Abstract

This paper provides detailed information about the growth of retailing industry in India. It examines the
growing awareness and brand consciousness among people across different socio-economic classes
in India and how the urban and semi-urban retail markets are witnessing significant growth. It explores
the role of the Government of India in the industry�s growth and the need for further reforms. In
India the vast middle class and its almost untapped retail industry are the key attractive forces for
global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry
to grow faster. The paper includes growth of retail sector in India, strategies, strength and opportunities
of retail stores, retail format in India, recent trends, and opportunities and challenges. This paper
concludes with the likely impact of the entry of global players into the Indian retailing industry. It also
highlights the challenges faced by the industry in near future.

INTRODUCTION

The India Retail Industry is the largest among all the industries, accounting for over 10 per cent of the
country�s GDP and around 8 per cent of the employment. The Retail Industry in India has come
forth as one of the most dynamic and fast paced industries with several players entering the market.
But all of them have not yet tasted success because of the heavy initial investments that are required
to break even with other companies and compete with them. The India Retail Industry is gradually
inching its way towards becoming the next boom industry. 

The total concept and idea of shopping has undergone an attention drawing change in terms of format
and consumer buying behavior, ushering in a revolution in shopping in India. Modern retailing has
entered into the Retail market in India as is observed in the form of bustling shopping centers, multi-
storied malls and the huge complexes that offer shopping, entertainment and food all under one roof. 

A large young working population with median age of 24 years, nuclear families in urban areas, along
with increasing workingwomen population and emerging opportunities in the services sector are going
to be the key factors in the growth of the organized Retail sector in India. The growth pattern in
organized retailing and in the consumption made by the Indian population will follow a rising graph
helping the newer businessmen to enter the India Retail Industry. 

In India the vast middle class and its almost untapped retail industry are the key attractive forces for
global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry
to grow faster. Indian retail is expected to grow 25 per cent annually. Modern retail in India could be
worth US$ 175-200 billion by 2016. The Food Retail Industry in India dominates the shopping basket.
 The Mobile phone Retail Industry in India is already a US$ 16.7 billion business, growing at over 20
per cent per year. The future of the India Retail Industry looks promising with the growing of the
market, with the government policies becoming more favorable and the emerging technologies
facilitating operations.

THE INDIAN RETAIL SCENE

India is the country having the most unorganized retail market. Traditionally it is a family�s livelihood,
with their shop in the front and house at the back, while they run the retail business. More than 99%
retailer�s function in less than 500 square feet of shopping space. Global retail consultants KSA
Technopak have estimated that organized retailing in India is expected to touch Rs 35,000 crore in the
year 2005-06. The Indian retail sector is estimated at around Rs 900,000 crore, of which the organized
sector accounts for a mere 2 per cent indicating a huge potential market opportunity that is lying in the
waiting for the consumer-savvy organized retailer.

Purchasing power of Indian urban consumer is growing and branded merchandise in categories like
Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even Jewellery, are slowly becoming
lifestyle products that are widely accepted by the urban Indian consumer. Indian retailers need to
advantage of this growth and aiming to grow, diversify and introduce new formats have to pay more
attention to the brand building process. The emphasis here is on retail as a brand rather than retailers
selling brands. The focus should be on branding the retail business itself. In their preparation to face
fierce competitive pressure, Indian retailers must come to recognize the value of building their own stores
as brands to reinforce their marketing positioning, to communicate quality as well as value for money.
Sustainable competitive advantage will be dependent on translating core values combining products,
image and reputation into a coherent retail brand strategy.

There is no doubt that the Indian retail scene is booming. A number of large corporate houses �
Tata�s, Raheja�s, Piramals�s, Goenka�s � have already made their foray into this arena,
with beauty and health stores, supermarkets, self-service music stores, newage book stores, every-day-
low-price stores, computers and peripherals stores, office equipment stores and home/building
construction stores. Today the organized players have attacked every retail category. The Indian retail
scene has witnessed too many players in too short a time, crowding several categories without looking at
their core competencies, or having a well thought out branding strategy. 

STRATEGIES, TRENDS AND OPPORTUNITIES 2007

Retailing in India is gradually inching its way toward becoming the next boom industry. The whole concept
of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in
shopping in India. Modern retail has entered India as seen in sprawling shopping centres, multi-storied
malls and huge complexes offer shopping, entertainment and food all under one roof. The Indian retailing
sector is at an inflexion point where the growth of organized retailing and growth in the consumption by
the Indian population is going to take a higher growth trajectory. The Indian population is witnessing a
significant change in its demographics. A large young working population with median age of 24 years,
nuclear families in urban areas, along with increasing workingwomen population and emerging
opportunities in the services sector are going to be the key growth drivers of the organized retail sector in
India.

GROWTH OF RETAIL SECTOR IN INDIA

Retail and real estate are the two booming sectors of India in the present times. And if industry experts
are to be believed, the prospects of both the sectors are mutually dependent on each other. Retail, one of
India�s largest industries, has presently emerged as one of the most dynamic and fast paced
industries of our times with several players entering the market. Accounting for over 10 per cent of the
country�s GDP and around eight per cent of the employment retailing in India is gradually inching its
way toward becoming the next boom industry.

As the contemporary retail sector in India is reflected in sprawling shopping centers, multiplex- malls
and huge complexes offer shopping, entertainment and food all under one roof, the concept of
shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in
shopping in India. This has also contributed to large-scale investments in the real estate sector with
major national and global players investing in developing the infrastructure and construction of the
retailing business. The trends that are driving the growth of the retail sector in India are

 Low share of organized retailing

 Falling real estate prices
 Increase in disposable income and customer aspiration
 Increase in expenditure for luxury items (CHART)

Another credible factor in the prospects of the retail sector in India is the increase in the young working
population. In India, hefty pay packets, nuclear families in urban areas, along with increasing working-
women population and emerging opportunities in the services sector. These key factors have been the
growth drivers of the organized retail sector in India which now boast of retailing almost all the
preferences of life - Apparel & Accessories, Appliances, Electronics, Cosmetics and Toiletries, Home &
Office Products, Travel and Leisure and many more. With this the retail sector in India is witnessing
rejuvenation as traditional markets make way for new formats such as departmental stores,
hypermarkets, supermarkets and specialty stores. 

The retailing configuration in India is fast developing as shopping malls are increasingly becoming
familiar in large cities. When it comes to development of retail space specially the malls, the Tier II
cities are no longer behind in the race. If development plans till 2007 is studied it shows the projection
of 220 shopping malls, with 139 malls in metros and the remaining 81 in the Tier II cities. The
government of states like Delhi and National Capital Region (NCR) are very upbeat about permitting
the use of land for commercial development thus increasing the availability of land for retail space; thus
making NCR render to 50% of the malls in India.
India is being seen as a potential goldmine for retail investors from over the world and latest research
has rated India as the top destination for retailers for an attractive emerging retail market. India�s
vast middle class and its almost untapped retail industry are key attractions for global retail giants
wanting to enter newer markets. Even though India has well over 5 million retail outlets, the country
sorely lacks anything that can resemble a retailing industry in the modern sense of the term. This
presents international retailing specialists with a great opportunity. The organized retail sector is
expected to grow stronger than GDP growth in the next five years driven by changing lifestyles,
burgeoning income and favorable demographic outline. 

INDUSTRY EVOLUTION

 Traditionally retailing in India can be traced to

 The emergence of the neighborhood �Kirana� stores catering to the convenience of the
consumers
 Era of government support for rural retail: Indigenous franchise model of store chains run by
Khadi & Village Industries Commission
 1980s experienced slow change as India began to open up economy.
 Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw
the emergence of retail chains
 Later Titan successfully created an organized retailing concept and established a series of
showrooms for its premium watches
 The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure
Retailers.
 For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in
music; Crossword and Fountainhead in books.
 Post 1995 onwards saw an emergence of shopping centers
 Mainly in urban areas, with facilities like car parking
 Targeted to provide a complete destination experience for all segments of society
 Emergence of hyper and super markets trying to provide customer with 3 V�s - Value, Variety
and Volume
 Expanding target consumer segment: The Sachet revolution - example of reaching to the bottom
of the pyramid.
 At year end of 2000 the size of the Indian organized retail industry is estimated at Rs. 13,000
crore

RETAILING FORMAT IN INDIA

Malls:
The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban
outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping
 experience with an amalgamation of product, service and entertainment, all under a common
roof. Examples include Shoppers Stop, Piramyd, and Pantaloon. 
Specialty Stores:

Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's
Music World and the Times Group's music chain Planet M, are focusing on specific market
segments and have established themselves strongly in their sectors.

Discount Stores:

As the name suggests, discount stores or factory outlets, offer discounts on the MRP through
selling in bulk reaching economies of scale or excess stock left over at the season. The product
category can range from a variety of perishable/ non-perishable goods.

Department Stores:

Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Further
classified into localized 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.

Hyper marts/Supermarkets:

Large self-service outlets, catering to varied shopper needs are termed as Supermarkets. These are
located in or near residential high streets. These stores today contribute to 30% of all food & grocery
organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000
sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong
focus on food & grocery and personal sales.

Convenience Stores:

These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited
range of high-turnover convenience products and are usually open for extended periods during the
day, seven days a week. Prices are slightly higher due to the convenience premium

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.

RECENT TRENDS

 Retailing in India is witnessing a huge revamping exercise as can be seen in the graph
 India is rated the fifth most attractive emerging retail market: a potential goldmine.
 Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3
percent or US$ 6.4 billion
 As per a report by KPMG the annual growth of department stores is estimated at 24%
 Ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT
Kearney.
 Multiple drivers leading to a consumption boom:
o Favorable demographics
 o Growth in income
o Increasing population of women
o Raising aspirations: Value added goods sales
 Food and apparel retailing key drivers of growth
 Organized retailing in India has been largely an urban
 Phenomenon with affluent classes and growing number of double-income households.
 More successful in cities in the south and west of India. Reasons range from differences in
consumer buying behavior to cost of real estate and taxation laws.
 Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural
market across most categories of consumption
o ITC is experimenting with retailing through its e-Choupal and Choupal Sagar � rural
hypermarkets.
o HLL is using its Project Shakti initiative � leveraging women self-help groups � to
explore the rural market.
o Mahamaza is leveraging technology and network marketing concepts to act as an
aggregator and serve the rural markets.
 IT is a tool that has been used by retailers ranging from Amazon.com to eBay to radically change
buying behavior across the globe.
 �E-tailing� slowly making its presence felt.

RETAIL SALES IN INDIA

CHALLENGES & OPPORTUNITIES

Retailing has seen such a transformation over the past decade that its very definition has undergone a
sea change. No longer can a manufacturer rely on sales to take place by ensuring mere availability of his
product. Today, retailing is about so much more than mere merchandising. It�s about casting
customers in a story, reflecting their desires and aspirations, and forging long-lasting relationships. As the
Indian consumer evolves they expects more and more at each and every time when they steps into a
store. Retail today has changed from selling a product or a service to selling a hope, an aspiration and
above all an experience that a consumer would like to repeat. 

For manufacturers and service providers the emerging opportunities in urban markets seem to lie in
capturing and delivering better value to the customers through retail. For instance, in Chennai
CavinKare�s LimeLite, Marico�s Kaya Skin Clinic and Apollo Hospital�s Apollo Pharmacies are
examples, to name a few, where manufacturers/service providers combine their own manufactured
products and services with those of others to generate value hitherto unknown. The last mile connect
seems to be increasingly lively and experiential. Also, manufacturers and service providers face an
exploding rural market yet only marginally tapped due to difficulties in rural retailing. Only innovative
concepts and models may survive the test of time and investments. 
However, manufacturers and service providers will also increasingly face a host of specialist retailers,
who are characterized by use of modern management techniques, backed with seemingly unlimited
financial resources. Organized retail appears inevitable. 

Retailing in India is currently estimated to be a US$ 200 billion industry, of which organized retailing
makes up a paltry 3 percent or US$ 6.4 billion. By 2010, organized retail is projected to reach US$ 23
billion. For retail industry in India, things have never looked better and brighter. Challenges to the
manufacturers and service providers would abound when market power shifts to organized retail. 

CONCLUSION

The retail sector has played a phenomenal role throughout the world in increasing productivity of
consumer goods and services. It is also the second largest industry in US in terms of numbers of
employees and establishments. There is no denying the fact that most of the developed economies are
very much relying on their retail sector as a locomotive of growth. The India Retail Industry is the largest
among all the industries, accounting for over 10 per cent of the country�s GDP and around 8 per cent
of the employment. The Retail Industry in India has come forth as one of the most dynamic and fast
paced industries with several players entering the market. But all of them have not yet tasted success
because of the heavy initial investments that are required to break even with other companies and
compete with them. The India Retail Industry is gradually inching its way towards becoming the next
boom industry.

ABSTRACT:
Retail is being hailed as India’s industry of the future, incited by the country’s huge urban middle class population.
Food and grocery is the second-largest segment of the retail industry and the potential for new entrants in this
segment is enormous, particularly in untapped markets like rural and semi-rural areas. Growing at the rate of
30%, the Indian food retail is going to be the major driving force for the retail industry. The paper on “FOOD
RETAIL –AN EMERGING FACET” maps out the Background of food retailing as well as current scenario catching
up the retail front, Up-and-coming multiple formats of food retail.
INTRODUCTION:
The food industry is on a roller coaster ride as Indians continue to have a feast. Fuelled by– large disposable
incomes – the food sector is witnessing a remarkable change in consumption patterns, especially in terms of food.
Food retailing has come of age -- from a period when food items were sold in small road side grocer shops &
mandis, haats and bazzars by vendors to a stage when food products (processed and groceries) are retailed
through supermarket stores where consumers can inspect, select and pick up the products they like in a
comfortable ambience and still pay a fair price for the product and the merchandise and sometimes even pay less
than the price they would have paid at the nearest food stores. Shopping for groceries is no longer a strenuous and
uncomfortable affair.

Instead, it is a pleasurable experience. From simple trading activity, food retailing is now heading to the status of
an industry. Imagine yourself walking through the air conditioned lanes smelling fresh food and groceries, enjoying
light music, experiencing five star ambiences and above all buying food products (vegetables, spices and
beverages) without bargaining with the vendors. Food retail has surpassed the dominating apparel and accessories
sector. "Contrary to the belief that fashion is the largest segment of organised retail in India, food & beverages is
the major segment, worth Rs 8,97,000 crore," said Arvind Singhal, Chairman, Technopak, at the Indian Retail
Forum held in Mumbai. There is an old industry saying that “ customer is king” Food retailers today will update that
saying to “customers is the dictator” because of fierce competition, new technology and business practices the
market power of customer is strong and growing stronger.

THE FOOD RETAIL TALE:

Traditionally, Indians were used to buying their sugar, wheat, pulses, rice etc. from their neighborhood baniya. The
majority of food and food products were and still are retailed through neighborhood kirana (baniya) stores. A
typical kirana store has a retail area of 200 sq ft and sells 500 to 800 stock keeping units (SKUs). The kirana stores
focus on dry food products because the infrastructure for cold storage is lacking. The majority of fresh produce is
sold from the carts of traveling vendors. Such produce is deemed to be of low product quality, variety and hygiene.
This concept is still popular in B-class and II Tier cities of India and giving employment to thousands of its
inhabitants.

Initially the food retail format was seen in A-class cities like Mumbai, Delhi, Chennai which had co-operative stores
like "Apna Bazaar" in Mumbai and "Kendriya Bhandar" in Delhi. Both were very successful and are operating many
outlets in all strategic localities in the city. Escorts group in the late eighties diversified into non-auto sectors by
getting into agri business or food business. It came out with first "Nanz" store at South Extension in Delhi in 1990.

The first visible sign of the change in food retailing was seen in mid-eighties. Around that time a few new food
stores were set up in all metro cities in India. Calcutta was the only exception where it started a little later. At that
time couple of leading food stores started operating such as "Morning Stores" and "Modern Stores" in Delhi,
"Nilgiri" in Bangalore, and “Food Land" in Mumbai "Spencers Food Stores" in Chennai. Spencers were the first to tie
up with a Singapore based large retail chain -- "Dairyland" and had set up the food stores in Chennai. This was a
technology tie up. In Mumbai, Garware group during the late eighties had set up a large food store, which is now
reported to have been closed down.

Until the late 1990s, food retailing has been concentrated in the south of the country. Southern India has been
witnessing revolutionized activity in food retailing. It has thoroughly experienced the food retailing in various
formats such as the supermarkets, hypermarkets and neighbourhood stores. These include Food World, Subhiksha,
Nilgiris, Margin Free, and Big Bazaar. The reason being that most entrepreneurs who started organised retail came
from southern India and the cost of real estate in the southern region was less than other regions (particularly
north and west). Since then, however, organised food retailing has emerged across the country, inspired by the
presence of high potential markets in the north, west and east as well as the success of some non-food retailers
and food services companies in these regions.
FOOD RETAILING – THE BUZZ WORD:
Indian retail food industry has revolutionized shopping experience of Indian customers. Growing at the rate of
30%, the Indian food retail is going to be and no doubt is the major driving force for the retail industry. Food
accounts for the largest share of consumer spending. Food and food products account for about 50% of the value
of final private consumption. This share is significantly higher compared to developed economies, where food and
food products account for about 20% of consumer spending. Ireena Vittal, principal, McKinsey & Co in Food Forum
2008, said, "At US$ 175 billion today the food industry is likely to grow to US$ 400 billion by 2025. The percentage
of income spent in households will drive growth in the food market. Indian consumers are happy with store goods
than branded goods and are very conservative on packaged goods. There are 10 million street vendors in India, of
which 6 million only sell food. Currently, the retail food sector is US$ 70 billion and is expected to rise to US$ 150
billion by 2025. Food has the largest consumption in the Indian economy and will remain the single largest
category."

Modern state of the food retailing is not a demand led but the supply led one. Major spending on food and
increasing usage of out of home food consumption represent a significant opportunity for food retailers and food
service companies. Speaking in Food Forum India 2008, on the government's role in the food retailing
development, Dave said, "The retail stores need to empower its stakeholders and deliver what the consumer
wants. The vision for 2020 should be appropriate extension network, implementation of appropriate practice at
farmers' level and infrastructure in the country."

There are various factors paving the way to revolutionizing food retailing in India. Among them few are:

 Changing life styles and tastes

 Growing need for convenience
 Increasing disposable income
 Increasing numbers of working women
 Change in consumption patterns
 Higher aspirations among youth
 Impact of western lifestyle
 Plastic Revolution – Increased use of credit cards and debit cards

UP-AND-COMING FOOD RETAIL FORMATS:

With the changing food consumption patterns, consumers need for convenience, choice and value for money the
set-up of retail format is changing. The Indian consumers do visit about eight to ten outlets to purchase various
food products, which make up the daily consumption basket. These outlets include neighbourhood kirana stores,
bakeries, fruit and vegetable outlets, dairy booths and chakkies (small flour mills), which is very time-consuming
and unproductive way of shopping for food. With changing lifestyle there is growing scarcity of time, and
convenience in food shopping is emerging as an important driver of growth of one-stop retail formats that can offer
consumer 'value for time' in addition to 'value for money'. These are giving an opportunity to various other retail
formats:

A. Neighbourhood Stores

In India about 90% of food purchases are made within a distance of 1.5 km from the customer's home. This means
that an organised retailer would need to have a 'neighbourhood store' close to customers in order to capture the
share of wallet that is spent on food. These stores would cater to the consumer's daily and weekly needs. The
outlets closest to a neighbourhood store in India are 'Safal' outlets operated by Mother Dairy in Delhi, Margin Free
in Kerala and Subhiksha.
B. Supermarkets

This format caters to the consumers' need for choice and variety. These needs translate into 'more width' and
'more depth' in each category. These stores cater to the consumers in a catchment area with a radius of 3 to 4 km
and therefore need to be destination stores. A supermarket can cater to the consumers' weekly, monthly and
occasional needs. Examples of supermarkets already in India are Food World, Trinetra and Nilgiri's.

C. Hypermarkets

Hypermarkets are essentially destination stores catering to the consumers' bulk shopping needs in both food and
non-food categories. The key added values for the customer are 'choice' and 'value for money' because products
are sold at a discounted price. The hypermarkets model of food retailing is new to India. Spencers (RPG), Big
Bazaar (Pantaloons), Star India Bazaar.

D. Cash & Carry (C & C) Stores

These stores sell their products to their members only. The members are typically retailers and institutions. The
key added value is a wide range of products under one roof, available at wholesale prices. Metro has started the
first C & C store in India in Bangalore. The typical area of a C & C store is 70,000 to 100,000 sq. ft. and both food
and non-food products are stocked.

KEY DEVELOPMENTS IN FOOD RETAIL:

The major development in food retail is consideration of Foreign Direct Investment (FDI) with a limitation that all
companies would have to meet mandated export obligations. Food processing minister Subodh Kant Sahay told ET
that “We are considering a proposal to allow FDI in food retail. It should be in such a way that it would boost our
agriculture. Our farmers must also get benefits of economic liberalization”.

The government is also considering the opening up of the $330-billion retail market with adequate provisions to
protect neighborhood stores.

In every retail format food trade is growing. More and more corporate houses such as HLL, ITC, Godrej and
Reliance are already working into food retail. Huge increase is expected from the corporate players, which will
help grow the entire food retail sector. Dabur’s Amit Burman has also forayed into food retailing. According
to Amit "Food and beverages retailing is a very attractive segment and with Lite Bite Concepts we are targeting Rs
1,000 crore sales in a couple of years with around 200 outlets," Well-established players such as Subhiksha, Food
Bazaar and Spencer's Daily are also tapping into backward linkages, while trying to match their expanding
geographies with retail formats. Also, most food retail players have been region-specific as far as geographical
presence is concerned. Take the RPG Group's FoodWorld, Nilgiris, Margin Free, Giant, Varkey's, all of which are
more or less spread in the Southern region; Sabka Bazaar, Big Apple has a presence only in and around Delhi;
names such as Haiko and Radhakrishna Foodland are Mumbai-centric; while Adani is Ahmedabad-centric.

Retailers' entrance in the unbranded food space

Modern food formats like Food Bazaar and Spencer's have their eye on the unbranded part of the consumer's
shopping basket. This constitutes as much as 60% of the total purchases and growing sharply, says AC Nielsen
estimates. Retailers are offering a package of convenience and freshness, and have an edge over manufacturers
that focus mainly on packaged conveniences.

Food retailers are offering 'live kitchen' formats, which offer on-the-spot home-style gravies, dal, cooked rice and
kneaded dough with options like grinding coffee fresh at store, idli batter, paneer, curd and cut vegetables.
FOOD RETAIL AND ITS STEPPING STONES:

The opportunities in food retail sector are as follows:

Rising Investment: There are strong opportunities in food retail as a result of encouraging changes in consumer
purchasing patterns, the availability of real estate and supply chain development. Organised food retail presents a
unique investment opportunity for corporates looking to diversify. A good understanding of consumer, access to
the right locations and the ability to manage the supply chain efficiently will be critical success factors for the new
entrant.

FDI Policy for Retail: Gates have been opened up for single brand retailers. In February 2006, the door was
opened to some extent when the government allowed 51% FDI by single brand companies subject to government
approvals.

Emergence Of Logistic Providers: The present lack of logistic support exposes the need for an integrated
logistic provider. As retail activity gathers momentum and large quantities of perishables are sold in modern
formats, the logistic service providers would have a crucial role to play in bridging the supply gap. Retail players
would also benefit from an efficient supply chain inventory management.

CONCLUSION:
The past 4-5 years have seen increasing activity in food retailing. Various business houses have already planned
for few investments in the coming 2-3 years. Though the retailers will have to face increasingly demanding
customers and intensely competitive rivals, more investments will keep flowing in and the share of organized food
sector will grow rapidly.

Organized food retailing in India is surely poised for a takeoff and will provide many opportunities both to existing
players as well as new entrants.

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•http://www.thehindubusinessline.com/catalyst/2003/06/19/stories/
2003061900010100.htm

• http://www.etretailbiz.com/feb2004/fRetail.html

• www.tata.com/trent/media/20031113.htm - 15k

• www.ficci.com/news/viewnews1.asp?news

• www.fnbnews.com/article/detnews. asp?articleid

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Also, most food retail players have been region-specific as far as geographical presence is concerned. Take the RPG
Group's FoodWorld, Nilgiris, Margin Free, Giant, Varkey's and Subhiksha, all of which are more or less spread in the
Southern region; Sabka Bazaar has a presence only in and around Delhi; names such as Haiko and Radhakrishna
Foodland are Mumbai-centric; while Adani is Ahmedabad-centric.
The unbranded part of the consumer's shopping basket, which constitutes as much as 60% of the total purchases
and growing sharply, say AC Nielsen estimates. Retailers are offering a package of convenience and freshness, and
have an edge over manufacturers that focus mainly on packaged conveniences.

Food retailers are offering 'live kitchen' formats, which offer on-the-spot home-style gravies, dals, cooked rice and
kneaded dough with options like grinding coffee fresh at store, idli batter, paneer, curd and cut vegetables.

Innovate and Prosper: the Success Mantra of Indian Retailers

India, the land of miracle, has witnessed a retail revolution in the past few decades. The organized retail in India has leisurely grown
in the past few years. According to the India Retail Report 2009, the retail industry will touch Rs 18, 10,000 crore by the year 2010
and the organized retail is expected to contribute 13% of it i.e. Rs. 2, 30,000 crore. The retail industry has contributed immensely
towards the employment generation and the GDP of the Indian landscape. However, in the past few years, the Indian retail industry
has been traumatized by the slowdown.
Almost all the sectors of the Indian economy have experienced a downward trend, Retail is no exception. Falling footfalls and
changing consumer behaviour has been a major problem for the Indian retailers in the recent past. According to a research report
by KPMG “Falling footfalls and poor conversion ratio has lead to a decline in sales growth to 11 percent in December 2008
compared to 35 percent in December 2007”. The industry estimates also points out that the footfalls are down by 25 – 30 percent on
the weekdays while on the weekends they have decreased by almost 40 percent. Although the situation is tough but the Indian
retailers look all set to go. With efficient formation and implementation of strategies, the retailers have taken all possible measures to
attract the customers. “Innovation” is the buzz word in the Indian landscape today. A lot many retailers are focussing on adapting
innovative concepts to create an excitement amongst the customers. Innovation either by the way of store designs, retailing formats,
pricing strategies or technology has been fruitful for the retailers.
Innovations in Store Designs
In this high competitive era, the customers want to feel and experience a concept that has never been seen before. Keeping this fact
in mind, the Indian retailers are directing all the efforts in providing innovative concepts for the customers. For instance, the first Ice
bar was launched in Mumbai, India. With minus 6 degrees temperature, rooms made of ice, drinks in an ice glass, ice chairs and a
cozy environment, the ice bar happens to be one of the most innovative concepts in the recent times. Similarly, numerous retailers
are trying to provide the customers with concepts that have never been experienced before.
Innovations in Retail formats
The Indian retail markets have been flooded with a lot of departmental stores, supermarkets, hypermarkets, specialty stores etc. in
the past few decades. However, moving forward, a lot of innovative formats have found their way in the Indian retail. For instance
“Wedding Malls”, a retailing format that has seen major success in the American and European markets, are fast becoming a
popular format of the Indian retail. These wedding malls provide almost all the products such as jewellery, apparels etc.  that are
essential in the Indian marriages.  Another example can be “Khadi Plazas”, a project that is run by Khadi and Village Industries
commission. These outlets mainly promote and showcase the exquisite designs of the handicraft products manufactured in the
Indian villages. The main objective is to attract the attention of the people.
Innovations in Pricing Strategy
One of the most vital “P” in the retail marketing mix is “Price”. The pricing decisions are not only crucial from the financial viewpoint
but it also has a great impact on stimulating the demand of the customers. Therefore, it is today seen as a strategic decision. Indian
people are known to be price conscious and require value for their money. Most of the times, the retailers are also complimenting
their pricing strategies with numerous innovative policies to attract and retain the customers. For instance, Big Bazaar introduced its
Mano ya na Mano offer under which if a customer buys a particular item, he gets a related item free of cost. Another example can
be “Sabse Saste 4 din” by Big Bazaar or “Wednesday Bazaar” by Pantaloons wherein the products are provided at discounted price
to the customers.
Innovation in Information Technology
The augmentation of internationalization and globalization saw a number of big international brands entering the Indian landscape
which has taken the Indian retail to a higher level. One factor that has contributed significantly towards the success of Indian Retail
is information technology. Technology has emerged as a boon for the Indian retail sector. Starting from the scanning of the bar
codes, managing the data of the customers, loyalty programs to the inventory management, information technology plays an
imperative role in almost all the retail operations. For instance, Radio frequency identification allows the automatic recognition of the
inventory using the radio waves. Most of the big retailers abroad such as Wal-Mart, Tesco, and Metro are making use of this new
technology. With the help of RFID, the efficiency in supply chain management and inventory management can be improvised by
using the electronic tags that assists in storing and identification of inventory. Similarly, concepts like mobile point of sale, cloud
computing, intelligent databases, E-catalogue based selling etc. has also penetrated steadily in Indian retail.
 
The Way Forward
In a customer centric era, the needs and wants of the customers are transforming rapidly. Besides the product, they require a lot
many things that can provide value to them. This need is well served by the Indian retailers through their innovative strategies. In
today’s scenario, most of the retailers are undertaking serious steps to satisfy the customers and operate profitably. The organised
retail in India has witnessed tremendous growth in the past and with these innovative strategies, it is all set to flourish in the future.