ABHINAV SRIVASTAVA

by- ABHINAV SRIVASTAVA

Agenda
Retailing : An overvi Retail Evolution in In Indian Retail Industr Retail Format
s The Change Factor Retail Strategies Food Retailing
Retailing: An Overview
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Retailing Ø World’s largest private industry Ø US$ 6.6 trillion sales annually Indian
retailing v Largest employer after agriculture - 8%* of population
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An overview
Highest outlet density in world Around 12 mn outlets Still evolving as an indust
ry Long way to go
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Most Powerful Retailers Fortune 100
10 Retailers
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An Overview
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Wal-Mart, Carrefour, A hold, Home Depot, Kroger, Metro, Kmart-Sears, Target, Alb
ertsons
GLOBAL RETAIL
Percentage of Organized Retail USA - 85% Taiwan - 81% Malaysia - 55% Thailand -
40% Brazil - 36% Indonesia - 30% Poland - 20% China - 20% India - 3%
South east Asia Retail Market
Retail Evolution in India
Historic / Rural Reach
Traditio nal Reach
Governm ent Supporte d
Modern Formats/ International Exclusive Brand Outlets Hyper/Super Markets Depart
ment Stores Shopping Malls
PDS Outlets Khadi Stores Cooperatives Convenience Stores Mom and Pop/ Kiranas
Weekly Markets Village Fairs Melas
Source of
Neighbo rhood Stores/
Availab ility/ Low
Shoppin g Experien
TOP 10 Players in Retail Sector
Shoppers Stop •Westside (Trent) •Pantaloon (Big Bazaar) •Lifestyle •RPG Retail (Foodwor
ld, Musicworld) •Crossword •Wills Lifestyle •Globus •Piramals ( Pyramid & Crosswords) •Ebo
ny Retail Holdings Ltd.
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Indian Retail - Facts
Retailing of mobile handset and accessories will grow to Rs. 5000 crores by 2010
Third party logistics market is estimated at US$ 20 billion by 2011.
Demand for private labels in the rise, will grow further.
In-house brands will see a growing demand amongst the retailers and will also en
sure margin stability.
FMCG industry has introduced 251 new products up to October 2007, as against 191
in the same period last year.
India s food and beverages sector, growing at 9%, is expected to attain US$ 117.
25 billion by the end of this year
With 54% of its 1.1 billion people aged below 25, it is one of the world s large
st markets for TV.
India s food service industry is expected to grow 48% to US$ 667.49 million in t
he next two years.
According to a report by PriceWaterhouse Coopers, India could grow to almost 90%
of the size of the US economy by 2050
TYPES OF RETAILING
ORGANIZED UNORGANIZED
Formal Retailing Sector Typically large retailers Greater enforcement of taxatio
n mechanisms High level of labor usage monitoring
Informal retailing Sector Typically small retailers. Evasion of taxes Difficulty
in enforcing tax collection mechanisms No monitoring of
Organized retail
unorganized
Categories of Retail
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1.Corporate Houses
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Tata: Tata Trent RPG group: Food World, Health and ITC: Wills Life Style Rahejas
(Shoppers Stop), Hiranandani (Haiko), DLF(DT cinemas) etc. Glow, etc
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2.Dedicated brand outlets
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Nike, Reebok, Zodiac etc
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3.Multi-brand outlets
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Vijay Sales, Viveks, Big Bazaar etc
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4.Manufacturers/ Exporters
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Pantaloons, Bata, Weekender
Retailing Formats in India
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Indian retail
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Modern Format retailers l Supermarkets (Food world) l Hypermarkets (Big Bazaar)
l Department Stores(S Stop) l Specialty Chains (Ikea) l Company Owned Company Op
erated Traditional Format Retailers l Karana s: Traditional Mom and Pop Stores l
Kiosks l Street Markets l Exclusive /Multiple Brand Outlets
Malls
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The largest form of organized retailing today. Located mainly in metro cities, i
n proximity to urban outskirts. ( Forum, Gopalan and Garuda Malls in Bangalore)
Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shoppin
g experience with an amalgamation of product, service and entertainment, all und
er a common roof.
Ø Ø
Examples : Shoppers Stop, Pyramid, Pantaloon.
FORUM MALL
GARUDA MALL
GOPALAN MALL
Specialty Stores
Chains such as the Bangalore based Kids Kemp, The Mumbai books retailer Crosswor
d, RPG s Music World and The Times Group s music chain Planet M, are focusing on
specific market segments and have established themselves strongly in their sect
ors.
Discount Stores
As the name suggests, discount stores or factory outlets, offer discounts on the
MRP through selling in bulk reaching economies of scale or excess stock left ov
er at the season. The product category can range from a variety of perishable/ n
on perishable goods
Department Stores
Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer
needs. Further classified into localized departments such as clothing, toys, hom
e, groceries, etc. E.g: SHOPRITE in Bangalore
HYPERMARKETS
Size of the Market: 30000 to 1.5 lakh sqr ft S K U’S: > 25000 Food & Non-food item
s Value Propositions :Diverse offerings & high quality products & services at pr
ices which may be up to 10-20% lower than those in supermarkets & department sto
res Location: Non prime locations, outskirts of major towns & cities.
Super Market
Large self service outlets, catering to varied shopper needs are termed as Super
markets. These are located in or near residential high streets. These stores tod
ay contribute to 30% of all food & grocery organized retail sales. Super Markets
can further be classified in to mini supermarkets typically 1,000 sq ft to 2,00
0 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. havin
g a strong focus on food & grocery and personal sales.
Convenience Stores
These are relatively small stores 400-2,000 sq. feet located near residential ar
eas. They stock a limited range of high-turnover convenience products and are us
ually open for extended periods during the day, seven days a week. Prices are sl
ightly higher due to the convenience premium.
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 Metr
o.
CASH & CARRY
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Size of the Market : >1 lakh sqr ft Target Customers : Institutions & Retailers
Value Proposition : Location Bulk packs at low prices : Out of the Town
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Membership Requirement
E-TAILING
Electronic retailing, or e-tailing, refers to the practice of selling goods and
services over an electronic medium like the Internet. Many traditional brick-and
-mortar firms like Toys R Us and Barnes and Noble also sell their wares via We
b sites. Other companies, such as Amazon.com books, CDs, and computer software a
nd hardware are the most common goods sold by E- tailers clothes, cosmetics, per
fume, plants, toys, and other types of merchandise also selling through E- taile
rs.
Retail formats summary Hyper market Basis of Super market
Cash & carry
Differentiation Average Size 2000 – 8OOO 30000 – 1.5 1 lakh + sqr ft sqr ft lakh sqr
ft Target Household Household Institutions & Consumer Retailers Value Variety,
quality Diverse Bulk packs at proposition & service. One offerings, price low pr
ices stop family < 10-20% of Shop Supermarkets & Department stores
Location
Town centre/
Outskirts of
Out of Town
The Change Factor
Reasons……
Moderation in the growth rate has come with some good news, with the country s p
er capita income expecting to more than double over the last seven years to Rs 3
8,084 in 2008-09, reflecting improvement in the living standards of an average I
ndian. Changing Indian consumer preferences
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Disposable income of Middle class : 20.9%* growth in real disposable income in ’99
-’03.
STRATEGIES OF SCM IN RETAIL
Strategies…
DISTRIBUTION: HUB & SPOKE METHOD CROSS DOCKING SYSTEM TECHNOLOGY: POINT OF SALE
RFID BAR CODE
Food Retailing
Introduction
Food Industry grows @ 40 % annually and projected to grow at same pace ahead. Do
mestic Food Retailer worth $ 60 crore
Food Retailing Products

Fruits & Vegetables Staples Confectionaries Beverages Frozen / Chilled Products

Ready to Eat Foods Ready to Serve Foods Ready to Cook Foods Food Addictives
Leading Food Retail Brands
1. Mc Donald’s
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1996 - Launched first in India. In India, joint venture managed by two groups
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Hard castle Restaurants Pvt Ltd – West & South India Connaught Plaza North & East
India
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First country does not offer Beef & Pork Items More than 31,000 restaurants in 1
19 countries worldwide
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160 restaurants across India
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Plans to add 35 – 40 restaurants this Year
2. YUM BRANDS
Offer services in two Formats
Ø Ø
Kentucky Fried Chicken (KFC) Pizza Hut
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KFC
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Ø Ø
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Launched in 1993 and relaunched in 2004 Offer Fast Food Services At present 46 s
tores outlets in 11 cities Plans to open 75 outlet within 2009 and 130 within 20
10
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Pizza Hut 147 outlet in India 12,500 restaurants across 91
3. Domino’s Pizza
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First launched in 1996 22 outlets in 42 cities Leads in fast food delivery segme
nt At present > 8500 stores functions across 55 International Markets
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4. NIRULA’S
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Foundation laid with ‘Hotel India’ in 1934
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In 2006, acquired by Mr Samir Kuckreja & Navis Capital Partner
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Diversified into other retail formats like Express outlet Ice Cream Kiosks Food
Courts etc
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Presently 62 units across India
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Plans to increase 200 by 2011
5. CITY MAX HOSPITALITY
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Part of Dubai based landmark group Master Franchise of Specialty coffees like
Australian Coffee Chain Gloria Jeans coffees
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Currently 5 outlets in country Plans to open 20 more in 2009
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6. BARISTA
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Started in 2000
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Witnessed 25 % growth
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Plan to double the store in next three years
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Lounge format is to upgrade consumer to next level of Barista Experience
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Barista Crème – newly developed for Premium chain of Cafés
7. CAFÉ COFFEE DAY
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Part of India’s Largest Coffee Conglomerate named Amalgamated Bean Coffee Trading
Company Ltd
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Pioneer in Café concept and first Café at Brigade road in 1996
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Currently owns 745 Cafes in around 111 cities
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Plan to have 900 by end of Fiscal Year.
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‘Coffee Day Square’ – newly introduced Format
OPPORTUNITIES

94 % of Food Sector is under Unorganized India’s urban

CHALLENGES

Stiff Competition from International Players Increasing Rentals in Malls & High
Streets High level of attrition, licensing Issues Increasing Real Estate Prices
Operational Issues like Quality,
Merchandise management
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Process by which retailer attempt to offer the right quantity of the right produ
ct at right place and time.
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Components of merchandise magt.
analysis planning Merchandise magt. control acquisition handling
NEW STRATEGIES IN in-STORE MERCHANDISING.
A transforming economy has reinvigorated merchandising effort, but the face of m
erchandising has fundamentally changed. After moderating slightly in 2007, decli
ne in presence in traditional grocery display has accelerated. - Displays are he
re to stay.
Innovation is driving the industry: in-store TV, RFID-based electronic shelf-tal
kers, digital screens.
To compete in a transforming economy, marketers are relying heavily on price to
drive purchase. Clear communication of a solid value proposition is critical to
retailers’ basket building efforts.- Marketers are well focused on merchandising t
hat is in alignment with consumer goals rather than as simply a means of selling
more product. Grocery retailers must reduce reliance on price only strategies,a
nd turn to affordable meal solutions that target key consumer segments on a mark
et level.
Consumer response to merchandising efforts has eroded slightly overall, but the
pace of erosion has slowed across channels. High-response categories play a key
role in driving traffic and building basket size.Categories which are typically
high-use categories with a long shelf-life, present significant opportunity for
retailers and manufacturers.