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International Journal of Management (IJM)

Volume 8, Issue 5, Sep–Oct 2017, pp. 67–80, Article ID: IJM_08_05_008

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EVOLUTION OF INDIAN MODERN RETAIL

G. Haritha

Research Scholor, Department of Management Studies

Sri Venkateswara University, Tirupati, India

Prof. B. Amarnath

Registrar, Rayalaseema University, Kurnool, India

Dr. M. Sudheer Kumar

Professor, Department of MBA, RGM Engineering College, Nandyal, India

ABSTRACT

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. In other words, it is a network of similarly branded stores with an

element of self-service.in this paper an attempt is made to study the evolution of

Indian retailing and factors contribution to development of Indian retailing, finally, it

focuses on different retail format exist in the market.

Key words: Organised Retailing, Retail Chains, Retail Format and Retailing.

Cite this Article: G. Haritha, Prof. B. Amarnath and Dr. M.Sudheer Kumar,

Evolution of Indian Modern Retail. International Journal of Management, 8 (5), 2017,

pp. 67–80. http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=8&IType=5

1. INTRODUCTION

Retailing is the largest private sector industry in the world economy with the global industry

size exceeding $6.6 trillion and a latest survey has projected India as the top destination for

retail investors. India is currently the twelfth largest consumer market in the world. A

McKinsey report, “The rise of Indian Consumer Market”, estimates that the Indian consumer

market is likely to grow four times by 2025. A good talent pool, unlimited opportunities, huge

markets and availability of quality raw materials at cheaper costs is expected to make India

overtake the world‟s best retail economies by 2042, according to industry players.

There are exciting times for Indian Retail. Markets in Asian giants like China are getting

saturated, the AT Kearney‟s 2007 Global Retail Development Index (GRDI), for the third

consecutive year placed India the top retail investment destination among the 30 emerging

markets across the world. Commercial real estate services company, CB Richard Ellis‟

findings state that India‟s retail market has moved up to the 39th most preferred retail

destination in the world in 2009, up from 44 last year. The recent growth spurt was achieved

G. Haritha, Prof. B. Amarnath and Dr. M. Sudheer Kumar


primarily through a surge in productivity and is sustainable. Similarly, the study undertaken

by ICRIER estimates that the total retail business in India will grow at 13 per cent annually

from US$ 322 billion in 2006-07 to US$ 590 billion in 2011-12.

The Indian retail industry is the fifth largest in the world. With continued economic

expansion and retail growth, India is set to become a US$ 450 billion retail market by 2015,

comparable in size to Italy (US$ 462 billion) and much larger than Brazil (US$ 258 billion)

today. The present value of the Indian retail market is estimated by the India Retail Report to

be around Rs. 12,00,000 crores ($270 billion) and the annual growth rate is 5.7 percent.

Furthermore, around 15 million retail outlets help India win the crown of having the highest

retail outlet density in the world.

Retail sector is the largest source of employment after agriculture, and has deep

penetration into rural India. It is also believed that 21 million people are employed in the retail

sector which is 7 per cent of the total national workforce whereas the global average is around

10-12 per cent. It is estimated that an additional eight million jobs will be generated through

direct and indirect employment related to the retail sector. Table 1 gives the picture of India‟s

retail trade as compared to the US and China.

Table 1 Retail Trade- India, Us and China

According to AT Kearney “Retail Study” the contribution of retail sector to Indian GDP

was 10 per cent, while the contribution of retail sector in USA, China and Brazil was 10 per

cent, 8 per cent and 6 per cent respectively, which was manifested below:

Table 2 Country Retail Sector‟s Share in GDP

COUNTRY RETAIL SHARE IN GDP (%)

India 10

USA 10

China 8

Brazil 6

The above table states clearly that retailing in India is superior than those of its

contenders. Retail sector is a sunrise industry in India and the prospect for growth is simply

huge. The India Retail Industry is gradually inching its way towards becoming the next boom

industry.

India has the highest number of retail outlets in the world at over 15 million retail outlets,

and the average size of one store is 50-100 square feet. It also has the highest number of

outlets (11,903) per million inhabitants. The per capita retail space in India is among the

lowest in the world, though the per capita retail store is the highest. Majority of these stores

are located in rural areas.

Evolution of Indian Modern Retail


2. EVOLUTION OF INDIAN MODERN RETAIL

Traditionally, retail sector comprised of small retailers (kirana stores), with their shops being

in the front and house at the back, where they would run their retail business to earn the

family‟s livelihood. The emergence of organized retail in India dates back to the pre-

independence era when the country‟s established business houses, mostly textile majors,

ventured into the retail arena through company-owned or franchisee outlets. As such the on-

going journey of organized retail in India can be broadly classified into four main phases

(Cushman & Wakefield, 2010) (Figure 1.1):

Initiation (Pre-1990s)

Conceptualization (1990-2005)

Expansion (2005-2010)

Consolidation (2010 onwards)

2.1. Retail Initiation

The initial evolution of modern retail in India primarily transpired through established textile

majors‟ forward integration in retail. The key players during this era include Bombay Dyeing,

the Raymond Group, the S Kumars Group and Bata to name a few. Central and State

Government departments and co-operative bodies such as the Public Distribution System,

Mother Dairy, Kendriya Bhandar, Super Bazaar, etc., played a key role as prominent retailers

in the Indian Market. These early years also saw the emergence of regional chains, like

Nilgiri‟s and Foodworld, primarily in the southern region and some of these chains later

established a nationwide presence. These remained the only organized retailers in the country

for quite a long period, till the post 1990 period saw a fresh wave of entrants in the retailing

business.

Figure 1 Evolution of India's Organized Retail

Source: Cushman & Wakefield



2.2. Retail Conceptualization

This phase saw the entry of pure-play retailers, and not the manufacturers, expanding pan-

India rather than operate regionally. It is interesting to note that most new retailers like

Pantaloons, Shoppers‟ Stop and Lifestyle, of this era focused mainly on apparel and other

related fashion categories. With the opening of Indian economy during this phase, first

generation international brands like Nike, Reebok, Adidas, Levi Strauss and McDonald‟s to

name a few, made the Indian entry.

2.3. Retail Expansion

As the name suggests, this is perhaps the most active phase in the Indian retail industry, in

terms of growth, entry of new players and development of new entrants. A growing middle

class, increasing disposable incomes as well as a large and young consumer market led to

rapid growth in the Indian retail industry. Having realized the vast potential of the relatively

untapped domestic market, large industrial conglomerates like Mahindra and Mahindra,

Reliance, Tata, Aditya Birla and Essar entered the Pan-India retail arena during this period.

Their success brought in global retailers such as Metro AG, Max Retail, Hypercity, etc. The

period saw the emergence of new formats like cash and carry, large format discounters, food

courts, multiplexes, children‟s play zones and gaming zones. On the real estate front, there

was frenetic activity with a large number of malls were proposed/developed across major

metros and upcoming tier-II cities. The size of the malls also went through rapid

transformation from an average size of 150,000-200,000 sq. ft. to 500,000-1,000,000 sq. ft.

The rapid growth soon attracted the luxury product segment in an environment of the

economic liberalization along with rising purchasing power parity (PPP) index of domestic

consumers. With the FDI policy 2005-2006 allowing single–brand foreign retailers to take up

to 51 per cent stake in joint venture with a local firm, the intervening years saw the entry of

several premium brands (Giogio Armani, Versace, Gucci, etc.) mostly through joint ventures.

2.4. Retail consolidation

Considering the challenges faced by the industry at present, retail chains are likely to focus on

consolidations to cut costs and survive in the market. In the present scenario, companies are

increasingly concentrating on strengthening existing operations while assessing growth

options through consolidation.

3. INDIAN UNORGANISED RETAIL MARKET

According to the National Accounts Statistics of India the „unorganised sector‟ includes units

whose activity is not regulated by any statute or legal provision and/or those, which do not

maintain regular accounts. Thus, unorganised retailing refers to the traditional formats of low-

cost retailing, for example, the local kirana shops, owner managed general stores, paan/beedi

shops, convenience stores, hand cart and pavement vendors, etc. Unorganised retailing is

characterized as unstructured and high degree of fragmentation with street markets constitutes

form peddlers, vegetable vendors, neighbourhood stores and consumer durable stores to

manufacturer owned retail outlets.

Unorganised retail sector covers all those forms of trade which sell an assortment of

products and services ranging from fruits and vegetables to shoe repair. These products and

services may be sold or offered out of a fixed or a mobile location and the number of people

employed could range between 10-20 people. Thus, the neighbourhood baniya, the paanwala,

the cobbler, the vegetable, fruit vendor, etc. would be termed as the unorganized sector.

Traditionally three factors have plagued the Indian retail industry:



Unorganized: India is known as nation of shopkeepers where vast majority of the retail stores

are small “father and son” outlets. Traditionally it is a family‟s livelihood, with their shop in

the front and house at the back, while they run the retail business.

Fragmented: India has some 15 million retail outlets; however, a disturbing point is that 96

per cent of them are smaller than 500 square feet in area. This means that India per capita

retailing space is about 2 square feet (compared to 16 square feet in the United States). India‟s

per capita retailing space is thus the lowest in the world.

Rural bias: Nearly two thirds of the stores are located in rural areas. Rural retail industry has

typically two forms: “Haats” and “Melas”. Haats are the weekly markets: serve groups of

1050 villages and sell day-to-day necessities. Melas are larger in size and more sophisticated

in terms of the goods sold (like TVs).

The unorganized retail sector is expected to grow at approximately 10 per cent per annum

with sales rising from US$ 309 billion in 2006-07 to US$ 496 billion in 2011-12. It is a low-

cost structure, mostly owner-operated, has negligible real estate and labor costs and little or

no taxes to pay. According to a survey by AT Kearney, an overwhelming proportion of the

Rs. 4,00,000 crore retail markets are UNORGANISED. Consumer familiarity that runs from

generation to generation is one big advantage for the traditional retailing sector.

4. INDIAN ORGANISED RETAIL MARKET

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. In other

words, it is a network of similarly branded stores with an element of self-service.

Organised retail in India today holds only a fraction of the market share potential in India.

In 2001, organized retail trade in India was worth Rs 11,228.7 billion. It has risen from ZERO

to 6 per cent in a very short period mainly on volumes and not a value-driven growth. The

organized retail sector is catching up very fast and by the year 2013, it is expected to grow at

a CAGR of 40 per cent.

Associated Chambers of Commerce and Industry (ASSOCHAM) reported that the

organized retail sector is recording phenomenal growth and will completely revolutionize

retailing over next 3-4 years. As per estimates made by ASSOCHAM, the organized retail in

urban market is expected to grow at the rate of 50 percent to reach a value of 30 percent of the

total retail market in India. It added that currently, the rural organized retail in India, which is

at nascent stage at present with hardly a value of 2 percent of total organized retail, is

expected to grow over 10 percent by 2013.

According to McKinsey & Company report titled „The Great Indian Bazaar: Organised

Retail Comes of Age in India‟, organised retail in India is expected to increase from 5 per cent

of the total market in 2008 to 14 - 18 per cent of the total retail market and reach US$ 450

billion by 2015 (figure 2).



Figure 2 Share of Organised Retail in Total Retail

Furthermore, according to a report titled „India Organised Retail Market 2010‟, published

by Knight Frank India in May 2010, around 55 million square feet (sq ft) of retail space will

be ready in Mumbai, national capital region (NCR), Bengaluru, Kolkata, Chennai, Hyderabad

and Pune. Besides, between 2010 and 2012, the organised retail real estate stock will grow

from the existing 41 million sq ft to 95 million sq ft.

The share of organised retail in developed countries is much higher than developing

countries like India. Among the BRIC countries only in India the share of organised retail is

low. The share of other BRIC countries is Brazil (36 per cent), Russia (33 per cent), and

China (20 per cent). In 2008, the share of organised retail in the US was around 85 per cent, in

Japan it was 66 per cent, and in the UK it was 80 per cent, while in developing countries like

China and Russia it was 20 per cent and 33 per cent respectively. It is seen that the organised

sector in India is still has a long way to go because the unorganised retail still continues to

dominate the retail market.

Figure 3 Organised Retail as a % of Total Retail Sales – 2008

Source: ICRIER Retail Report, 2008

Exhibit 3 shows that the growth in retail sector is assured and inevitable. In this sense, the

retail industry does indeed spread its benefit to all. India is perhaps the last „virgin‟ BRIC

(Brazil, Russia, India, China) market for organised retailers. The game here has just begun.



By 2015, around 65 million households will patronise organised retail, amounting to over 300

million shoppers, almost equivalent to the population of the US today.

Figure 4 Comparative Penetration of Organised Retail

The Organized Retail Penetration (ORP) is the highest in footwear with 22 per cent

followed by clothing with 12 per cent. Though food and grocery account for largest share of

retail spend by the consumer at about 76 per cent, only 1 per cent of this market is in the

organized sector (Exhibit 4). However, it has been estimated that this segment would multiply

five times taking the share of the organized market to 30 percent in the coming years.

Figure 5 Organised Retail Penetration Across Categories

The food and grocery constitute the highest retail volume and this share has shown a

tremendous growth over the years. According to NSSO 60th

round, 54 per cent of the rural and

42 per cent of urban expenditure was on food. The second largest share is commanded by the

apparels. Clothing and textile is the largest organised market and is dominated by retailers like

Pantaloon, Westside, Globus, Koutons. This owes to the increasing disposable incomes and

changing lifestyles.

Industry trends for retail sector indicate that organized retailing has major impact in

controlling inflation because large organized retailers are able to buy directly from producers

at most competitive prices. World Bank attributes the opening of the retail sector to FDI to be

beneficial for India in terms of price and availability of products as it would give a boost to

food products, textiles and garments, leather products, etc., to benefit from large-scale

procurement by international chains; in turn, creating jobs opportunities at various levels.



5. GROWTH FACTORS IN INDIAN ORGANISED RETAIL SECTOR

At present organised retail in India is at a blossoming stage buts it growth is at a scorching

pace. The key drivers that will sustain this growth can be categorized as:

Consumer or Demand-side drivers

Retailer or Supply-side drivers

5.1. Consumers or Demand-Side Drivers

Rising disposable income of Indian middle-class: The Indian middle-class can be

categorised into seekers and strivers, which is the consuming class and the prime target

segment for retailers in India. In 2005, these two categories together constituted around 6.4

per cent of total households in India but accounted for 20 per cent of the disposable income.

By 2015, the middle class is expected to constitute around 25 per cent of total households and

account for 44 per cent of the total disposable income, and by 2025, the respective figures are

likely to go up to 46 per cent and 58 per cent. The Indian middle-class population and their

growing disposable income levels will drive the future growth of organised retail in India.

Personal consumption as a percentage of GDP: Personal consumption as a percentage of

GDP India is second only to Vietnam in Asia and a close fourth globally. Robust growth of

Indian economy will result in increase in personal consumption as a percentage of GDP.

According to IMA, Asia, India had one of the highest personal consumption as a percentage

of GDP in Asia at around 55 per cent in 2007. This portends well for Indian retail as with per

capita income growing, this personal consumption would translate into higher retail sales.

Plastic money becoming a greater pie of credit: The higher penetration of credit cards in

India has also boosted the growth of the organised retail sector; in fact, the young

population‟s increasing fancy for plastic money has further fueled their purchasing power.

Even though the organised retail sector is at a nascent stage, it is growing at a rapid pace.

Moreover, the spurt in issuance of credit cards and loans by both Indian as well as foreign

banks has further boosted the segment‟s growth. According to the RBI, as on FY09, the total

number of outstanding credit and debit cards in India was 24.7 million and 137.4 million

respectively.

Figure 6 Credit Card Transactions Growth FY04-FY09

Internet drives awareness and online purchases: There has been a substantial increase in

the number of Indians who use the Internet and a concomitant increase in the number of

online purchases. Indians have started using the Internet not only for increasing awareness but

also to shop online, which has opened a whole new channel of retailing in the Indian retail

scenario. Online retailing offers consumers the convenience of ordering merchandise to their



doorstep. Recently, Future Group, which owns Pantaloon, has initiated a measure to capitalise

on the online opportunity through futurebazaar.com. A similar venture flipkart.com is also

proving the new channel to be highly viable, especially since it eliminates the biggest cost of

the physical store.

Population as a growth driver (increase in working population, spurt in urbanisation, rise in

MPCE level in urban areas):

Increase in working population: India is the second-largest country in the world in terms of

population, and is the largest consumer markets in the world owing to its favourable

demographics. In 2008 India‟s working population (in the 15-49 years age group) constituted

around 53 per cent of the population as compared with 48.6 per cent in the UK, 49 per cent in

the US, and 53 per cent in Russia. Further, the increase in the number of working women has

fueled the growth in sales of discretionary items. There has been a 20 per cent increase in the

number of working women in the last decade.

Figure 7 Indian Population Pyramid 2008-2020

Spurt in urbanisation: Historically cities and towns have been the driving force of overall

economic and social development. Currently over 335 million people of India reside in cities

and towns, which translates to around 30 per cent of the total population. The rapid growth in

urbanisation has facilitated organised retailing in India, and has caused the speedy migration

of population into major tier I and tier II cities, which have a significant share in the retail

sales of the country.

Figure 8 Percentage of Urban To Total Population



The urban population‟s contribution in India‟s GDP shot up from 29 per cent in 1951 to

60 per cent in 2001 and increased to 70 per cent in 2011, as migration to cities and towns

grows rapidly in anticipation of higher income opportunities provided by these epicenters.

Moreover, the continuous development in urban areas has invariably attracted substantial

inflows of capital both from domestic and foreign investments have led to the transition of

urban areas. As the Indian organised retail is mainly concentrated in the urban areas, its

growth (urban areas) is imperative for the organised retail in the country.

Rise in MPCE level in urban areas: The aggregate urban consumption in India has been

growing steadily over the past few years as the economy has been continuously flourishing

during this period, owing to a rise in urban population as well as a rapid per capita income

growth. In FY05, 56 per cent of the urban population was below the MPCE level of Rs 930,

while in FY07 the percentage of population under the MPCE level of Rs 930 decreased to

46.1 per cent.

The average MPCE for the urban population in FY07 was Rs 1,312 up from Rs 1,105 in

FY05, on the other hand, the average MPCE for rural population in FY07 was Rs 695 up from

Rs 579 in FY07.

The NSS report clearly suggested that the consumption pattern in urban areas differed

from the rural areas. While the food items constituted 52.2 per cent of the rural area‟s

consumption in FY07 and the non-food items accounted for the remaining share, in the urban

areas, the share of food items in consumption was 39.4 per cent and the non-food items

accounted for the rest.

Figure 9 Percentage of Urban Population Below Different Levels of MPCE During FY05-FY07

5.2. Retailer or Supply-Side Drivers

Increased investments in retail: Investments in the retail sector have improved since FDI

has been allowed in single-brand and cash-and-carry formats. According to the Technopak

estimates, investments in the organised retail will touch US$ 35 billion in the next five years

or so. Investments allow organised players in retail to expand at a very high rate. All key

retailers in India have expansion plans over the next 3-4 years; for instance, Pantaloon has an

ambitious expansion plan to take its retail space up to 30 million square feet by 2011.

Likewise, Vishal Retail is expected to take its total store count to 500 with an estimated retail

space of around 10 million square feet by 2011.

Tier-II and III cities to fuel future growth of modern retail: Initially the retail revolution

began in the big tier I cities in India; however, as tier I cities are relatively saturated now,



retailers, especially value retailers, are finding their way to smaller tier II and tier III cities as

well. The changing landscape of the Indian retail segment and the increasing competition has

also forced retailers to tap growth opportunities in tier II and III cities in India.

Availability of quality real estate: According to industry sources, mall space in India has

grown from a meagre 1.0 million square feet in 2002 to about 57.3 million square feet by the

end of 2008; tier I cities are expected to account for around 73 per cent of the mall space and

the rest is likely to be equally divided between tier II and tier III cities.

Shortened supply chain benefits consumers: A traditional supply chain in India comprises

5-6 levels from Wholesaler to Sub-Wholesaler to the Distributor to the local Mom and Pop

stores to the Consumers. Two major disadvantages of this supply chain are as follows:

Cost of the product increases at every stage of the Supply Chain resulting in increase in the

price of the products due to cascading effect.

Increase in shrinkage at every stage of the Supply Chain results in loss of goods for

consumption.

Figure 10 Traditional V/S Modern Supply Chain

6. FORMATS IN INDIAN ORGANISED RETAIL SECTOR

Formats new to the Indian marketplace have emerged rapidly over the past five years. The

impact of the alterations in the format of the retail sector changed the lifestyle of the Indian

consumers drastically. The evident increase in consumerist activity is colossal which has

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

modern retail formats are encouraging development of well-established and efficient supply

chains in each segment ensuring efficient movement of goods from farms to kitchens, which

will result in huge savings for the farmers as well as for the nation.



The Indian retail industry is categorised into different retail formats on the basis of the retail

operation. The formats are basically defined on the basis of the size of the outlet, the pricing

strategy followed, the type of merchandise sold, and also the location.

Shopping malls: the biggest form of retail in India, malls offer customers a mix of all types

of products and services including entertainment and food under a single roof. Malls are

located mainly in metro cities, in proximity to urban outskirts and 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 Ambience

Mall, Ansal Plaza, Shipra Mall etc.

Convenience stores: are located in residential areas with slightly higher prices goods due to

the convenience offered. The stores are basically small in size (500-3,000 square feet), which

allows quick shopping and fast checkouts. They stock a limited range of high-turnover

convenience products and are usually open for extended periods during the day, seven days a

week. Convenience stores offer easy purchase experience through easily accessible store

locations. Subhiksha and Reliance Fresh are some major players in this format.

E-trailers: are retailers providing online buying and selling of products and services. Etailing

is slowly making its presence felt in India.

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 focus of these stores is to offer merchandise at a price that is lower than the

market price, and to gain profit from volumes. These stores keep merchandise mainly on the

basis of its salability. Usually these are no-frill stores with simple surroundings and less

service. The product category can range from a variety of perishable/ nonperishable goods.

Big Bazaar and Subhiksha are some famous examples.

Vending: it is a relatively new entry, in the retail sector. Here beverages, snacks and other

small items can be bought via vending machine.

Specialty stores: are retail chains dealing in specific categories and provide deep assortment.

These stores usually „specialise‟ in one line/category of merchandise. As these stores are

concerned with only one type of merchandise, they are able to offer a wider range of products

at a lower price. 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.

Departmental stores: are general retail merchandisers offering quality products and services.

Departmental Stores are expected to take over the apparel business from exclusive brand

showrooms. These stores are typically lifestyle stores where most of the merchandise

constitutes apparels and products other than food and grocery. These stores offer high quality

service to consumers. These stores stock lesser merchandise than other formats since the

merchandise is stored in a presentable manner. 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!



Table 3 Share of Formats in Organised Retail Space in India

Hypermarts: big-box formats with an average size that ranges between 60,000-120,000

square feet, and they stock multiple lines of products such as food and grocery, general

merchandise, sports goods, and apparels. These are located in or near residential high streets.

Hypermarkets are mammoth outlets that are fewer in number but cater to a larger area (3-5

kilometre). HyperCITY, Big Bazaar, RPG Spencer‟s and Shoprite Hyper are some major

players in this format.

Supermarkets: The average size of supermarkets range from 10,000-30,000 square feet.

They are a smaller version of hypermarkets that holds multiple lines of merchandise but is

limited in number when compared with supermarkets. Supermarkets are spread across the

city, are greater in number, but cater to a smaller area (1-2 kilometer). Foodworld, Food

Bazaar and Spinach are some major players in this format.

MBO’s (Multi Brand Outlets): offer several brands across a single product category. These

usually do well in busy market places and Metros. They are also known as category killers as

they focus on specific categories, such as electronics and sporting goods. Ezone, which

specializes in electronics, and Staples, which specialises in office stationery, are examples of

category killers.

Cash-and-carry outlets: cash-and-carry outlet is strictly not a retail format, but considering

the business dynamics it follows it can qualify for a retail format. In a retail business, usually

a consumer has to purchase one or more products but under this format, the consumers have

to buy a minimum volume of products or value specified by the cash-and-carry retailer. In this

format, the buyers are basically small retailers or catering service providers who purchase in

bulk quantities. This stores‟ size ranges from 1,00,000 square feet to 3,00,000 square feet. At

present, Metro is a major player that falls under this format. Wal-Mart‟s alliance with Bharti

and Tesco‟s with Trent will also come under the cash-and-carry format.

7. CONCLUSIONS

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 3.5 percent annually while growth of

unorganized retail sector is pegged at 6 percent. 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 Techno park Advisors

Pvt. Ltd., it is valued at about US $ 350 billion. Organized retail is expected to garner about

16-18 percent of the total retail market (US $ 65-75 billion) in the next 5 years



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