Retailing

Retail consists of the sale of goods or merchandise from a fixed location, such as a
department store, boutique or kiosk, or by mail, in small or individual lots for direct
consumption by the purchaser.
Retailing may include subordinated services, such as delivery. Purchasers may be individuals
or businesses. In commerce, a "retailer" buys goods or products in large quantities from
manufacturers or importers, either directly or through a wholesaler, and then sells smaller
quantities to the end-user.
Retail establishments are often called shops or stores. Retailers are at the end of the supply
chain. Manufacturing marketers see the process of retailing as a necessary part of their
overall distribution strategy. The term "retailer" is also applied where a service provider
services the needs of a large number of individuals, such as a public utility, like electric
power.
Shops may be on residential streets, shopping streets with few or no houses or in a shopping
mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial
or full roof to protect customers from precipitation. Online retailing, a type of electronic
commerce used for business-to-consumer (B2C) transactions and mail order, are forms of
non-shop retailing.
Shopping generally refers to the act of buying products. Sometimes this is done to obtain
necessities such as food and clothing; sometimes it is done as a recreational activity.
Recreational shopping often involves window shopping (just looking, not buying) and
browsing and does not always result in a purchase.
Retail comes from the French word retailler, which refers to "cutting off, clip and divide" in
terms of tailoring (1365). It first was recorded as a noun with the meaning of a "sale in small
quantities" in 1433 (French). Its literal meaning for retail was to "cut off, shred, paring".

Types of retail outlets

A marketplace is a location where goods and services are exchanged. The traditional market
square is a city square where traders set up stalls and buyers browse the merchandise. This
kind of market is very old, and countless such markets are still in operation around the whole
world.
In some parts of the world, the retail business is still dominated by small family-run stores,
but this market is increasingly being taken over by large retail chains.
Retail is usually classified by type of products as follows:
• Food products
• Soft goods - clothing, apparel, and other fabrics.
• Hard goods ("hardline retailers") - appliances, electronics, furniture, sporting goods,
etc.
There are the following types of retailers by marketing strategy:
• Supermarkets - sell mostly food products;
• Department stores - very large stores offering a huge assortment of "soft" and "hard
goods";
• Discount stores - tend to offer a wide array of products and services, but they compete
mainly on price;
• General merchandise store - a hybrid between a department store and discount store;
• Warehouse store - low-cost, often high-quantity goods piled on pallets or steel
shelves; warehouse clubs charge a membership fee;
• Variety store or "dollar store" - extremely low-cost goods, with limited selection;
• Demographic - retailers that aim at one particular segment (e.g., high-end retailers
focusing on wealthy individuals).
Some stores take a no frills approach, while others are "mid-range" or "high end", depending
on what income level they target.
Other types of retail store include:
• General store - a store which sells most goods needed, typically in a rural area;
• Convenience store - a small store often with extended hours, stocking everyday or
roadside items;
• Big-box stores encompass larger department, discount, general merchandise, and
warehouse stores.

Retail pricing
The pricing technique used by most retailers is cost-plus pricing. This involves adding a
markup amount (or percentage) to the retailer's cost. Another common technique is suggested
retail pricing. This simply involves charging the amount suggested by the manufacturer and
usually printed on the product by the manufacturer.
In Western countries, retail prices are often called psychological prices or odd prices. Often
prices are fixed and displayed on signs or labels. Alternatively, when prices are not clearly
displayed, there can be price discrimination, where the sale price is dependent upon who the
customer is. For example, a customer may have to pay more if the seller determines that he or
she is willing and/or able to. Another example would be the practice of discounting for
youths, students, or senior citizens.
[edit] Transfer mechanism
There are several ways in which consumers can receive goods from a retailer:
• Counter service, where goods are out of reach of buyers and must be obtained from
the seller. This type of retail is common for small expensive items (e.g. jewelry) and
controlled items like medicine and liquor. It was common before the 1900s in the
United States and is more common in certain countries.[which?]
• Delivery (commerce), where goods are shipped directly to consumer's homes or
workplaces. Mail order from a printed catalog was invented in 1744 and was common
in the late 19th and early 20th centuries. Ordering by telephone is now common,
either from a catalog, newspaper, television advertisement or a local restaurant menu,
for immediate service (especially for pizza delivery). Direct marketing, including
telemarketing and television shopping channels, are also used to generate telephone
orders. Online shopping started gaining significant market share in developed
countries in the 2000s.
• Door-to-door sales, where the salesperson sometimes travels with the goods for sale.
• Self-service, where goods may be handled and examined prior to purchase, has
become more common since the 1920s.
[edit] Second hand retail
See also: Charity shop
Some shops sell second-hand goods. In the case of a nonprofit shop, the public donates goods
to the shop to be sold. In give-away shops goods can be taken for free.
Another form is the pawnshop, in which goods are sold that were used as collateral for loans.
There are also "consignment" shops, which are where a person can place an item in a store
and if it sells, the person gives the shop owner a percentage of the sale price. The advantage
of selling an item this way is that the established shop gives the item exposure to more
potential buyers.
[edit] Sales techniques
Behind the scenes at retail, there is another factor at work. Corporations and independent
store owners alike are always trying to get the edge on their competitors. One way to do this
is to hire a merchandising solutions company to design custom store displays that will attract
more customers in a certain demographic. The nation's largest retailers spend millions every
year on in-store marketing programs that correspond to seasonal and promotional changes.
As products change, so will a retail landscape. Retailers can also use facing techniques to
create the look of a perfectly stocked store, even when it is not.
A destination store is one that customers will initiate a trip specifically to visit, sometimes
over a large area. These stores are often used to "anchor" a shopping mall or plaza, generating
foot traffic, which is capitalized upon by smaller retailers.
[edit] Customer service
According to the book "Discovery-Based Retail"[3] customer service is the "sum of acts and
elements that allow consumers to receive what they need or desire from your retail
establishment."
[edit] Retail Sales
The Retail Sales report is published every month. It's a measure of the consumer spending,
an important indicator of the US GDP. Retail firms provide data on dollar value of their retail
sales and inventories. 12000 firms in the final survey and 5000 in the advanced one. The
advanced estimated data is based on a sub sample from the US CB complete retail & food
services sample.

Retailing in India

Retailing is one of the pillars of the economy in India and accounts for 35% of GDP.
The retail industry is divided into organised and unorganised sectors. Over 12 million outlets
operate in the country and only 4% of them being larger than 500 sq ft (46 m2) in size.
Organised retailing refers to trading activities undertaken by licensed retailers, that is, those
who are registered for sales tax, income tax, etc. These include the corporate-backed
hypermarkets and retail chains, and also the privately owned large retail businesses.
Unorganised retailing, on the other hand, refers to the traditional formats of low-cost
retailing, for example, the local kirana shops, owner manned general stores, paan/beedi
shops, convenience stores, hand cart and pavement vendors, etc.[2] In India, a shopkeeper of
such kind of shops is usually known as a dukandar.
Most Indian shopping takes place in open markets and millions of independent grocery shops
called kirana. Organized retail such supermarkets accounts for just 4% of the market as of
2008.[3] Regulations prevent most foreign investment in retailing. Moreover, over thirty
regulations such as "signboard licences" and "anti-hoarding measures" may have to be
complied before a store can open doors. There are taxes for moving goods to states, from
states, and even within states.[3]

Contents
[hide]
• 1 Growth
• 2 The Indian Retail
Market
 • 3 Major Indian Retailers
• 4 Entry of MNCs
• 5 Challenges
• 6 References

[edit] Growth
An increasing number of people in India are turning to the services sector for employment
due to the relative low compensation offered by the traditional agriculture and manufacturing
sectors. The organized retail market is growing at 35 percent annually while growth of
unorganized retail sector is pegged at 6 percent.[4]
The Retail Business in India is currently at the point of inflection. Rapid change with
investments to the tune of US $ 25 billion is being planned by several Indian and
multinational companies in the next 5 years. It is a huge industry in terms of size and
according to management consulting firm Technopak Advisors Pvt. Ltd., it is valued at about
US $ 350 billion. Organised retail is expected to garner about 16-18 percent of the total retail
market (US $ 65-75 billion) in the next 5 years.
India has topped the A.T. Kearney’s annual Global Retail Development Index (GRDI) for the
third consecutive year, maintaining its position as the most attractive market for retail
investment. The Indian economy has registered a growth of 8% for 2007. The predictions for
2008 is 7.9%.[5] The enormous growth of the retail industry has created a huge demand for
real estate. Property developers are creating retail real estate at an aggressive pace and by
2010, 300 malls are estimated to be operational in the country.[6]
With over 1,000 hypermarkets and 3,000 supermarkets projected to come up by 2011, India
will need additional retail space of 700,000,000 sq ft (65,000,000 m2) as compared to today.
Current projections on construction point to a supply of just 200,000,000 sq ft (19,000,000
m2), leaving a gap of 500,000,000 sq ft (46,000,000 m2) that needs to be filled, at a cost of
US$15–18 billion.[7]
According to the Icrier report, the retail business in India is estimated to grow at 13% from
$322 billion in 2006-07 to $590 billion in 2011-12. The unorganized retail sector is expected
to grow at about 10% per annum with sales expected to rise from $ 309 billion in 2006-07 to
$ 496 billion in 2011-12.[8]
[edit] The Indian Retail Market
Indian market has high complexities in terms of a wide geographic spread and distinct
consumer preferences varying by each region necessitating a need for localization even
within the geographic zones. India has highest number of outlets per person (7 per thousand)
Indian retail space per capita at 2 sq ft (0.19 m2)/ person is lowest in the world Indian retail
density of 6 percent is highest in the world.[9] 1.8 million households in India have an annual
income of over 45 lakh[10].
Delving further into consumer buying habits, purchase decisions can be separated into two
categories: status-oriented and indulgence-oriented. CTVs/LCDs, refrigerators, washing
machines, dishwashers, microwave ovens and DVD players fall in the status category.
Indulgence-oriented products include plasma TVs, state-of-the-art home theatre systems,
iPods, high-end digital cameras, camcorders, and gaming consoles. Consumers in the status
category buy because they need to maintain a position in their social group. Indulgence-
oriented buying happens with those who want to enjoy life better with products that meet
their requirements. When it comes to the festival shopping season, it is primarily the status-
oriented segment that contributes largely to the retailer’s cash register.[11]
While India presents a large market opportunity given the number and increasing purchasing
power of consumers, there are significant challenges as well given that over 90% of trade is
conducted through independent local stores. Challenges include: Geographically dispersed
population, small ticket sizes, complex distribution network, little use of IT systems,
limitations of mass media and existence of counterfeit goods.[12]
[edit] Major Indian Retailers
Indian apparel retailers are increasing their brand presence overseas, particularly in developed
markets. While most have identified a gap in countries in West Asia and Africa, some majors
are also looking at the US and Europe. Arvind Brands, Madura Garments, Spykar Lifestyle
and Royal Classic Polo are busy chalking out foreign expansion plans through the
distribution route and standalone stores as well. Another denim wear brand, Spykar, which is
now moving towards becoming a casualwear lifestyle brand, has launched its store in
Melbourne recently. It plans to open three stores in London by 2008-end.[13]
The low-intensity entry of the diversified Mahindra Group into retail is unique because it
plans to focus on lifestyle products. The Mahindra Group is the fourth large Indian business
group to enter the business of retail after Reliance Industries Ltd, the Aditya Birla Group, and
Bharti Enterprises Ltd. The other three groups are focusing either on perishables and
groceries, or a range of products, or both.
• Vivek Limited Retail Formats: Viveks, Jainsons, Viveks Service Centre,
Viveks Safe Deposit Lockers
• PGC Retail -T-Mart India[1], Switcher , Respect India , Grand India
Bazaar ,etc.,
• REI AGRO LTD Retail-Formats:6TEN Hyper & 6TEN Super
• RPG Retail-Formats: Music World, Books & Beyond, Spencer’s Hyper,
Spencer’s Super, Daily & Fresh
• Pantaloon Retail-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central,
Fashion Station, Brand Factory, Depot, aLL, E-Zone etc.
• The Tata Group-Formats: Westside, Star India Bazaar, Steeljunction,
Landmark, Titan Industries with World of Titans showrooms, Tanishq
outlets, Chroma.
• K Raheja Corp Group-Formats: Shoppers Stop, Crossword, Hyper City,
Inorbit Mall
• Lifestyle International-Lifestyle, Home Centre, Max, Fun City and
International Franchise brand stores.
• Pyramid Retail-Formats: Pyramid Megastore, TruMart
• Nilgiri’s-Formats: Nilgiris’ supermarket chain
• Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom
discount chain.
• Trinethra- Formats: Fabmall supermarket chain and Fabcity hypermarket
chain
• Vishal Retail Group-Formats: Vishal Mega Mart
• BPCL-Formats: In & Out
• Reliance Retail-Formats: Reliance Fresh
• Reliance ADAG Retail-Format: Reliance World
• German Metro Cash & Carry
 • Shoprite Holdings-Formats: Shoprite Hyper
• Paritala stores bazar: honey shine stores
• Aditya Birla Group - more Outlets
• Kapas- Cotton garment outlets

[edit] Entry of MNCs

The world's largest retailer by sales, Wal-Mart Stores Inc and Sunil Mittal's Bharti
Enterprises have entered into a joint venture agreement and they are planning to open 10 to
15 cash-and-carry facilities over seven years. The first of the stores, which will sell groceries,
consumer appliances and fruits and vegetables to retailers and small businesses, is slated to
open in north India by the end of 2008.[14]
Carrefour, the world’s second largest retailer by sales, is planning to setup two business
entities in the country one for its cash-and-carry business and the other a master franchisee
which will lend its banner, technical services and know how to an Indian company for direct-
to-consumer retail.[15]
The world’s fifth largest retailer by sales, Costco Wholesale Corp (Costco) known for its
warehouse club model is also interested in coming to India and waiting for the right
opportunity.[16]
Opposition to the retailers' plans have argued that livelihoods of small scale and rural vendors
would be threatened. However, studies have found that only a limited number of small
vendors will be affected and that the benefits of market expansion far outweigh the impact of
the new stores.[17]
Tesco Plc., plans to set up shop in India with a wholesale cash-and-carry business and will
help Indian conglomerate Tata group to grow its hypermarket business.(19)
[edit] Challenges
To become a truly flourishing industry, retailing needs to cross the following hurdles:[18]
• Automatic approval is not allowed for foreign investment in retail.
• Regulations restricting real estate purchases, and cumbersome local laws.
• Taxation, which favours small retail businesses.
• Absence of developed supply chain and integrated IT management.
• Lack of trained work force.
• Low skill level for retailing management.
• Lack of Retailing Courses and study options
• Intrinsic complexity of retailing – rapid price changes, constant threat of
product obsolescence and low margins.
To overcome some of the challenges faced by modern retail, the country is developing a
support infrastructure in form of specialised retail schools. One such skill development
initiative has been taken by TKWs Group. Its TKWs Retail School has already training over a
thousand students and retail professionals for different retail skills. TKWs Retail School is
also associated with government projects like enhancing retail experience of foreign tourists,
improving retail of handicraft and local produce, skill development of village youth.
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Go local, not global

 indiaretailing.com, Payal Kapoor

3 September 2010
As the competition heats up among shopping centres, what would differentiate one from the other? The answer lies in localisation of the
shopping centre in line with local tastes and preferences. This becomes all the more important, because today's consumer is an evolved
creature, who owes no loyalty to a shopping centre unless it meets her high expectations and offers a unique shopping experience.
In a poll question asked by IndiaRetailing — “Shopping centres are still not unique when it comes to retail offerings” – 68.22 per cent of
the respondents said “yes”, whereas only 8.41 per cent said “no”; the remaining (23.36 per cent) preferred to stay “neutral”.
Stressing that shopping centres need to reflect local needs, tastes and habits, Devangshu Dutta, chief executive, Third
Eyesight, says, “Shopping centres can get truly differentiated from one other only when they are seen as part of a city’s social
and commercial infrastructure.”
He firmly believes that most shopping centres that have come up in recent years have been planned from the point of view of
the land available and maximisation of capital gain or income, rather than being part of specific urban landscapes. “Thus, we
have 'characterless boxes' which target, by and large, the same premium national brands. With such an approach, uniqueness
cannot be expected,” Dutta emphasises.
Deepti Goel, head, leasing, Ambience Mall, however, does not agree with Dutta. She says, “Every shopping centre is unique and is
sensitive to the specific needs of consumers. The offerings of a shopping centre are unique to the extent of identification of the mall with a
certain subset of the consumer, despite the possibility of a certain overlap in some areas.”
She further says, “The mall is a social centre which offers more than just retail and, therefore, it is unfair to evaluate the uniqueness of a
shopping centre by the possibility of an overlap of retail offerings.”
Right mix and match
So, what's the way ahead for shopping centres?
The right design, along with the right tenant mix that matches the customer’s experience, is the best ingredient for the success of a
shopping centre.
To create a great experience for the customers, shopping centres must understand not only the demographics of the mall catchment area,
but also the consumer's psychographic profile (their lifestyle, brands they relate to, their rational and emotional drivers and usage habits,
etc).
But it appears mall rentals come in the way of shopping centres to address the local needs of consumers. “Shopping centre developers in
India are mostly concerned with optimising the weighted average of rentals, hence certain categories, which might be vital for enhancing
the (tenant) mix, might take a back seat in order to achieve higher rentals,” observes Dheeraj Dogra, director, mall mechanics, Beyond
Squarefeet Advisory Pvt Ltd.
Stressing the need to make shopping centres a place of social gatherings, Dogra says, “A lot of retail services, such as banks, post
offices, shoe repair and hobby shops, are mostly left out of the mix. Also left out are local, home-grown retailers who have strong
connections within the community. It seems a majority of shopping centres boast of the same mix and, hence, are not unique. If we look at
the nation's top five shopping centres, the depth of retail mix is what makes them stand out."
Dinaz Madhukar, vice-president, mall management, DLF Emporio, says, “Shopping centres can and should be unique in their retail
offerings. Each destination should strive for a personality and have a connect with its target audience. It is imperative that the brand
attributes come alive when one comes to the mall.”
Giving the example of DLF Emporio mall in Delhi, Madhukar says, “The mall has carved a niche for itself in the luxury retail space. The
luxury ambience in the mall is complemented by a multi-cuisine restaurant, which carries the flavour of design throughout. It is different
from a typical food court, unique in its offering and yet a part of the mall.”
New trends, new shopping experience
New generation malls are no longer about shopping; they are striving to become destinations by providing a wide range of entertainment
for all consumer groups.
With a huge number of new shopping centres entering the market and the existing players bolstering their position, localising the malls
has become a vital tool for developers and owners of malls to attract footfall and increase retail revenues.
Thorough groundwork during the planning stage, in terms of understanding consumer behaviour, likely footfalls, retail segments potential,
propensity to spend on various retail categories, profiling existing and upcoming shopping destinations within the catchment, therefore,
becomes significant, as it gives insights for mall positioning.
A fully integrated strategy must involve all areas of the shopping centre, from tenant mix to facilities management to overall marketing and
communications strategy. The key is to understand the market and position the “shopping centre” to appeal to the right tenants and
consumers.
Sanjay Prabhu, head-marketing and business development, City Mall Developers, concludes, “The offering of brands in shopping centres
is quite limited. Unless India opens up its doors and allows more brands to come in, the retail market will see stagnation soon.”
 Policy Blow On Cash & Carry

By Vishal Krishna

Businessworld, 24 May 2010

A change in rules may have put a pause on organised retail's expansion
Just as French retailer Carrefour prepares to launch wholesale cash-and-carry (C&C) operations - a key part of the supply chain - in
India, the government stunned the organised retail companies with a clarification on the rules that govern the C&C business. Now, any
retailer tying up with foreign C&C wholesale businesses can source only 25 per cent of the stock keeping units (SKUs) from such a
venture.
By implication, the C&C business will effectively have to supply 75 per cent of the SKUs to kirana stores. Analysts estimate that there
are more than 50 million of these small and medium businesses in India; 90 per cent of them are kirana or mom 'n' pop stores.
The announcement reiterates an election promise that the Congress party made, since organised retail business was perceived as a
threat to the kirana stores - apart from a host of middlemen - whose owners make up a vote bank too large to ignore. The
announcement also comes amid rumours that Carrefour could tie up with Kishore Biyani's Future Group to help build their retail outlet
Big Bazaar.
"This decision can affect those retailers whose front-end businesses are supported by the cash-and-carry business," says
Devangshu Dutta, chief executive officer of consultancy Third Eyesight in Delhi. Bharti Wal-mart has one cash-and-carry unit
that supports its front end 'Easy Day'. There are nine such stores in the Delhi and Punjab regions.
Even Trent's Star Bazaar, which has more than 50 stores across the country, will have to wait for its UK partner Tesco to begin C&C
operations by end of this year. The government's rationale is that letting C&C tie-ups with organised retail make sense only when
kirana stores collectively are part of India's retail growth story - estimated at $350 billion by global consulting firm Ernst & Young
(E&Y).
"The wholesale C&C business will effectively give kiranas a chance to modernise and organise their stores," says Pinaki Ranjan
Mishra, partner, consumer practice, at E&Y. Even then, India's retail business will be driven by the kirana stores supported by
distributors, agri-middlemen and traders.
"The policy will hurt those players who have cross holdings in both retail and C&C business," Mishra adds.
But will organised retail chains actually drive costs so low that they could wipe out the middleman through the C&C business? True,
supply chain efficiencies are dismal. Kiranas, on the other hand, have very low operational expenditures on fast-moving consumer
goods (FMCG) - they do not include power and labour. That allows them to drive costs way down and yet stay profitable. And with
food and produce, kirana stores can mark up transport costs and still deliver cheap goods to customers, something organised retail is
unable to do. Organised retail does not make profits from food; they mark down food products, but gain through impulse purchase of
FMCG items.
Although tying up with the C&Cs drops supply chain costs, the government still puts organised retail on the back foot. "By 2013 all the
top global retailers will be here. The success will depend entirely on changes in shopping habits," says B.S. Nagesh, vice-chairman at
Shoppers Stop and interim chief executive officer, HyperCity, in Mumbai.
But the current note on what a C&C business can actually do will make front-end retail merchandising teams go back to the drawing
board and realign business strategies. The C&C businesses, which include Germany's Metro, Bharti Wal-mart, Star Bazaar-Tesco,
Shoprite and Carrefour, have invested over Rs 2,500 crore in India so far. Changing the rules may not necessarily derail organised
retail's ambitions.
(From Businessworld.
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 Global tie-ups, private labels to be buzzwords in retail this year

By BSReporters / Mumbai / Kolkata

Business Standard , January 1, 2010

Tie-ups with international retailers and brands, emphasis on profitable growth and increased focus on private labels are set to be key
trends in the Indian retail sector in 2010, say retailers and consultants Business Standard spoke to.
Though foreign direct investment in single-brand retailing and cash-and-carry ventures are allowed along with franchising and
licensing pacts as of now, 2009 saw most of the foreign retailers focusing on manage the business in their home countries, where they
were seeing declining sales.
“In 2010, a lot of international retailers and brands are most likely to look at India as global markets have stabilised and the Indian
economy has proved to be better than most other countries. These factors give a lot of confidence for them to invest in India,” said
Arvind Singhal, chairman of Technopak Advisors, a business consultancy.
Wal-Mart has set up its first unit in the country and Tesco, the UK’s largest retailer, is providing back-end support to Tata’s
hypermarket Star Bazaar, Carrefour is said to be talking Kishore Biyani’s Future Group for a possible tie-up.
Industry sources said a number of international brands are also holding talks with Future Group, Reliance Retail and Spencer’s Retail
for tie-ups.
Devangshu Dutta, chief executive of business consultancy Third Eyesight, believes franchising and licensing agreements
could be a major avenue used by overseas brands to enter the country.
“Our research shows that 45 per cent of fashion and lifestyle brands, which have entered India in the recent past, have used
this route because it gives a quick entry and allows tie-ups with partners who have good real estate capabilities,” Dutta says.
A profitable growth
Though retailers such as Reliance Retail, Aditya Birla Retail and Spencer’s Retail closed hundreds of stores or shifted stores to
economical locations in 2008 and 2009 and took various steps to cut costs, they are likely to continue to focus on profits and boosting
margins in 2010.
Shoppers Stop’s top management took 15 per cent salary cuts, while 300 floor-level staff were not replaced. The company shrank its
office space 20 per cent and corporate office expenses by 40 per cent to cut losses.
Delhi-based Vishal Retail, which has been battling cash woes and mounting debt, relocated 25 stores in the financial year 2009 and 10
stores since April 2009. It is now planning to close 20 more and go only through the franchisee route.
“In 2010, our strategy is to increase margins, reduce costs and boost revenues. In 2009, we mostly focused on controlling costs,” says
Thomas Varghese, chief executive officer of Aditya Birla Retail, part of the Aditya Birla group. “We will watch the situation and open
stores,” Thomas adds.
“Retailers will not book properties at ridiculous rentals and look at private labels to boost margins. Growth with profitability is the main
mantra in 2010,” says Singhal.
Private labels to rise
Most retailers like Future Group, Spencer’s Retail and Aditya Birla Retail, among others, are stepping up their private label plans to
boost margins. The reason: Private labels in food and groceries carry margins of 25-35, while private labels in apparel and accessories
offer more than 40 per cent margins.
Future Brands, which manages the private labels of Future Group, is expecting a turnover of Rs 750 crore in 2010 (the group’s
flagship Pantaloon’s financial year ends on June 30), 14 per cent growth.
Private labels contribute 30 per cent of its sales in FMCG and 25 per cent in personal care products. The group is expanding its private
label portfolio further. It is planning to launch its own brands in lingerie and a toothpaste brand ‘Sach’, according to Future Group CEO
Kishore Biyani.
Aditya Birla Retail, which has more than 400 products in its private labels, plans to take its share of private labels in overall revenues
from 19 per cent to 25 per cent next year.
RPG’s Spencer’s Retail is also planning to double the contribution of private labels and fashion to its overall revenues in the next
couple of years.
Spencer’s plans to launch several new private labels across categories. Under its brand ‘Smart Choice’, the company will launch floor
cleaners, savories and chips, wines, air-freshners and cakes in the next two months. Under its ‘Livin Smart’ brand, the company has
launched categories like quilts, handloom towels, dining accessories and, under its ‘Gerat’ brand, Spencer’s recently launched a mixer
grinder and plans to launch a DVD player soon.

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