7.2 %, 4

% and 4.8 % respectively from Sangli, Solapur, Satara and Kolhapur have opined the

outlets don’t have hassle free complaint handling arrangement in the outlets. Overall

41.4 % could not comment anything, 52.6 % feel that complaint handling by retail

outlets is hassle free whereas only 6 % said it is not hassle free.

267

Table No. 5.64: Efficient Customer Help Desk Handling


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Strongly

agree 25 20.0 46 36.8 50 40.0 27 21.6 148 29.6

Agree 52 41.6 53 42.4 44 35.2 77 61.6 226 45.2

Undecided 44 35.2 19 15.2 28 22.4 18 14.4 109 21.8

Disagree 4 3.2 7 5.6 3 2.4 3 2.4 17 3.4

Total 125 100 125 100 125 100 125 100 500 100

Customer Help Desk is provision made by retailer to help customer to solve their

problems and help them while buying. It also handles enquiries. The analysis made by

the researcher reveals that, majority respondents 41.6 % from Sangli, 42.4 % from

Solapur, 35.2 % from Satara and 61.6 % from Kolhapur have agreed that customer

help desk handling is efficient in these outlets and 20 %, 36.8 %, 10 % and 21.6 %

respectively have strongly agreed the same. Only 3.2 %, 5.6 %, 2.4 % and 20.4 % of

the respondents have disagreed with the efficiency of the outlet regarding customers

help desk. Overall 45.2 % have agreed that customer help desk handling is

efficient.29.6 % strongly agree with efficient handling of customer help desk. Only 3.4

% disagree with the above statement and 21.8 % remain undecided.

268

Table No. 5.68: Changing Room Facility at Apparel Section


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Definitely

Yes 39 31.2 59 47.2 68 54.4 41 32.8 207 41.4

Yes 56 44.8 50 40 51 40.8 69 55.2 226 45.2

Can't say 21 16.8 11 8.8 0 0.0 14 11.2 46 9.2

No 8 6.4 4 3.2 6 4.8 1 0.8 19 3.8

Definitely

No 1 0.8 1 0.8 0 0.0 0 0.0 1 0.2

Total 125 100 125 100 125 100 125 100 500 100

This question is to know about the changing room facility provided by the retailers. In

Sangli 76 % of the customers revealed that the retailers have provided the changing

room facility at apparel section, 7 % of the customers revealed that there is no changing

room facility in the apparel section of the retail outlets. In Solapur, 87.2 % customers

say yes and only 4 % say no for the changing room facility provided in Apparel section.

The data from Satara shows that 95.2 % customers agree that changing room facility is

provided and only 0.8 % disagree about it. In Kolhapur city, 88 % are saying that

changing room is provided and only 0.8 % said it is not. Overall 86.6 % of the

respondents agree that changing room facility is provided at apparel section at modern

retail outlet.

272

Table No. 5.69: Satisfaction about Size and Location of Entrance


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Completely

Satisfied 89 71.2 68 54.4 38 30.4 46 36.8 241 48.2

Satisfied 30 24 39 31.2 59 47.2 66 52.8 194 38.8

Can't say 2 1.6 1 0.8 1 0.8 2 1.6 6 1.2

Dissatisfied 3 2.4 14 11.2 16 12.8 11 8.8 44 8.8

Completely

Dissatisfied 1 0.8 3 2.4 11 8.8 0 0.0 15 3.0

Total 125 100 125 100 125 100 125 100 500 100

In order to make customer more convenient while shopping and for free movement of

the customers the entrance gate size and location is important. Results reveals that 71.2

% of the customers from Sangli, 54.4 % from Solapur, 30.4 % from Satara and 36.8 %

from Kolhapur are completely satisfied with the size and location of the entrance gate

at different retail outlets.24 %, 31.2 % 47.2 % and 52.8 % respectively from Sangli,

Solapur, Satara and Kolhapur, respondents are satisfied with location and size of

entrance. Only 3 %, 13.6 %, 21.6 % and 8.8 % of the respondents are dissatisfied with

the same. Overall 87 % are satisfied and 11.8 % of the respondents are dissatisfied with

size and location of entrance.

273

Table No. 5.73: Whether Testing Of Electrical/ Electronic Goods before Selling

Done


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Definitely

Yes 47 37.6 32 25.6 44 35.2 23 18.4 146 29.2

Yes 46 36.8 53 42.4 51 40.8 74 59.2 224 44.8

Can't say 30 24 36 28.8 30 24.0 28 22.4 124 24.8

No 2 1.6 3 2.4 0 0.0 0 0.0 5 1.0

Definitely

No 0 0.0 1 0.8 0 0.0 0 0.0 1 0.2

Total 125 100 125 100 125 100 125 100 500 100

This question is intended to know whether electronic, electrical products are being

tested at Modern Retail Shop before selling. In Sangli majority customers 37.6 percent

said definitely yes in this regard, 36.8 percent of them said yes and only 1.6 percent of

them said no to the same. In Solapur, majority customers 42.4 percent said yes in this

regard, 25.6 percent of them said definitely yes and only 0.8 percent of them said

definitely no to the same. A significant part of the customers are indeterminate in this

regard (around 29 percent). In Satara about 35% strongly agreed, and 41% agreed that

the stores testing the functioning of electrical and electronic items before selling. In

Kolhapur, about 18.4% strongly agreed, and 59.2% agreed that the stores testing the

functioning of electrical and electronic items before selling.

277

Table No. 5.74: Attractive Store by Considering It’s Decor


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Definitely

Yes 22 17.6 35 28 49 39.2 33 26.4 139 27.8

Yes 86 68.8 60 48 55 44.0 78 62.4 279 55.8

Can't say 9 7.2 11 8.8 5 4.0 2 1.6 27 5.4

No 5 4 14 11.2 13 10.4 12 9.6 44 8.8

Definitely

No 3 2.4 5 4 3 2.4 0 0.0 11 2.5

Total 125 100 125 100 125 100 125 100 500 100

Attractiveness of the store is determined by outer look as well as inside arrangement

and decoration. By considering the décor, from Sangli, 69 percent of the customers

opined that this retail outlet is attractive only 2.4 percent of the customers said

definitely no to the same. In Solapur 76 percent of the customers opined that this retail

outlet is attractive only 15.6 percent of the customers said no. Regarding store

decoration in Satara, 39.2% strongly agreed, and 44% agreed that the store decoration

is attractive, whereas about 13% not agreed. From Kolhapur, 26.4% strongly agreed,

and 62.4% agreed that the store decoration is attractive, whereas about 10% not agreed.

In all majority is shown by 55.8 % saying yes and then 27.8 % saying definitely yes for

attractiveness by considering décor. Only 11.3 % does not agree with the above.

278

Table No.5.78: Liking About Trying New Retail Outlets


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Definitely

Yes 67 53.6 64 51.2 65 52.0 68 54.4 265 52.8

Yes 33 26.4 43 34.4 53 42.4 46 36.8 175 35.0

Can't say 9 7.2 12 9.6 4 3.2 4 3.2 29 5.8

No 14 11.2 4 3.2 3 2.4 7 5.6 28 5.6

Definitely

No 2 1.6 2 1.6 0 0.0 0 0.0 4 0.8

Total 125 100 125 100 125 100 125 100 500 100

Graph 5.84: Liking About Trying New Retail Outlets

52.8%

35.0%

5.8%5.6%0.8%

Definitely Yes

Yes

Can't sayNo

Definitely No

The present question emphasizes on the customers’ attitude about trying new retail

outlets. Form the analysis it has been observed that majority customers 53.6 % from

Sangli, 51.2 % from Solapur, 52 % from Satara and 54.4 % from Kolhapur said

definitely yes and 26.4 %, 34.4 %, 42.4 % and 36.8 % from respective cities said they

are interested in trying new retail outlets. Only 12.8 %, 4.8 %, 2.4 % and 5.6 %

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respectively are not interested in trying new retail outlets. The overall analysis about

this factor shows that majority of the respondents i.e. 52.8 % are very much interested

followed by 35 % who will like to try new retail outlet. 5.6 % are not interested, only

0.8 % will not like to try new retail outlet. 5.8 % respondents did not give any opinion.

Table No. 5.79: Opinion about liking of Big Retailers’ entry


Opinion Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Frequ

ency %

Definitely

Yes 96 76.8 72 57.6 75 60.0 76 60.8 319 63.8

Yes 26 20.8 44 35.2 42 33.6 42 33.6 154 30.8

Can't say 3 2.4 6 4.8 8 6.4 7 5.6 24 4.8

No 0 0.0 3 2.4 0 0.0 0 0.0 3 0.6

Total 125 100 125 100 125 100 125 100 500 100

Graph 5.85: Opinion about liking of Big Retailers’ entry

76.8

20.8

2.4

57.6

35.2

4.82.4

60

33.6

6.4

60.8

33.6

5.6

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


NoCan't SayYesDefinitely Yes

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Table No.5.82: Type of Ownership

Type of ownership Frequency Percent

Sole proprietorship 22 62.9

Partnership 2 5.7

Family owned 10 28.6

Any other 1 2.9

Total 35 100

Graph 5.88: Type of Ownership

The above graphical and statistical presentations reveling that, the type of ownership by

majority of the small retailers is sole proprietorship. There are 63 percent of the

retailers are sole proprietors and very less are having partnership i.e. 6 percent.

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Table No. 5.83: Type of Shops

Type of Shop Frequency Percent

Grocery shop 10 28.6

Stationary shop 2 5.7

Cloth shop 7 20

Electronics shop 3 8.6

Gift articles shop 2 5.7

General stores 4 11.4

Any other 7 20

Total 35 100

Graph 5.89: Type of Shops

From the above graph it can be said that, 28.6percent of the retailers are running

grocery shops, 20 percent are having cloth business, and 8.6percent are having

electronic shops.

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Table No. 5.87: Any Adverse Impact on Business because of Modern Retailers

Opinion Frequency Percent

Yes 13 37.1

No 22 62.9

Total 35 100

When this question is asked to traditional retailers, around 63 percent of the retailers

have opined that there is no adverse impact on their business because of the modern

retail outlets. Only 37.1 percent of the retailers agreed that they are seeing adverse

impact on their business due to entry of modern retailers.

Table No. 5.88: Amount of Negative Impact on Profit of Business

Negative Impact Frequency Percent

Up to 5 percent 8 61.54

Up 5 to 10 percent 4 30.77

More than 15 percent 1 7.69

Total 13 100

As it is clear from earlier table about opinion about impact of modern retails on

traditional retails, 13 respondents have agreed this. Out of this, 61.54 percent of the

retailers have opined that there is impact up to 5 percent on their business, 30.77

percent said 5 to 10 percent and only 7.69 percent said that there impact of more than

15 percent.

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Table No.5.89: Opinion about Impact on Volume of Business


Definitely yes 9 25.7

Yes 5 14.3

Can't say 2 5.7

No 12 34.3

Definitely no 7 20

Total 35 100

As we are clear from earlier table about impact on business, this question deals with

impact of modern retails in terms of volume on traditional retails. From the above table

it is clear that, 34.3 percent of the respondents have said that there is no impact of

modern retails on volume of business. A significant part of the respondent said that

there is impact on their volume of business by modern retails (25.7 percent).

Table No.5.90: Opinion on ‘Entry of Big Retailers has Made Negative Impact on

Profit’


Strongly agree 7 20

Agree 6 17.1

Undecided 5 14.3

Disagree 10 28.6

Strongly disagree 7 20

Total 35 100

From the above given table it is clear that, 28.6 percent of the respondents have

disagreed with this question that entry of big retailers has made negative impact on

profit. 20 percent of the respondents have strongly disagreed with the same and another

20 percent of the respondents have strongly agreed that there is negative impact on their

profits because of entry of big retailers in the market.

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Table No.5.94: Rank of the Benefits for Which Customers Prefers Small Shop.

Credit Home

delivery

Convenient

Timing

Loose

items available Reliability

Rank Freq. % Freq. % Freq. % Freq. % Freq. %

1 2 5.71 2 5.71 0 0.00 7 20.00 24 68.57

2 13 37.14 4 11.43 10 28.57 3 8.57 5 14.29

3 10 28.57 4 11.43 5 14.29 12 34.29 4 11.43

4 4 11.43 15 42.86 8 22.86 6 17.14 2 5.71

5 6 17.14 10 28.57 12 34.29 7 20.00 0 0.00

The present question is asked to the traditional retailers to rank the given benefits in

order to know why the customers come to traditional retails. Regarding credit

allowance, majority retailers given 2nd rank and very few 5.7 percent of the respondents

have give rank 1 to the same. Regarding home delivery majority respondents 48.26

percent have given rank 6. The timings of the store gained fifth rank with

34.29percenet, availability of loose items in the traditional stores given rank 3 (34.29

percent) and reliability of the traditional stores given first rank by 68.57 percent of the

respondents.

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Table No.5.95: Different Changes Made in Outlook of the Shop to Match the

Competition

Change Frequency Percent

No change 12 33.4

Display, models 8 22.8

Attractive shelves, packaging 6 17.1

Modern look 5 14.3

Furniture 2 5.7

Interior decoration, showcase 1 2.9

Telephonic order, home delivery 1 2.9

Total 35 100

The present question intends to know about the changes made by the traditional

retailers to match with organized modern retailers. 33.4 percent of the traditional

retailers have not made any changes in the outlook of the store. Remaining made

changes like providing attractive shelves, display and models (22.8 percent), attractive

shelves and packaging (17.1 percent), giving modern look to shop (14.3 percent) new

furniture ( 5.7 percent), interior decoration ( 2.9 percent) , telephonic orders and home

delivery(2.9 percent) etc. to compete with the competition .

Table No. 5.96: Changes in Storage of Products to Suit the Competition

Change Frequency Percent

No changes 25 71.5

Maximum display 3 8.6

Neat and proper storage 2 5.7

Glass shelves 1 2.9

More products 1 2.9

More variety 1 2.9

Packing and storage 1 2.9

Showcase 1 2.9

Total 35 100

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Table No.5.101: Whether Allowing Your Next Generation to Come in this

Business


Yes 23 65.7

No 10 28.6

Can't say 2 5.7

Total 35 100

Majority of the traditional retailers said that they allow next generation to come in this

business with 65.7 percent and 28.6 percent are not interested to allow their next

generation to this business.

Table No. 5.102: Opinion on Making Changes in Business to Keep With Recent

Times


Yes 25 71.4

No 5 14.3

Can't say 5 14.3

Total 35 100

The above given table clears that 71.4 percent of the traditional retailers are making

changes in their business to keep with the recent times and there are only 14.3 percent

who are not in the pace.

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Table No.103: Strengths of Modern Retailing

Strength Frequency Percent

One stop shop 6 17.2

Attractive offers 4 11.4

Discounted rates 4 11.4

Many products, offers, variety 4 11.4

More space, attractive display 4 11.4

No response 2 5.7

Modern facilities, shelve, trolleys 2 5.7

Big size, promotion options 2 5.7

Bulk purchase 2 5.7

Shopping enjoyment 2 5.7

Huge Display, heavy discounts 2 5.7

Huge Infrastructure 1 2.9

Total 35 100

The present question is asked to the traditional retailers to check the strengths of

Organized Retailing according to them. It is observed form the analysis that the main

strengths of the modern retailers is, many things are available at one place, i.e. ‘One

stop Shop’. 17.2 % of the small retailers have given choice about that. 11.4 % retailers

have given preference for factors like attractive offers, discount, variety and display.

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Chapter –VI

Findings and Suggestions

Section – I: Consumer Behaviour - Organized Retail

1. Demographic Profile of Shoppers –

1) It has been found that there is majority of Male Shoppers (71.8%) than Female

shoppers (28.2%) visiting to modern retail stores in all four cities of Western

Maharashtra namely - Sangli, Solapur, Satara and Kolhapur.

2) Educational level of the shoppers is satisfactory from point of view of

communication and understanding during shopping activity. Most of the

customers are graduates (50.2%) and 21.4 % are post-graduates.

3) Majority of the customers (42.6%) belongs to young group from 21 to 30 years.

This is an opportunity because young customers can be convinced easily and

they like shopping activity.

4) Most of the respondents (44.8 %) are employed and 26.4 % are having their

own businesses. Most of the customers are married (58.6%) which means there

are chances that they might be purchasing items in food and non-food category.

5) It is found that major chunk of customers belong to nuclear family where needs

of family members are different. They purchase frequently but in small

quantity.

6) It can be seen from data analysis that from Sangli (37.6 %), Solapur (43.2 %)

majority of the respondents has monthly income between Rs. 10001 to 20000

and in Kolhapur (40.8 %) majority respondents show monthly income between

Rs. 20001 to 30000. In case of Satara (48.8 %) majority customers’ monthly

income is below Rs. 10000.

2. Purchasing Prior to Organized Retail Stores –

1) It is found that prior to modern retail outlets, majority of the respondents (56.8

%) were purchasing from particular shop only.

2) Significant percentage of buyers i.e. 76 % still go to Kirana shops for

purchasing items. They purchase from Organized Retail Shop as well as small

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Kirana shop. When things are needed in urgency, people may not go to

hypermarket or Shopping mall for some tiny purchases. They prefer nearby

shop for such purchases. Thus it can be said that traditional retailing is an

integral part of Indian retail.

3) 85.3 % of the customers usually purchase food items from Kirana Shops. Most

of the customers (20.2%) prefer to buy from Kirana shop because of ‘Good and

Reliable Quality’. 7.4 % customers go to Kirana shop because it is nearby

home, sometimes because Shopkeeper provides home delivery and they have

good relation with customers.

4) It has been found that, 42.4 % of the respondents still spend Rs. 500 to 1000 on

purchases from Kirana Shop and 37.9 % spend less than Rs. 500 monthly. 31.4

% customers visit Modern Retail outlet to get discount on purchases, 29.2 %

have shifted to modern retail shop because of ‘One stop shop’ Model. This may

benefit by saving time in traveling while going from shop to shop for various

categories.

3. Shopping at Organized Retail Format –

1) In Sangli ‘Big Bazaar’ is most preferred and then ‘D-Mart’. In Solapur ‘D-

Mart’ and in Satara preference is given to ‘Vishal Mega Mart’. In Kolhapur,

customers have given same preference to ‘Big Bazaar’ as well as ‘D-Mart’.

2) It is found that most of the shoppers (39.8%) shop once in a month and 27.4 %

shop 2 to 3 times in a month.

3) It is clear that there is more demand for personal care products then food and

grocery, then home care and clothing.

4) Majority of the respondents (52.2%) shop regularly in Modern Retail Shops and

34.8 % visit for special shopping. This brings out the fact that customers like to

shop regularly in Organized Retail formats.

5) Respondents from all three cities – Sangli, Satara and Kolhapur have allotted

first rank to ‘Saves Money’ as benefit while shopping in Modern Retail format.

In Solapur 44.5 % of the respondents have preferred ‘Time saving’ factor as

first rank on benefits of Organized Retail.

6) Monthly expenditure on Purchase from Modern Retail is up to Rs. 1000 by

maximum (40 %) customers and 36.4 % spend between Rs. 1001 to 2000

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monthly on shopping from Organized Retails. Majority of the Organized Retail

Formats which are existing in selected four cities belong to Discount Stores and

shoppers prefer to shop with discounted rates.

7) It is clear that customers choose to shop in Modern Retail outlet because it is

‘One Stop Shop’ model because they have opined that ‘We get what we

require’.

8) Respondents have given first preference to ‘Discounts and offers’ while they

rank reliability of the Organized Retailer. Second preference has been allotted to

‘Availability of Product’.

4. Buying Behaviour

1) It has been found that maximum number of customers (50.6 %) come by two

wheelers followed by 17 % coming by cars. Majority of the customers visit on

their own vehicles. This trend is also regarded as ‘Shopping basket on wheels’.

2) Major chunk of respondents (49.2 %) travel for 10 to 20 minutes while visiting

Modern Retail Shop for Shopping. 27.6 % of the customers take 10 minutes or

less for coming to Shop from their place to Organized Retail Store.

3) 84.8 % of the respondents agree that ‘Outer look of the building attracts’.

Therefore for retailers outlook of the retail format is very important from point

of view of attracting customers. Outer display helps to remind customers

regarding shopping.

4) It is observed that 86.6 % of the customers feel that billing counters are

sufficient. Insufficient billing counters may lead to unnecessary queue and

wastage of time. 91 % of the respondents feel that price is clearly mentioned on

the products. In case of EDLP (Every Day Low Price) format price must be

updated frequently.

5) It is seen that major portion of the response (67.4 %) agrees that, shopping in

modern retail outlets adds to get better social image. It can be prestige point for

customers to shop in modern retail outlets than purchasing from Kirana shop.

6) If ‘Brand Loyalty’ of the buyers is checked then it is clear that 53.2 % of the

customers go on shifting brand to avail promotional offer and discount. 24 % of

the customers always like to try new products and 22.6 % are sticking to one

brand while purchasing products.

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7) Average amount of purchase in modern retails and monthly income are

dependent at Sangli and Kolhapur. This means as income increases

automatically expenditure on purchases at modern retails increases. Other two

cities Satara and Solapur bring out the fact that average amount of purchase and

monthly income are independent.

8) It is found that majority of the respondents (54.4 %) make monthly purchases

from Modern Shops worth between Rs. 1001 to 3000. This can be the average

amount of expenditure on food and non food items by generally middle class

customers especially with nuclear type of families.

5. Customer Satisfaction -

1) It is found that around 30 % of the respondents are totally satisfied with the

price charged by retailers and around 50 % of the respondents are happy with

the prices of products at organized retail store. 68.8 % of the customers are

satisfied with the level of price charged by modern retailers.

2) Approximately 10 % of the respondents have paid more frequently and around

20 % of the respondents sometimes have paid more than others for particular

item. This may be harmful for performance of Organized Retailer.

3) Approximately 70 % of the respondents are aware about offers by Retailers. It is

seen that 83.4 % of the respondents are satisfied with the promotional offers and

remaining; those who are not satisfied, the reasons shall be traced out.

4) Regarding experience about inferior quality of products, 26.9 % customers have

agreed that they frequently experience it. These types of experiences will make

customers to think of shifting to another retailer.

5) Very few (12.4%) customers said that they purchased outdated products

unknowingly. This means that proper inventory management and shelf

supervision is lacking in some cases.

6) It is found that 89 % of the customers are satisfied with the billing procedure.

Billing procedure is computerized and with use of bar coding system.

6. Private Labels

1) It is found that 24 % of the respondents surely prefer ‘Private Label’ by retailers

and 40 % prefer to buy. Private Labels are the brands introduced by Retailer as

317

one of the part in ‘Backward Integration’. This helps retailer to enjoy more margin

by competing with manufacturer’s brands.

2) Only 18.4 % of the customers feel that quality of ‘Private Label’ is ‘Very Good’

and majority (45.3 %) say it is ‘Good’. There is tough competition from Popular

Brands, therefore retailers need to be very keen regarding quality of these

products, because they need to divert customers from the brands that customers

is familiar with, towards a new brand.

7. Merchandise Management –

1) ‘Unlimited assortment’ term refers to too many products and brands availability

in particular range of product. It can be difficult for a buyer to decide one

product which is most suitable for him/her out of large variety of the products.

16.4 % customers strongly agree and 26.2 % agree that ‘unlimited assortment

creates confusion while purchasing.

2) It is found that if required brand is not available with retailer then most of the

customers (39.2 %) prefer to purchase substitute brand. 29.4 % customers have

said that they decide depending on type of the product they purchase. For

products like cosmetics, apparels etc. people may change brands easily. But

electronic appliances or food products etc. customers may not go for substitute

brand. This might be the reason for 21.4 % customers who go to another retailer

for same brand.

3) It is found that 88 % of the respondents agree that ‘Product display reminds of

purchasing it’. It is the general trend while shopping in modern retail formats

that buyer while going through all sections purchase as they remind of their

need. This is the most important part of ‘Merchandise management’.

4) It is found that majority (28.6 %) said that they always purchase many things in

addition to the listed requirements. 26.2 % of the respondents decide products to

purchase with the help of displays. 17.4 % respondents like to enjoy shopping

while going through all the shelves with ample time. This means for these

differentiating styles of shopping than traditional retailing, people visit and get

such benefits of modern retails.

318

8. Shopping Environment –

1) Store environment is the total combined effect of lighting, ventilation, noise,

cleanliness, housekeeping etc. 89.4 % of the respondents are satisfied with the

store environment provided by retailer.

2) It has been found that 93.4 % of the customers are satisfied with the lighting

arrangement inside modern retail store. Generally modern retailers take care of

this factor of lighting and illumination because they need to create perfect

shopping environment for their customers which results in attracting customers

towards various categories of products.

3) 82.8 % of the respondents agree that signage provided by the retailers is

sufficient and informative. Various types of information have to be given by

retailers – directions, facilities like parking, washrooms, enquiry, customer

support etc. In addition to this product categories and sections are important for

new customers.

4) It is observed that 92.6% customers are happy with comfort while shopping

because of arrangement of shelves and racks. In modern retail outlets

customers self help to handle and select products. This is the reason that

comfortable arrangement of shelves and racks is necessary.

5) Opinion about space for movement is also one of the crucial factors while

considering shopping environment. Congested arrangement results in problems

and uncomfortable feeling while moving between shelves. Around 80 % of the

respondents are satisfied with the arrangement of racks and shelves.

6) It is found that, 30.4 percent of the customers have strongly agreed and 32

percent agreed that congested areas can harass, frustrate and injure the

customers while moving in the retail outlets.

7) Signages give information to shoppers regarding directions, various sections,

offers and schemes etc. 41.8 % of the customers felt that organizational,

location; category and promotional signage provide them required information.

28.8 % definitely say that signage provide needed information.

8) Attractiveness of the store makes customers feel good while shopping. It is

found that 83.6 % of the customers are satisfied with attractiveness of the store

while considering store décor.

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9. Category Management -

1) Regarding availability of fresh vegetables in organized retail formats, 46.6 %

respondents are happy with it. This is also important consideration from the

point of view of category management by organized retailers. Customers

generally become happy on getting all categories available at one place.

2) In case of food items, those are to be preserved properly. 68 % customers feel

that retailers preserve those properly. If food products like fruits and vegetables,

milk and milk products, ready to eat products, not preserved properly then those

get spoiled. This may result in disappointment of customers as well as loss for

retailers.

3) It is observed that most of the customers (73.4%) are happy with sufficient

cooling of cold-drinks. This means that retailers have made proper arrangement

of cooling.

4) In Organized Retail stores generally products like grocery items are available in

packing only. But sometimes customers need small quantity and that size

packing may not be available. But 65.4 % customers are happy with that aspect

and say that they get small packs as per their requirement.

5) Similarly some customers with large family size or occasionally may require to

purchase in large quantity and retailer may have limited sizes of packs. Buyers

also expect discount on purchase of large quantity. But 62.2 % of the

respondents are happy with the availability of the products in large quantity.

6) In Organized Retail Chain Stores there are many product categories made

available and all those should be properly displayed. Area provided for each

category should be sufficient to avoid mess in arrangement. 85.4 % of the

respondents are happy with the allotted area for each product category.

10. Customer Service -

1) In Organized retail chain stores, mostly sales attendants are available for

assisting buyers while searching and choosing correct products. This is also a

unique feature of organized retail so that buyers save their time and energy

while searching for the products. It is seen that 12 % of the respondents very

frequently get help from sales attendants. 34.2 % frequently and 27.4 %

respondents sometimes get help from sales attendants.

320

2) It is found that, 47.4 percent customers felt that the sales attendants show

interest to find out the required item 23.4 percent opined definitely yes. But 19.2

percent of the respondents said that the sales attendants are not interested to find

out the items which customer require. 65.4 % of the customers are satisfied with

participation of sales attendants to choose right product.

3) Uniform of the staff and manager of retail outlet gives pleasant look to the retail

outlet as well as it gives professional look and good feeling. Around 61 % of the

customers in Sangli, 50 % customers from Solapur and Satara and 58 %

customers from Kolhapur felt that the staff and managers appropriately and

smartly dressed.

4) Most of the customers (54 %) did not respond regarding complaint about

retailer. 16.4 % complained that products are not available. There are few

complaints regarding poor customer service as well as billing errors.

5) Total 16 customers from Sangli, 23 from Solapur, 8 from Satara and 31 from

Kolhapur city only have filed complaint because of many reasons like- poor

response, staff behavior, quality, non availability of products etc.

6) In all 74.8 % of the respondents said that customer help desk handling is

efficient. This means that there is proper provision made by researcher to handle

customer enquiries and problems. This is an additional service made available

by retailer to make customers delighted.

7) At Organized Retail Outlets, when customers visit for shopping, that time they

need to park their vehicles and deposit baggage at counters. 64.6 % of the

customers are satisfied with the arrangement of parking and baggage counter by

retailers.

8) Approximately 70 % of the respondents are satisfied with the parking facility

provided by retailer. Parking facility is one of the important peripheral services.

It has been observed that D-Mart especially provides ample parking and

recreation facilities but some retailers like Vishal Mega Mart, Big Bazaar etc.

do not have sufficient parking space.

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11. Future Scope for Organized Retailing -

1) In western Maharashtra this is the growth stage of life cycle of Organized

Retailing and many more big retailers are keen to enter in this market. Response

from customers regarding new retail outlets was studied. 52.8 % of the

customers definitely said that they will like to try new retail outlet.

2) Acceptability of the new retail outlets by the customers is studied by researcher

and it was found that majority customers opined that they will be definitely

happy if big retailers like Wal-Mart enter their city. 63.8 percent said they will

be definitely happy. 30.8 % will be happy with this. This shows that the

customers are willing to have more retail outlets to enjoy shopping.

3) As modern retail outlet provides facility of ‘One Stop Shop’ as well as

entertainment and recreation, 51.2 % of the customers feel that visit to modern

retail outlet provides entertainment cum shopping facilities because of which

customer get attracted towards it to spend leisure time.

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Section – II: Unorganized Retailers

1. General Profile of Traditional Retailers –

1) Unorganized Retailers’ response was considered to know impact on their

business because of Modern Retailers. It has been found that some businesses

are established since 70 years. Majority of the retailers (57.1 %) are running

their business since last 10 years.

2) Out of 35 small shops selected from four major cities in western Maharashtra,

22 businesses are run under ‘Sole Proprietorship’ and 10 shops are ‘Family

Owned’. Most of the businesses are owned by individually and few are family

businesses.

3) It has been observed that majority (10) shops selected in the vicinity of

Organized Retails are grocery shops. Seven shops are cloth shops and shops

under category of any other are also seven. In addition to these there are other

businesses like stationary, gift articles, electronics etc.

4) It is found that in 51.4 % of the shops, daily less than 50 customers visit

whereas in 28.6 % of shops approximately 100 customers visit. This makes it

clear that most of these small businesses have very limited scope of operation as

compared to Organized Retailers.

5) Monthly sales of these selected shops is reviewed and it is clear that majority of

shops (31.4 %) have their monthly sales up to Rs. 1,00,000 and 28.6 % of the

unorganized retailers have shown their monthly sales between Rs. 1,00,001 to

Rs. 2,00,000.

2. Organized Retail and it’s Impact on Business –

1) Awareness of these small retailers about Modern Retails in their cities is

checked and it is found that very few know about big retailers operating in

chains. 77 %of them know only about local level modern retailer formats like

supermarkets.

2) It is found that 62.9 % of the retail shop owners said that there is no adverse

impact on their business and only 37.1 % of the unorganized retailers agreed

that they are seeing adverse impact on their businesses because of entry of

organized retailers.

323

3) It is found that out of 13 businesses, 8 are facing 5 % negative impact on and 4

shopkeepers said they are facing negative impact on their businesses up to 10

%. Only one traditional retailer is suffering from more than 15 % of their sales.

4) Opinion of the customers regarding impact on volume on businesses shows,

retailers have agreed that their volume of business has been reduced because of

entry of organized retailers.

5) There is balanced response on opinion about ‘Entry of big retailers has made

negative impact on profit’. 20% have strongly agreed and 20 % have strongly

disagreed with this statement. Majority 28.6 % did not agree with this opinion.

6) It is seen that unorganized retailers have brought out various reasons for the

problem of shifting their customers to organized retail. Majority, 22.9 % feel

that ‘discount on MRP’ is the main reason behind this problem.

3. Opinion about Traditional Retailing –

1) Small retailers were asked about strengths of businesses. It was found that

majority of them (20 %) said that they provide qualitative service and after sales

service to the customers. 20 % also said that they sell qualitative and durable

products.

2) Traditional Retailers stated their weaknesses, and then 25 % retailers said that

there is no weakness with their business. 17 % said that they can give limited

discount and limited stock. Few said there is small space and limited

investment.

3) Benefits for which customers prefer to purchase from small shop were asked to

rank then maximum retailers (68.57 %) have given first rank to reliability

factor. This means according to retailers, customers come to them as reliable

source.

4) Opinion about impact on employment on unorganized retailing was asked.

There is no unemployment observed in the unorganized retailing sector by the

most of the retailers (54.3 percent). Only 20 percent of the retailers agreed that

there is unemployment in unorganized retailing.

324

4. Special Features of Traditional Retailing –

1) It is found that traditional retailers know their customers personally and

therefore they know their likes, dislikes and preferences. This adds personal

touch when they buy from small shop. Majority of the retailers (42.9 %) know

their 25 percent of the customers personally.

2) Traditional retailers generally sell products on credit and there is a trend that

customers pay the bills for whole month when month gets over. This can be the

reason that majority of the retailers (31.4 %) offer 31 to 45 days credit period.

3) Provision of ‘Home Delivery’ of products is one of the important criterions for

purchasing from Kirana Shop. It is found that 55.3 % of the retailers provide

home delivery.

5. Strategies to cope up with Competition –

1) Efforts were taken to know about the changes made by the traditional retailers

to match with organized modern retailers then it was found that 33.4 % of the

retailers did not make any changes in their shop.22.8 % said that they are

working more on display of items to attract customers. Others said

modernization, new furniture, shelves etc. changes are made by them.

2) It is found that most of the small retailers (71.5 %) did not make any change in

the storage of products. Other retailers made changes like packaging and then

storage, display on shelves etc.

3) It was asked traditional retailers regarding allowing their next generation to

enter in the same business, then majority (65.7 %) of the retailers are ready to

bring their next generation in the business. They are positive about future of

their business.

4) It is found that 71.4 percent of the traditional retailers are making changes in

their business to keep with the recent times and to overcome competition from

Organized Retails. This makes clear that they are ready to compete with modern

retailing.

5) Traditional retailers have their future plans to compete with retailers.

Approximately 25 % of them have not decided details yet. Others have decided

to modernize shop, expansion, adding new variety of products etc.

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6. Opinion about Organized Retailing –

1) Traditional retailers have stated few strengths of modern retailing, out of those

maximum i.e. 17.2 % feel that it is ‘One stop shop’. Other strengths are –

attractive display, more space, discounts, modern facilities etc.

2) Weaknesses of modern retails are highlighted like customer relations

maintained by the modern retailers (25.7 %), no service and poor customer

service (22.8 %) and cheap and low quality items (14.3 %). Few other

weaknesses of Modern Retailing are also pointed out by small shop owners – no

credit, no home delivery, no after sales service etc.

3) Opinion about ‘Customers get attracted because of infrastructure, technology

and variety’ was asked then 48.6 % of the retailers have strongly agreed with

that and 25.7 % have agreed with the statement.

4) It is found that 45.7 % of the traditional retailers are not happy with the entry of

organized retailers in their market. Because of Modern retailers customers are

changing their style of shopping and shopping has become leisure time

entertaining activity for them.

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Suggestions

1. ‘One Stop Shop’ model

It is observed that customers are looking for Convenience in shopping,

enjoyment and time saving. As the competition increases and customer becomes

knowledgeable and demanding, the retailer needs to build competitive

advantage. The element of convenience is fast gaining prominence in the world

of organized retail. Therefore Organized retailers shall try to make available all

categories of products under one roof by providing ‘One stop shop’ model. It

helps customers by saving time in travelling from one shop to other and

utilizing same time for entertainment. Most of the retailers considered for study,

were not running all the sections like ‘fruits and vegetables’ etc.

Many retail companies today are rethinking their retail strategies. While the

existence of customer is integral to the existence of the retailer, the ability to

understand consumer is the key to develop successful retail strategy. To be able

to satisfy customer, is to understand them their needs, and how they respond to

various marketing efforts done by organized retailers.

2. Focus on ‘Customer Experience’

One of the main objectives of retailer is to deliver qualitative service to the

shoppers. Customer service is largely a function of perception, customer

expectation and actual service provided. In the age of intense competition, a

retail organization is concerned with the image that stores carries in the minds

of customers. Many a times reputation of the stores and the service offered

become impotent criteria for the customer while selecting store for purchases.

One of the leading problems faced by many retailers is lack of differentiation

among competitors. They can tackle this problem by focusing on improvement

in the experience of customers in the store. This encompasses far more than

customer service and shall include all elements influencing customers such as

store layout, signage, lighting, service and the ease and speed of transactions.

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3. ‘Shopping Basket on wheels’

There is a trend of using vehicle – car or two wheelers while coming for

shopping. It is conveniently called as ‘Shopping Basket on wheels’. This is

because of the central location of the retail formats which are not located in the

proximity of shopper. One of the most important decision retailer has to make is

on the location of retail outlet. Accessibility is most important factor considered

by customers while deciding retail format for shopping. Now a days because of

improved roads and ample availability of automobiles, people mostly travel on

their vehicles for shopping.

Most important part for retailer is making sufficient and proper arrangement of

parking vehicles. It is seen that in selected cities many retailers are not having

sufficient parking space. This can become deciding factor while choosing

Organized Retail Store. Therefore Organized Retail store must have ample, safe

and secure parking space.

4. Private Labels

It is observed that there is no much popularity for ‘Private Labels’.

Manufacturer’s brands are already established and popular because of heavy

promotion. Most significant advantage that a private label allows a retailer is

that of earning a level of margin which may be higher than what is offered on

other brands that are chosen to retail. Throughout the world private label are

gaining acceptability and loyalty of customers. Retailer has a task to attract

customers by using promotional offers towards ‘Private Brands’. In order to

compete with national brands, private label need to focus on quality. In addition

to this quality of private brand must be comparable to popular brands then only

customers can be retained in future. Power of private labels must be understood

by retailers so they need not be at the mercy of popular brands. Private labels

are no more price- fighter but value added marketing differentiator.

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5. Merchandise Management

Merchandising in retail is the orderly, systematic, logical and intelligent way of

displaying all products in store. The biggest challenge in competitive world of

retail is stay relevant to the customers. In order to stay relevant to the customer,

retailer would understand his needs and then make available products according

to requirement. Awareness of general economic conditions is also required to

which will enable anticipation of buying patterns. Anticipating consumer

preferences and ensuring that goods are in stock when they are needed requires

resourcefulness on the part of retailer. The success of any retail operation is to a

great extent depends on retailer’s ability to provide right goods, at right time, at

right place and in right price.

Many customers always purchase many things in addition to the listed

requirements, some decide products to purchase with the help of display and

others like to enjoy shopping while going through all the shelves with ample

time. This is an opportunity for retailer and can be grabbed by making attractive

display of all possible products. This will attract attention and then remind

customer about purchasing it. Various storage and display methods can be used.

In addition to shelf and racks, hangers, gondolas, baskets, beans can also be

used. Arrangement should not also give congested look to the store.

6. Shelf Management

Quality of products and proper shelf management are also the important factors

while considering customer satisfaction and retaining them. Many customers

have responded that they experienced inferior quality of products and

sometimes outdated products unknowingly. This will make for them unhappy

experience and retailer may loose customers. Therefore, Organized Retailers

shall not compromise with quality of products while offering products in less

price as well as they must monitor shelves regularly so as to remove outdated

products strictly from shelves. Experience of outdated food products as well as

cosmetics and heath products category by consumer is most harmful to retailer.

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Non availability of products may also disappoint customers and they may shift

to another retailer. Therefore organized retailer must manage to always make

available presence of products on shelf.

7. Customer Service

Retail today is a part of service sector and customer service can become

powerful strategy. Today’s customer is savvy shopper with an eye for service.

Entire function of customer service needs to be understood by retailer because it

directly deals with the interaction with the customers. In the age of intense

competition a retail store has to create its image which is concerned with service

provided and experience while shopping. Retailers lose customers due to

attitude of rude employees.

Sales attendants, staff sand managers must behave properly with customers.

They must try to help customers in case of doubts, non availability of the

products etc. Behaviour of staff can be deciding factor when customers think

about delighting service. Customer expects that a sales person will have a fair

amount of information and will be able to advise them. Therefore, retailer must

train their sales persons so as to handle customers effectively while resulting in

delightful shopping. While customer service has become immensely necessary

part of the retail trade, it is equally necessary to provide service quality.

8. ‘Competitive Response’ by Traditional Retailers

It was feared that organized retailing will eliminate the traditional retailers. But

they would continue to coexist and will not be seriously affected because

organized retailing is developing its own distinctive market. Small stores should

also give additionally goods on credit and home delivery and attractive deals.

There should be competitive response from traditional retailers who are gearing

up to meet the threat from organized retailers. There has to be competitive

response from unorganized retailers through improved business practices and

technology upgradation.

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Unorganized retailers must adopt steps like- adding new product lines and

brands, better display, renovation of the store, introduction of self service,

enhanced home delivery, more credit sales, and acceptance of credit cards etc.

9. Formation of co-operatives and associations

Unorganized stores have their own USP in terms of convenience due to their

proximity, personalized service and deep understanding of their customer’s

behaviour and lifestyle. Those who will adapt and improve will survive and

grow. Small retailers can also form co-operatives or associations to avail

advantage of bulk purchase which facilitates fewer prices. They can directly

procure from suppliers or farmers. With some changes in policies and practices,

traditional retailing can overcome adverse impact on modern retailing.

10. Rural Retail Development

India is dominating in agriculture business and around 70 % of the GDP comes

from it. It is observed that there is vast development of organized retailing in

urban area but rural retail is an different concept in itself. Rural retail

development has been initiated by ITC Choupal Sagar, Hariyali Kisan Bazar

etc. especially in North India. It can be initiated in Maharashtra by these

retailers. Organized retailers can go for contract farming. This will assure

farmers continuous and more returns to farmers. There is also scope for dairy

business for supplying to moern retail outlets. There is much more scope for

increasing consumption of dairy products especially in cities. This will provide

employment and business opportunities in rural area, ultimately helping to

develop.

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Conclusion

In current scenario retail has emerged as a separate function by itself. Indian Market

has just entered the stage of growth and this can last for 15 to 25 years. Many retailers

will move from local to national presence. The environment in a large organized retail

store is significantly different from that in a traditional or mom and pop store. With the

emergence of large supermarkets hypermarkets and other formats retailers have come

in more contact with customers. Unorganized Retailers in the vicinity of organized

retailers experienced a decline in their volume of business and profit in the initial years

after the entry of large organized retailers. Adverse impact on sales and profit weakens

over time. There is competitive response from traditional retailers through improved

business practices and technology upgradation.

The concept of retailer’s private label has emerged. A strong trend in favour of

organized retail format is being witnessed in food and non food sector as people are

showing preference for one stop shops. Customers are also looking for convenience in

shopping. This would continue more strongly in future. With more dual income

families, the consumer’s ability to spend will increase, but at the same time, it is

predicted that the time available for shopping will go down. In such a scenario, the

retailers will have to take steps to develop shopping as an experience, though the more

successful retailers will be those that will provide faster services.

Growth of organized retail industry will have positive multiplier effect on Indian

economy. Retail industry is attracting a domestic and global investment which also

supports several industries like IT, cold chain, logistics, and warehouse distribution.

The surge of private labels have generated demand and sourcing tie-ups with

manufacturers. In case of fruits and vegetables, direct procurement is bringing

quantitative benefit from higher price realization and qualitative benefit by improving

agro-processing services. It will result in complete revamp of the agricultural supply

chain. Organized retailing will remove various inefficiencies of present Indian

distribution system which in turn will provide better price for farmer and supplier and

lower price for consumers.

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Organized retail has created many employment and business opportunities of higher

quality. It is going to enhance employment potential of Indian economy. Organized

retailing provides direct employment in retail and indirectly in many other dependent

industries like food processing, packing, IT, transport, cold chain logistics and

infrastructure.

This research work contributes to academics by making available detail analysis of

worldwide and Indian retail industry. Students are going to benefit from this research

work because of deep insight of retailing as one of the important business activity in

current scenario as well as in future.

The present research work contributes to knowledge of society by making them aware

about current developments and future scope of this business. This may also guide

other researchers to study it further.

Future scope of study:

By considering vast scope of retailing, researcher could study only selected four cities

in western Maharashtra. This scope can be widened while considering different cities,

towns etc.

The research does not consider non-store retailing and e-tailing. This can be further

studied because developments in communication facilities have great impact on these

upcoming methods of retailing.

Organized Retail chains in multi-brand and multi-product category only are taken into

consideration in this study. But there is vast scope in single brand or single product

retailers like McDonalds, Pizza Hut, Café Coffee Day, Titan, Gold Plus, Cotton King

and many more.

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