Orgainsed Retailing: A threat to traditional Retail? RPG's Spencer doesn't think so......

With organized retail having a mere four per cent market in the country, it did not pose any threat to the traditional kirana traders, a top official of supermarket chain, Spencer’s said on 14 December.

“We are in the Indian market for about a century now and do not pose any kind of threat to traditional trade which still dominates about 96% of the total market,” said Samar Sheikhawat, vice president, Spencer’s Retail Ltd.

Asserting that supermarket giants had the right to operate anywhere in the country, he said it was quite unfortunate that retail traders in Kerala’s Malabar region were opposing entry of MNCs in the retail sector.

“In China, where foreign direct investment was allowed in the retail sector 10 years ago, traditional trade enjoys 90% of the total market even now,” Sheikhawat said, adding even in India Spencer’s was able to peacefully co-exist with other retailers in different parts of the country.

Part of the multi-crore RPG Group, Spencer’s has 350 stores in 55 cities across the country and is planning to open up 5,000 outlets by 2011, he said.

Announcing the launch of its first “Hyper Format” in Kerala here, Sheikhawat said it would provide international shopping experience to the customers.

Pantaloon plans major expansion drive even as Reliance goes slow

Even as Reliance Industries Ltd’s Reliance Retail venture said it
would have a tough time meeting ambitious targets for expansion,
Pantaloon Retail India Ltd, India’s largest listed retailer, said it will
spend Rs800 crore to have 10-11 million sq. ft space for the year
ending June from the current 6 million sq. ft retail space.

The expansion will help Pantaloon compete with large domestic
and international companies entering the retail space, chief executive
Kishore Biyani had said at the company’s 20th annual shareholders
meeting on Thursday.Those competitors include Reliance Retail,
which has faced mounting protests in several states over its expanding
retail presence.

The company said on Thursday that meeting its target of 100 million
sq. ft of retail space by 2010/11 would be difficult after protests forced
the closure of some stores.

“It’s a tough challenge at this point of time but we certainly think we
would make a good go at it,” said Bijou Kurien, president and chief
executive of the lifestyle segment, referring to a target set last
November. The company currently operates more than 390 stores
in 16 cities, spanning 1.5 million sq. ft.

But in October, Reliance ended the services of about 400 franchisees
for planned operations in West Bengal state and has shelved a roll-out
in neighbouring Orissa because of protests from small traders, who fear
major job losses.

Reliance Retail in September laid off 1,000 staff in northern Uttar
Pradesh after the state shut 10 Reliance Fresh supermarkets following
similar protests. By spending more than $5.5 billion (Rs21,615 crore) on
its retail venture, the firm had planned to open about 500 Reliance
Fresh supermarkets in the Communist-ruled West Bengal and about
150 in Orissa. “2008, 2009 and 2010 would be the three critical years
in terms of property addition so far as we are concerned,” said Kurien
at the launch of the company’s first jewellery store in Bangalore.

Modern retail faces political obstacles in India because of fears millions
of small shopkeepers could lose their jobs in the fragmented but fast-growing
industry that is forecast to double in size by 2015 from an estimated
$350 billion.

India limits foreign multiple-brand retailers to wholesale or franchise
and licence operations. Talk of easing foreign investment rules have
cooled in recent months, prompting Tesco Plc. and Carrefour SA to
cool India plans.

Large Indian firms, including the Tata Group, the Aditya Birla group
and RPG Group have been stepping up investments to tap growing
consumer spending in Asia’s third-largest economy. Kurien said
Reliance Retail plans to open 300 jewellery stores across India in
the next three years.

Meanwhile, asked by several investors how Pantaloon would deal
with competition posed by large companies such as Reliance,
Pantaloon’s Biyani said: “We should not worry about competition
because the market is expanding. We are looking to create a dominant
position in the eight big cities.”

He said the company would seek to set up more stores of the existing
chains and its other brands to the metro cities to get a head start
on competition. “Our first-mover advantage will be big,” Biyani said.
“Retail is a business where you learn doing and others will go through
a learning curve.”

The company’s current 75- store discount hypermarket chain, Big Bazaar,
will get to 100 stores by February and 120 by June, he said. It will also
add four stores to its six Brand Factory stores—its discounted brand
store—and 20 E-Zone stores—its consumer durables and electronics
store chain— to its current seven stores.

ITC in expansion of Chaupal Fresh

ITC is targeting a pan-India presence for its Choupal Fresh stores. Riding on
the success of stores in Hyderabad, Pune and Chandigarh, the company

is mapping out plans to open these in over 50 new locations. It will set up at

least 10 stores in each location over the next two years.

The proposed expansion will also focus on strengthening its farm linkages in
different states, besides setting up front end stores. The company is likely to
spend over Rs 200 crore by March 2008 to open these new stores. It is also in
talks with a host of retail chains for supplying fresh produce, again buoyed by
the experiment with Q Mart and Food Bazar.

“We are not only talking to more chains for such an arrangement but are also
planning to ramp up this model with existing partners in other locations across
the country,” a senior ITC official told ET. ITC’s existing partners are retail chains
like Food Bazaar to whom it supplies fresh produce.

This would mean bringing more than 2,500 acres under its farm linkages
programme. This model entails partnership with farmers along with a
commitment to source their produce. The company advises farmers on the
crops to be grown and the cropping patterns. It also helps in sourcing high
quality seeds to ensure that the end product matches ITC sourcing standards.

Apart from the ten stores planned for each city, ITC is also looking at creating
a couple of cash and carry outlets in all the locations. The company’s cash and
carry outlets — providing grade-A and grade-B vegetables and fruits in
Hyderabad - is reckoned to have been a success with push-cart vendors
and commercial establishments like hotels and restaurants, said company
officials.

“Choupal fresh stores work on the model of selling the same day’s produce
that we source from local farmers,” S Sivakumar chief executive Agri
Business ITC told ET.

In Andhra alone the company plans to scale up its farm linkages to over
,200 acres by the end of this fiscal. It plans to add 13 more stores to its
existing seven in the city of Hyderabad. “We may add another five clusters
soon and are already in talks with farmers for greater engagement,” he said.
ITC is also working with farmers on the cultivation of exotic varieties like
broccoli, yellow and red capsicum, Chinese cabbage, lettuce and so on.
For this, farmers are trying out both polyhouse and open-air cultivation,
which are inspected regularly by ITC agri field experts.

Marks n Spencers with Food and kidswear in India..

UK based retailer Marks & Spencer is all set to foray into high volume
food and kids wear retailing here in India. Marks & Spencer's presence
in India is through master franchisee Planet Retail.


Marks & Spencer has witnessed slow growth in India. To boost volumes,
the company slashed prices and is also getting into new verticals such
as food and kids wear. The first store that will retail this merchandise
is the 20,000 sft flagship store at Gurgaon in the NCR. Both these
segments will be part of existing stores and not be standalone stores.
The chain as a whole believes in large format stores.

The food segment of the store will stock biscuits, confectioneries,
groceries, savories and a special celebration range of the festive
season priced between Rs 95 to Rs 1,800 for high end items. Company
official said that Marks & Spencer aims to provide ultimate quality of
food to the Indian consumer. Keeping mind the Indian taste and
international standards, the company plans to compete with other
retailers.

In the Kids wear segment, the prices will range from Rs 395 to
Rs 3000. The company admitted that the prices will be higher than
local brands, but they said they are offering value to consumers.

Introduction

I made this blog for discussion on current retail. As we all know that the word retail is originally come from the word Retailia which is a french word. So i decided to give the same name to this blog.

In India organized retail has started to flourish.With the entrance of companies like walmart will definetly boost up the Indian retail Market. India is a country which is dominated by the small unorganized retail stores. And what i think that Indian customers having a myth that the organized retail sell the goods in a much higher rate than the unorgainzed sector. Well if walmart want to be successful in india , first of all it must break this myth.
There is no lack of potential in India. And especially when the organised retail is only 3.5 % in the country , there is an open invitation to the retail giants to come and get set in such a huge market,,,,