notes retail and distribution management

Manoj Patel Asst. Professor

JHUNJHUNWALA BUSINESS SCHOOL, FAIZABAD

Q.1. What do you mean by “Retailing”? Explain the emerging trends, opportunities, challenges and

functions of Indian retailing.

Ans.: Retailing: Retail marketing is the range of activities undertaken by a retailer to promote awareness and

sales of the company’s products. This is different from other types of marketing because of the components of

the retail trade, such as selling finished goods in small quantities to the consumer or end user, usually from a

fixed location. Retail marketing makes use of the common principles of the marketing mix, such as product,

price, place and promotion. A study of retail marketing at university level includes effective merchandising

strategies, shopping and consumer behavior, branding and advertising. Retail marketing is especially important

to small retailers trying to compete against large chain stores.

More recently, technological, cultural and economic changes have shifted the balance of power to retailers,

according to Sullivan and Adcock. For example, retailers now can track customer shopping data, which

provides an important source of consumer research that manufacturers can’t directly access. Also, retail stores

have launched in-store brands, making them viable competitors with major manufacturers. In other words, as

retailers have increased their capabilities and power, being able to work with retailers has become increasingly

important for any manufacturer whose business model depends on being visible to the typical consumer.

Retailing in India:

India retail industry is the largest industry in India, with an employment of around 8% and contributing

to over 10% of the country's GDP.

Retail industry in India is expected to rise 25% yearly being driven by strong income growth, yearly

being driven by strong income growth, changing lifestyles, and favorable demographic patterns.

A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in

urban areas, rising incomes, and a steep rise in rural consumption

It is the second fastest growing economy of the world

Potential to be the third largest economy in terms of GDP in next few years

It ranks high amongst the top 10 FDI destinations of the world

Fastest growing tourist market in Asia

World bank states, India to be world’s second largest economy after China by the year 2050

Stable and investor friendly Central Government at the helm of affairs

Introduction of Value Added Tax or VAT and tax reforms

High degree of professionalism and corporate ethics

SYLLABUS UNIT IV- Retail Management: An Overview Concept and Evolution; Functions and Role of Retailing in

Distribution; Social and Economic significance of Retailing; Formats of Retailing; Organized Retailing;

Technology in Retailing; Present Indian Retailing Scenario.



Excellent Investment opportunities in Indian retail sector and in allied sectors; sure and high returns on

investments.

Evolution of Indian retail: Traditional family run convenience stores are too well established in India. The

retail stores in India are essentially dominated by the unorganized sector or traditional stores.

In fact the traditional stores have taken up to 98 percent of the Indian retail market. Now stores run by families

are primarily food based and the setup is as Kirana or the' corner grocer' stores. Basically they provide high

service with low prices. If the stores are not food based then the type of retail items available are local in

nature. The tough competition for convenience stores are coming from organized retail stores dealing in food

items.

Emerging trends: There is a fantastic rise in the Indian organized retail sector in a very short period of time

between 2001 and 2006. Eventually, out of the shadows of the unorganized retail sector, India has a chance of

tremendous economic growth, both in India and tremendous economic growth, both in India and abroad. The

relaxation by the government on regulatory controls on foreign direct investments has added to the process of

the growth of the Indian organized retail sector. With the arrival of the Transnational Companies (TNC), the

Indian retail sector will undergo a transformation. At present the Foreign Direct Investments (FDI) is not

encouraged in the Indian organized retail sector but once the TNC'S get in they inevitably try to oust their

Indian counterparts. This would be challenging to the retail sector in India.

The trends to follow in the future: The Indian Organized retail sector will grow up to 10% of total retailing

by 2010. No one single format can be assumed as there is a huge difference in cultures regionally. The most

encouraging format now would be the hyper marts. The hyper mart format would be further encouraged with

the entry of the TNCs.

Growth factors in Indian organized retail sector: The growth factors in Indian organized sector are various

but it is mainly due to the fact that India's economy is booming.

Also, the rise in the working population which is young, pay young, pay--packets which are hefty, more

nuclear packets which are hefty, more nuclear families in urban areas, rise in the number of women working,

more disposable income and customer aspiration, western influences and growth in expenditure for luxury

items. All these are the factors for the growth in Indian organized retail sector. Many Indian companies have

entered the retail industry in India and this is also a factor in the growth of Indian organized retail sector.

Opportunities in Indian retail sector: The various opportunities in the organized retail sector in India are

mainly there for the Indian consumers behavior pattern has changed. Now the Indian consumer gets more hefty

pay-packages, is younger, a large number of women are working, western influences, and more working,

western influences, and more disposable income have opened a lot of opportunities in Indian organized retail

sector. The Indian consumer wants to shop, eat and get entertainment in one place and is having also given

Indian organized retail sector an opportunity to grow.



Many Indian companies seeing the various opportunities in organized retail sector in India has entered it.

Pantaloons have decided to increase its retail space to 30 million square feet with an investment of US $ 1

billion. Reliance Industries Limited is targeting for annual sales of US $ 25 billion by 2011.

The opportunities in the organized retail sector in India have also increased with the desire of many global

retail giants to setup shop here. The global retail giants who are entering the Indian organized retail sector are:

1. Tesco

2. Wal-Mart

3. Metro AG

4. Carrefour SA

The retail companies are found to be rising in India at are mark able speed with these ears and this have

brought a revolutionary change in the shopping attitude of the Indian customers. The Growth of Retail

Companies in India is facilitated by certain factors like-

Existing Indian middle classes with an increased purchasing power

Rise of upcoming business sectors like the IT and engineering firms

Change in the taste and attitude of the Indians

Effect of globalization

Heavy influx of FDI in the retail sectors in India

Challenges Facing the Indian Organized Retail Sector: The behavior patterns of the Indian consumer have

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. He now wants to eat,

shop, and get entertained under the same roof. 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

Trained manpower shortage is a challenge facing the organized retail sector in India. The Indian

retailers have difficulty in finding trained person and also have to pay more in order to retain them.

This again brings down the Indian retailers profit levels. The Indian governments have allowed 51%

foreign direct investment (FDI) in the India retail sector to one brand shops only. This has made the

entry of global retail giants to organized retail sector in India difficult. This is a challenge being faced

by the Indian organized retail sector.

But the global retail giants like Tesco, Wal-Mart, and Metro AG are entering the organized retail

sector in India indirectly through franchisee agreement and cash and carry wholesale trading.

Many Indian companies are also entering the Indian organized retail sector like Reliance Industries

Limited, Pantaloons, and Bharti Telecoms. But they are facing stiff competition from these global



retail giants. As a result discounting is becoming an accepted practice. This too brings down the profit

of the Indian retailers. All these are posing as challenges facing the Indian organized retail sector.

Q.2. Explain the Information Technology in Retailing. Also describe the format of retailing.

Ans.: Information Technology in Retailing: Over the years as the consumer demand increased and the

retailers geared up to meet this increase, technology evolved rapidly to support this growth. The hardware and

software tools that have now become almost essential for retailing can be divided into 3 broad categories:

Customer interfacing systems

Bar coding and scanners: Point of sale systems use scanners and bar coding to identify an item, use

pre-stored data to calculate the cost and generate the total bill for a client. Tunnel Scanning is a new

concept where the consumer pushes the full shopping cart through an electronic gate to the point of

sale. In a matter of seconds, the items in the cart are hit with laser beams and scanned. All that the

consumer has to do is to pay for the goods.

Payment: Payment through credit cards has become quite widespread and this enables a fast and easy

payment process. Electronic cheque conversion, a recent development in this area, processes a cheque

electronically by transmitting transaction information to the retailer and consumer's bank. Rather than

manually process a cheque, the retailer voids it and hands it back to the consumer along with a receipt,

having digitally captured and stored and image of the cheque, which makes the process very fast.

Internet: Internet is also rapidly evolving as a customer interface, removing the need of a consumer

physically visiting the store.

Operation support systems

ERP System: Various ERP vendors have developed retail-specific systems which help in integrating

all the functions from warehousing to distribution, front and back office store systems and

merchandising. An integrated supply chain helps the retailer in maintaining his stocks, getting his

supplies on time, preventing stock-outs and thus reducing his costs, while servicing the customer

better.

CRM Systems: The rise of loyalty programs, mail order and the Internet has provided retailers with

real access to consumer data. Data warehousing & mining technologies offers retailers the tools they

need to make sense of their consumer data and apply it to business. This, along with the various

available CRM (Customer Relationship Management) Systems, allows the retailers to study the

purchase behavior of consumers in detail and grow the value of individual consumers to their

businesses.



Advanced Planning and Scheduling Systems: APS systems can provide improved control across the

supply chain, all the way from raw material suppliers right through to the retail shelf. These APS

packages complement existing (but often limited) ERP packages. They enable consolidation of

activities such as long term budgeting, monthly forecasting, weekly factory scheduling and daily

distribution scheduling into one overall planning process using a single set of data.

Leading manufacturers, distributors and retailers and considering APS packages such as those from i2,

Manugistics, Bann, Mercial incs and Sterling-Douglas.

Strategic decision support systems

Store Site Location: Demographics and buying patterns of residents of an area can be used to compare

various possible sites for opening new stores. Today, software packages are helping retailers not only

in their locational decisions but in decisions regarding store sizing and floor-spaces as well.

Visual Merchandising: The decision on how to place & stack items in a store is no more taken on the

gut feel of the store manager. A larger number of visual merchandising tools are available to him to

evaluate the impact of his stacking options. The SPACEMAN Store Suit from AC Nielsen and

Modacad are example of products helping in modeling a retail store design.

Retail Format: This brings to broadly identify and categorize the types of retail marketing, which are defined

as follows:

1. Store Retailing

2. Non store Retailing

Types OF Retail Marketing

Store Retailing: Store retailing provides consumers to shop for goods and services in a wide variety

of stores and it also help the Consumers to get all the needed goods and services from one shop only.

The different types of store retailing are given below.

Specialty Stores: These stores focus on leisure tastes of different individuals. They have a narrow

product line with deep assortment such as apparel stores, sporting goods stores, furniture stores,

florists and bookstores. These stores are usually expensive and satisfy the needs of selected consumers

who have liking or preference for exclusive things.

Departmental Store: These stores are usually built in large area and keep variety of goods under one

shed. It is usually divided into different sections like clothing, kids section, home furnishings,

electronic appliances and other household goods. In a departmental store a consumer can buy variety

of goods under one shed.



Supermarket: These stores are relatively large, low cost, low margin, high volume, self service

operations designed to serve total needs for food, laundry and household maintenance products.

Supermarkets earn an operating profit of only 1 percent on sales and 10percent on net worth.

Convenience Stores: These are relatively small stores located near residential area, open for long

hours seven days a week, and carrying a limited line of high turnover convenience products at slightly

higher prices than departmental stores. Many such stores also have added takeout sandwiches, coffee

and pastries.

Off - Price Retailer: These stores sell goods at low price with lower margins & higher volumes.

These stores sell goods with deteriorated quality. The defects are normally minor. This target at the

persons belonging to the lower income group, though some have a collection of imported goods aimed

to target the younger generation. The company owned showroom selling the seconds products is a

typical example of off - price retailer.

Discount Store: These stores sell standard merchandise at lower prices by accepting lower margins

and selling higher volumes. The use of occasional discounts or specials does not make a discount

store. A true discount store regularly sells its merchandise at lower prices, offering mostly national

brands, not inferior goods.

In recent years, many discount retailers have “traded up”. They have improved decor, added new lines and

services, and opened suburban branches—all of which has led to higher costs and prices and as some

department stores have cut their prices to compete with discounters. Not only that, discount stores have moved

beyond general merchandise into specialty merchandise stores, such as discount sporting goods stores,

electronics stores, and bookstores.

Catalog Showroom: Catalog showrooms generally sell a broad selection of high-markup, fast-

moving, brand-name goods at discount prices. These include jewelry, power tools, cameras, luggage

small appliances, toys, and sporting goods. Catalog showrooms make their money by cutting costs and

margins to provide low prices that will attract a higher volume of sales. Catalog showrooms have been

struggling in recent years to hold their share of the retail market.

India has some sometimes been called a nation of shopkeepers. This epithet has its roots in the huge number of

retail enterprises in the country totaling 12 million, about 78 percent of these are small family owned

businesses utilizing only household labour. even among retail enterprises that hire workers the bulk of them

hire less than 3 workers .India’s retail sector appears backwards not only by standards of industrialized

countries but also in comparison to several other emerging markets in Asia and elsewhere. There are only 14

companies that run departmental stores and mere two with hypermarket operations. While the number of

businesses operating supermarkets is higher (425 in 2004 ) most of these had only 1 outlet, the number of

companies with supermarket chains was less than 10.



Format Description The Value Proposition

Branded Stores Exclusive showrooms either owned or

franchised out by a manufacturer.

Complete range available for a given

brand, Certified product quality.

Specialty

Stores

Focus on a specific consumer need; carry

most of the brands available.

Greater choice to the consumer,

comparison between brands possible

Department

Stores

Large stores having a wide variety of

products, organized into different

departments, such as clothing, house wares,

furniture, appliances, toys, etc.

One stop shop catering to varied

consumer needs.

Supermarkets Extremely large self-services retail outlets. One stop shop catering to varied

consumer needs.

Discount Stores Stores offering discounts on the retail price

through selling high volumes and reaping the

economies of scale.

Low prices.

Hyper-mart

Larger than a Supermarket, sometimes with a

warehouse appearance, generally located in

quieter parts of the city

Low prices, vast choice available

including services as cafeterias.

Convenience

Stores

Small self-service formats located in crowded

urban areas.

Convenient location and extended

operating hours.

Shopping Malls An enclosure having different formats of in-

store retailers, all under one roof.

Variety of shops available close to each

other.

Non-store Retailing

It is another type of retail marketing. Different types of non-store retailing are given below:

Direct Selling: Direct selling which started centuries ago with itinerant peddlers has burgeoned into a

$9 billion industry, with over 600 companies selling door to door, office to office, or at home sales

parties. A variant of direct selling is called multilevel marketing, whereby companies such as Amway

recruit independent businesspeople who act as distributors for their products, who in turn recruit and

sell to sub distributors, who eventually recruit others to sell their products, usually in customer homes.

Direct Marketing: Direct marketing has its roots in mail-order marketing but today includes reaching

people in other ways than visiting their homes or offices, including telemarketing, television direct

response marketing, and electronic shopping.

Automatic Vending: Automatic vending has been applied to a considerable variety of merchandise,

including impulse goods with high convenience value (cigarettes, soft drinks, candy, newspaper, hot



beverages) and other products (hosiery, cosmetics, food snacks, hot soups and food, paperbacks,

record albums, film, T-shirts, insurance policies, and even fishing worms).

Short type question-

Q.1. Briefly describe the functions of retaining?

Ans.: 1. Buying: A retailer buys a wide variety of goods from different wholesalers after estimating customer

demand. He selects the best merchandise from each wholesaler and brings all the goods under one roof. In this

way, he performs the twin functions of buying and assembling of goods.

2. Storage: A retailer maintains a ready stock of goods and displays them in his shop.

3. Selling: The retailer sells goods in small quantities according to the demand and choice of consumers. He

employs efficient methods of selling to increase his sales turnover.

4. Grading and Packing: The retailer grades the goods which are not graded by manufacturers and

wholesalers. He packs goods in small lots for the convenience of consumers.

5. Risk-bearing: A retailer always keeps stock of goods in anticipation of demand. He bears the risk of loss

due to fire, theft, spoilage, price fluctuations, etc.

6. Transportation: Retailers often carry goods from wholesalers and manufacturers to their shops.

7. Financing: Some retailers grant credit to customers and provide the facility of return or exchange of goods.

In some cases, home delivery and after sale service are provided by retailers.

8. Sales promotion: A retailer displays goods. He carries out publicity through shop decoration, window

display, etc. He maintains direct and personal contacts with consumers. He persuades consumers to buy goods

through personal selling.

9. Information: Retailers provide knowledge to consumers about new products and uses of old products. They

advise and guide consumers in better choice of goods. They also provide market information to wholesalers

and manufacturers.

Providing Assortments: Supermarkets typically carry 20,000 to30, 000 different items made by over

500 companies. Offering an assortment enables their customers to choose from a wide selection of

brands, designs, sizes, colors, and prices at one location.

Breaking Bulk: To reduce transportation costs, manufacturers and whole seller typically ship cases of

frozen dinners or cartons of blouses to retailers. Retailers then offer the products in smaller quantities

tailored to individual consumers and household’s consumption patterns.

Holding Inventory: A major function of retailers is to keep inventory that is already broken into user-

friendly sizes so that products will be available when consumers want them. Thus, consumers can keep

a smaller inventory of products at home because they know local retailers will have the products

available when they need more. By maintaining an inventory, retailers provide a benefit to

consumers; they reduce the consumers cost of storing products.

Q.2. Write short notes on retail distribution.



Ans.: Retail Distribution channel: The characteristic that sets a retailer apart from other members of its

distribution channel is that the retailer is the party who ultimately sells the product to its end user or consumer.

As you know if you’ve ever shopped for anything, retailers come in many shapes and sizes, so to speak.

Retailers may be grouped according to any of the following four categories:

Ownership: Every brick-and-mortar retailer can be classified as a large, national chain store; a

smaller, regional chain store; an independent retailer; or a franchisee.

Pricing philosophy: Stores are generally either discounters or full-price retailers. Within the

“discounter” category, there are several subcategories such as factory outlets, consignment stores,

dollar stores, specialty discount stores, warehouse membership clubs, and so on.

Product assortment: The breadth and depth of product lines carried by the store depends a lot on its

ownership. An Ann Taylor store, for example, sells Ann Taylor branded clothing—not much breadth

of product line there, but extensive depth in that line. A Kmart, on the other hand, carries thousands of

brands, but perhaps does not have much depth (not many brands) in any given category of product.

Service level: The more exclusive or specialized the store, the more types of services it will generally

offer-from a name-branded credit card, to on-site alterations, to liberal return policies for its loyal

customers. With the “big box” discounters, on the other hand, customers pay for convenience and

bypass traditional service, by bagging their own groceries and the like. These distinctions between

various types of stores will be important as we discuss their participation in certain distribution

channels.

Q.3. Define the non-store retail format.

Ans.: Non-store Retailing: The selling of goods and services without establishing a physical store is

known as Non-Store Retailing. It includes such services as vending machines, direct-to-home selling,

telemarketing, catalog sales, mail order, and television marketing programs.

The fastest growing method used by retailers to sell products is through methods that do not have

customers physically visiting a retail outlet. In fact, in many cases customers make their purchase from

within their own homes. A large majority about 80% of retail transactions are made in stores. However, a

growing volume of sales is taking place away from stores. It has estimated that non-store sales account for

almost 20% of total retail trade.

There is no physical existence of the store and in non-store retailing; customers do not go to a store to buy.

This type of retailing is growing very fast. Among the reasons are;

Customers are no longer willing to spend as much time on shopping,

Hectic and fast lifestyle,

Increasing the number of working women,

Double Income Family,



Situational factors, etc.

Types of Non-Store Retail Format:

Following are the six types of non-store retailing:

Direct selling,

Telemarketing,

Online retailing,

Automatic vending,

Direct marketing, and

E- Tailing.

Advantages of Non-Store Retailing:

Shopper liberated from a physical visit of a retail store.

The high fixed costs of operating retail outlets are eliminated.

The breadth of customer coverage is considerably wider than is possible with an individual retail

location.

Companies do not have to spend large sums or dilute stock building new locations, or acquiring them.

This truly gives the non-store retailer a global market from a cheap, centralized location.

Q.4. What is automatic vending machine?

Ans.: Vending Machine: The sale of products through a machine with no personal contact between buyer and

seller is called automatic vending.

The appeal of automatic vending is convenient purchase. Products sold by automatic vending are usually well-

known presold brands with a high rate of turnover. The large majority of automatic vending sales comes from

the "4 C's" : cold drinks, coffee, candy and cigarettes.

Automatic vending is a unique area in non-store merchandising because the variety of merchandise offered

through automatic vending machines continues to grow. Initially, impulse goods with high convenience value

such as cigarettes, soft drinks, candy, newspapers, and hot beverages were offered. However, a wide array of

products such as hosiery, cosmetics, food snacks, postage stamps, paperback books, record albums, camera

film, and even fishing worms are becoming available through machines.

Advantages and disadvantages:

Vending machines can expand a firm's market by reaching customers where and when they cannot come to a

store. Thus vending equipment is found almost everywhere, particularly in schools, work places and public

facilities. Automatic vending has high operating costs because of the need to replenish inventories frequently.

The machines also require maintenance and repairs.



Future Expectations: The outlook for automatic vending is uncertain. The difficulties mentioned above may

hinder future growth. Further, occasional vending-related scams may scare some entrepreneurs away from this

business.

Vending innovations give reason for some optimism. Debit cards that can be used at vending machines are

becoming more common. When this card is inserted into the machine, the purchase amount is deducted from

the credit balance. Technological advances also allow operators to monitor vending machines from a distance,

thereby reducing the number of out-of-stock or out-of-order machines.

Q.5. Define the supermarket.

Ans.: Super Market: Unlike western countries where supermarkets are prominently visible, in our country

this is lacking. The supermarkets largely concentrate on selling food related products and are considerably

smaller in size compared to hypermarkets. Their value proposition is also different from the hypermarkets. The

supermarkets offer relatively less assortments but focus on specific product categories. They do not play the

game on price rather use convenience and affordability as their salient features. In India this role is played by

the provision stores and sweet shops. Interestingly the fresh vegetables and fruits are sold on the foot path and

in open markets. Traditionally consumers feel conservative to buy fruits and vegetables from air conditioned

supermarkets. They prefer to buy either from the local mobile vegetable sellers or from the nearest sabji

market. Probably that works as deterrent factor for the growth of supermarkets in India. But the situation is

changing and slowly supermarket operators are coming to their own.

A super market normally sells grocery, fresh, cut vegetables, fruits, frozen foods, toiletries, cosmetics, small

utensils, cutlery, stationery and Gift items. In India Food World, Food Bazaar, Nilgiri (30 plus stores), and

Adani are the leading super market operators. One of the biggest super market operators in the western India is

Adani Retail Limited which operates Adani super market plans to continue its journey to reach total 19 cities

with the store strength of 60 plus in the state of Gujarat. ARL also plans to expand its operation in the

neighbouring states of Rajasthan, Madhya Pradesh, Maharashtra and Chhattisgarh. Subhiksha is one of the

leading super market operators, who largely operates in the southern part of India is expanding to western

India. One more retailer Reliance Retail is on the move and this retailer opened its Reliance Fresh-a super

market chain with 11 stores in Hyderabad in November 2006 and is planning to enter 70 more cities within 2

years. Fabmall a part of Trinetra Super Retail Limited is also expanding. By June 2006 Fabmall had 28 super

markets in some cities and the retailer is planning to open 25 outlets in Kerala by March 2007.

Food Bazaar operates in major cities in India with a floor space ranging from 6,000 sq ft to 16,000 square feet

and the format sells both food and non-food items. The non-food items contribute about 22 per cent of total

sales and rest is contributed by the food related items. A Food Store stocks an average of 7,000 stock keeping

units (SKUs) and over 50,000 articles. The SKU's are divided into the broad categories - staples, fresh produce

Q.6: Explain the socio-economic significance of retail in India.



Ans.: The Retail Sector of Indian Economy is going through the phase of tremendous transformation. The

retail sector of Indian economy is categorized into two segments such as organized retail sector and

unorganized retail sector with the latter holding the larger share of the retail market. At present the organized

retail sector is catching up very fast. The impact of the alterations in the format of the retail sector changed the

lifestyle of the Indian consumers drastically. The evident increase in consumerist activity is colossal which has

already chipped out a money making recess for the retail sector of Indian economy.

With the onset of a globalized economy in India, the Indian consumer's psyche has been changed. People have

become aware of the value of money. Nowadays the Indian consumers are well versed with the concepts about

quality of products and services. These demands are the visible impacts of the Retail Sector of Indian

Economy.

Since the liberalization policy of 1990, the Indian economy, and its consumers are getting whiff of the latest

national & international products, with the help of print and electronic media. The social changes with the

rapid economic growth due to trained personnel’s, fast modernization; enhanced availableness of retail space is

the positive effects of liberalization.

The growth factors of the retail sector of Indian economy:

Increase in per capita income which in turn increases the household consumption

Demographical changes and improvements in the standard of living

Change in patterns of consumption and availability of low-cost consumer credit

Improvements in infrastructure and enhanced availability of retail space

Entry to various sources of financing

The infrastructure of the retail sector will evolve radically. The emergence of shopping malls is going steady in

the metros and there are further plans of expansion which would lead to 150 new ones coming up by the year

2008. As the count of super markets is going up much faster than rate of growth in retail sector, it is taking the

lions share in food trade. The non-food sector, segments comprising apparel, accessories, fashion, lifestyle felt

the significant change with the emergence of new stores formats like convenience stores, mini marts, mini

supermarkets, large supermarkets, and hyper marts. Even food retailing has became an important retail

business in the national arena, with large format retail stores, establishing stores all over India. With the entry

of packaged foods like MTR, ITC Ashirbad, fast foods chains like McDonald's, KFC, beverage parlors like

Nescafe, Tata Tea, Café Coffee and Barista, the Indian food habits has been altered. This stores have earned

the reputation of being 'super saver locations'. With the arrival of the Transnational Companies (TNC), the

Indian retail sector will confront the following round of alterations. At present the Foreign Direct Investments

(FDI) is not encouraged in the Indian organized retail sector but once the TNC'S get in they would try to

muscle out their Indian counterparts. This would be challenging to the retail sector in India.

The future trends of the retail sector of Indian economy:

The retail sector of Indian economy will grow up to 10% of total retailing by the year 2010.



No one single format can be assumed as there is a huge difference in cultures regionally.

The most encouraging format now would be the hypermarts.

The hypermart format would be further encouraged with the entry of the TNC's

notes retail and distribution management

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