Success of Pantaloons Retail India Limited

“SUCCESS OF PANTALOONS RETAIL INDIA LIMITED

– INDIAN WAL-MART”

SUBMITTED TO:

SUBMITTED BY

JAGJOT SINGHENROLLMENT NO.

ABSTRACT

The thesis is focused on finding out the concept of value retailing followed by the

Pantaloons Retail India Limited in India and to do an empirical study and analysis on one

of its business lines “The Food Bazaar”. The aim was also to find out that how the

concept of private labeling has proved to be beneficial for the growth of the organization.

The research was conducted to find out the ways and methods that the company has been

following in the business of organized retailing including the hypermarket concept. The

research was conducted in NCR region (Noida & Gurgaon) with the sample size of

around 300 customers and primary information was collected from them in the form of

questionnaire. Also the financial statements of past four years were analyzed to find out

the financial performance of the company. After doing the brief analysis about each of

the verticals of the Pantaloons Retail India Limited, an in-depth research was conducted

on its food bazaar business line in order to find out that from where the modern consumer

prefers to shop from and what ratio of his income is he willing to spend on various food

items. The objective was to figure out that what are the various parameters that a shopper

takes into account before he buys a particular item and how comfortable is he when he is

buying from malls rather than the from the local kirana shops. The study was also done

on consumer’s perception on the concept of “brand + bargain” and the analysis about the

same has been mentioned at the end.

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Thesis Synopsis

1) Title of the proposed thesis: success of Pantaloons retail India limited-the

Indian wal-mart.

2) Objective of the thesis:

To understand the concept of value retailing followed by pantaloons retail

India limited in India.

To understand the concept of lifestyle retailing by the company.

To understand the management of the company, its expansion plans, growth

strategies, challenges and competitive strength and a complete analysis of its

business model.

To understand the concept of hypermarket and power of private labels by

the company.

To do the empirical study on food bazaars

3) Research design :

Research – Descriptive

Data source – Primary Data

Research Approach – Survey Method

Research Instrument – Questionnaire

Questionnaire type – Structured non-disguised

Type of questions – Both Close-ended & Open-ended

Sampling Unit – Individual

Sampling Frame – NCR

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Sampling Procedure – Simple Random sampling to select 5 stores and

convenience for select customer/shoppers.

Sample size – 300 customers approx

4) Scope of the thesis :the scope of the thesis is as follows:-

Complete information about Indian retail industry

The company background- pantaloon retail India

In-depth analysis about ‘Brand + Bargain shopping’

Empirical study on food bazaar o consumer perception research methodologies

Analysis

Suggestions and recommendations

conclusion

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ACKNOWLEDGEMENTS

I would like to extend my heartfelt gratitude to all those who have contributed towards the

successful completion of my thesis. Foremost among them is Mr. Bharat Khera for his

helpful and generously extended support and by sparing his valuable time to guide and

suggest us towards completion of this project.

I do owe a deep sense of gratitude to all the members of Pantaloons Retail India and

all those who stood with me and for their continuous support and co-operation during the

thesis. They too have contributed in no mean amount towards the success of my endeavors. I

also thank the Director and the faculty of my institute for giving me an opportunity to do the

thesis.

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Table of Contents

Page No.

AbstractSynopsis Acknowledgements

1. Indian Retail Industry 1 1.1 Some Key Facts 2

1.2 International retailers 21.3 Retail Omnibus 3

2. Company background 52.1 Major Milestones 62.2 Management of the Company 10

2.3 Expansion Plans 10 2.4 Challenges 103. Pantaloon Competitive Strengths 124. Pantaloon strategy 155. Characteristics of Select Retail Formats 166. Business Analysis of Pantaloon Model 197. Major verticals 23

7.1 Pantaloons 237.2 Big Bazaar 247.3 Food Bazaar 267.4 Fashion Station 27

8. Brand factory 288.1GINI & JONY FREE WORLD 298.2 BLUE SKY 29

9. Data Analysis 309.1 Big Bazaar Revenue Mix 309.2 Pantaloon Revenue Mix 30

9.3 Value Revenue Mix 31 9.4 Lifestyle Revenue Mix 31

9.5 Revenue Mix 329.6 Retail Space Mix 329.7 Performance of various formats on 31.12.2006 339.8 Pillars Going Forward For 2010 33

10. Bottlenecks and Challenges with Indian Retailers 34 11. Performance of Pantaloon Retail 36

11.1 Point of sale 3611.2 Sourcing of merchandise 3611.3 Selling of Merchandise 3611.4 Higher Inventory turns 36

12. Key risks 3713. The power of private labels by Pantaloons 39

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14. Detailed Financials 4114.1 Income Statement 4114.2 Balance Sheet 42

15. TABLES 4415.1 Table No.1 4415.2 Table No.2 4615.3Table No.3 46

16. Empirical Studies on Food Bazar 4816.1 Research methodology 48

17. Analysis 5017.1Choice of retail store for grocery shopping 5017.2 Expenditure on various food items 50

18. List of references 5119. Appendice 52

19.1Questionnaire 52

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SUCCESS OF PANTALOONS RETAIL INDIA LIMITED– INDIAN WAL-MART –

1. Indian Retail Industry: Strategies, Trends and

Opportunities 2007

Retail is India’s largest industry, accounting for over 10 per cent of the country’s GDP

and around eight per cent of the employment. Retail industry in India is at the crossroads.

It has emerged as one of the most dynamic and fast paced industries with several players

entering the market. But because of the heavy initial investments required, break even is

difficult to achieve and many of these players have not tasted success so far. However,

the future is promising; the market is growing, government policies are becoming more

favorable and emerging technologies are facilitating operations.

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 centers, multi-storeyed 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.

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1.1 Some Key Facts

- Retail is India’s largest industry, accounting for over 10 per cent of the country’s

GDP and around eight per cent of the employment.

- The market size of Indian retail industry is about US $312 billion

- Organized retailing comprises only 4.5 per cent of the total retailing market and is

estimated at around US$ 8.7 billion

- The organized retail sector is expected to grow to US $ 70 billion by 2010

1.2 International retailers

India's vast middle class with its expanding purchasing power and its almost untapped

retail industry are key attractions for global retail giants wanting to enter newer markets.

The Australian government's National Food Industry Strategy and Astride

initiated a test marketing food retail in India wherein 12 major Australian food

producers have tied up with India-based distributor AB Mauri to sell their

products directly at retail outlets.

US-based home delivery and logistics company, Specialized Transportation Inc,

will enter the Indian market through a strategic alliance with Patel Retail, a

subsidiary of Patel Integrated Logistics.

Wal-Mart has announced its plans for India in partnership with Bharti,

US coffee chain Starbucks’ is well on its way to set up its first store in India this

year.

US based Tommy Hilfiger has tied up with Creative Portico, a Mumbai based

home textiles company, to sell its home textiles and furnishings in India.

Alfred Dunhill, a UK-based luxury men’s brand, has tied up with Brand house

Retail Ltd. for its India venture and will be opening four stores in the country.

The world’s largest furniture retailer, Ikea, has established an office in Gurgaon

for market research and is holding talks with domestic companies to open stores

in India.

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Some of the international players that have already entered India include McDonald's,

Pizza Hut, Dominos, Levis, Lee, Nike, Adidas, TGIF, Benetton, Swarovski, Sony, Sharp,

Kodak, and Medicine Shoppe among others.

1.3 Retail Omnibus: Four Reports on the Retail Scene in India

The Omnibus edition of Pantaloon retail papers spans this very happening sector, which

not only brings so much joy to the inveterate shoppers in terms of retail therapy, but also

employment and livelihood to tens of thousands of Indians.

India’s GDP growth rate is a healthy 9% for 2005-06 – and this has had its ripple effect

on all industries – more so the Retail sector, of which only 3% organized until now.

The Indian retail industry accounts for 10% of GDP and 8% of employment.

India is being touted as the next big retail destination with an average three year

compounded annual growth rate of 46.64%.

The Indian economy is poised to take the third position in the world in terms of

Purchasing Power Parity by the year 2010.

The Indian Retail Market is a Rs. 1,200,000 million market as per the Images

India Retail Report 2007.

Organized Retail market is zooming ahead with an annual growth rate of 30%.

The Retail sector is vibrant with growth happening in all related areas – be they malls,

hypermarkets or single brand luxury stores, they have dotted the commercial landscape of

the metros, and have even percolated to the Tier II and Tier III cities.

Malls are fast becoming sought-after entertainment hotspots. From a situation where

there were no malls about a decade ago, the country will have over 300 malls translating

to over 100 million sq.ft. in available mall space by the end of 2007.

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Food and Grocery retail holds the most potential, as almost 99% of it is unorganized. A

number of big players are entering the field of organized food retail like Reliance, Aditya

Birla Group and the Bharti Group, which has tied up with the world’s largest retailer –

Wal-Mart. All these major players are expected to show an annual growth rate of 25 –

30%.

The Retail boom has also led to the opening of a large number of single brand outlets

across the country. With big brands and bigger outlets across all segments, from Apparel

and Footwear, Watches, Books and Stationary to Jewelry and Consumer Durables, the

sweep is indeed broad.

The Retail Sector is definitely witnessing a growth phase and everyone wants to make

their presence felt in order to take their share of this huge pie. Take a gourmet trip – dig

in to sample the depth and breadth of this amazing sector.

Types of Retail verticals operating in India

Food and Beverage

Health and Beauty

Clothing and Footwear

Home Furniture and Household Goods

Consumer Durable Goods

Leisure and Personal Goods

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2. Company Background – Pantaloon Retail India

Founded in 1987, by Mr. Kishore Biyani, Pantaloon Retail in India’s leading Retail

Company. It is the flagship company of the future group. Starting its 1st outlet in 1997,

Pantaloons in Kolkata, it currently has over 4 mm sq. ft. of area under business. The

company operates under multiple formats – hypermarket, apparel stores, specialty stores

under various brands including Big Bazaar, Pantaloon, Food Bazaar, Collection, E Zone,

etc. The company also operates an online portal, futurebazaar.com.

Pantaloon Retail (India) Limited is today recognized as one of the pioneers in the

business of organized retailing in the country with a turnover of over Rs.2,884.43

millions for fiscal 2006, as opposed to a turnover of Rs.1,463.12 million for fiscal 2005

and Rs.881.04 million for fiscal 2004. During the same period Pantaloon profit after tax

was Rs.124.75 million, Rs.30.20 million and Rs.3.82 million, respectively. As a result,

Pantaloon sales increased between fiscal 2004 and fiscal 2006 at a CAGR of 80.94% and

Pantaloon profit after tax increased between fiscal 2004 and fiscal 2006 at a CAGR of

471.44%.

Pantaloon Retail is one of the leading retail houses in India. As of November 15, 2006,

Group/Company operated 46 retail stores, including three stores which are operated by

Pantaloon franchises. These 46 stores are spread over about 1,113,000 square feet and are

located in 17 states across India. In efforts to strengthen Pantaloon supply chain,

Group/Company has set up seven regional distribution centers and an apparel

manufacturing plant.

The company is headquartered in Mumbai with zonal offices at Kolkata, Bangalore, and

Gurgaon (Delhi). It has 4 kinds of stores; Pantaloon stores, Central Malls, ALL Stores,

Fashion Stations and Mela Store. In the Value segment, Group/Company cater to the

masses through Pantaloon Big Bazaar, Food Bazaar outlets and Gold Bazaar Stores with

over 6.5 lakh sq. ft. retail space across Kolkata, Mumbai, Thane, Pune, Hyderabad,

Bangalore, Nagpur, Ahmedabad, Kanpur, Chennai and Gurgaon (Delhi).

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Subsequently, with evolution of retail industry in India and change in consumer

aspirations, Group/Company diversified Pantaloon portfolio of offerings to include other

retail goods. Currently, Group/Company sell readymade apparels and a wide range of

household merchandise and other consumer goods such as footwear, toys, watches,

toiletries, grocery items, sports items, crockery, gift and novelties.

It began its retailing operations in India way back in 1987. Currently, it manufactures and

sells ready-made garments through its own retail outlets and two discounting stores.

Group follows the concept of value retail in India. In other words, Pantaloon business

approach is to sell quality goods at reasonable prices by either manufacturing ourselves

or directly procuring from manufacturers (primarily from small and medium size vendors

and manufacturer). Group/Company endeavor to facilitate one-stop-shop convenience for

Pantaloon customers and to cater to the needs of the entire family. Group/Company

believes this concept as helped us grow to Pantaloon current size within a short time

frame of four years.

2.1 Major Milestones

1987: Company incorporated as Manz Wear Private Limited. Launch of Pantaloons

trouser, India’s first formal trouser brand.

1991: Launch of BARE, the Indian jeans brand.

1992: Initial public offer (IPO) was made in the month of May.

1994: The Pantaloon Shoppe – exclusive menswear store in franchisee format launched

across the nation. The company starts the distribution of branded garments through multi-

brand retail outlets across the nation.

1995: John Miller – Formal shirt brand launched.

1997: Pantaloons – India’s family store launched in Kolkata.

2001: Big Bazaar, ‘Is se sasta aur accha kahi nahin’ - India’s first hypermarket chain

launched.

2002: Food Bazaar, the supermarket chain is launched.

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2004: Central – ‘Shop, Eat, Celebrate In The Heart Of Our City’ - India’s first seamless

mall is launched in Bangalore.

2005: Fashion Station - the popular fashion chain is launched

ALL – ‘a little larger’ - exclusive stores for plus-size individuals is launched

2006: Future Capital Holdings, the company’s financial arm launches real estate funds

Kshitij and Horizon and private equity fund Indivision. Plans forays into insurance and

consumer credit.

In order to reduce costs and take advantage of economies of scale Company have

embarked on backward integration of Pantaloon products.

The company plans to diversify into the business of discounting in a big way, which is

targeted at the growing middle class segment. It has India’s second largest retail chain

with 46 retail outlets and two discounting stores branded as Big Bazaars across the

country at an estimated retail space of 4,01,300 sq. ft. The company plans to double its

retail space in the next couple of years.

Pantaloon has come up with an excellent revenue model, focusing on ‘value for money’

segment. Pantaloon plans to target the upper middle and the middle class segment, which

forms the large chunk of Indian population. This segment is very price conscious and

always looks out for value for money. Pantaloon has already opened two discount stores

at Hyderabad and Calcutta. It also plans to sell household items through its discount

stores along with apparels. Since the company has got strong brands like John Miller and

Pantaloon, coupling it with the discount store model would boost the sales to the larger

population.

Pantaloon successfully launched its discount store chain (branded as Big Bazaar), which

targets the large and growing upper-middle and middle class of Indian society. This is

totally in contrast to the other organized retail players, which focus on high net-worth of

individuals. Pantaloon has the second largest selling space amongst the retailers. Big

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Bazaar offers products and services such as a chemist, a photography shop, a bakery,

financial products, automobile accessories, bicycles, and electrical hardware among other

items – the range is vast and fulfils practically every need of the consumer under one

roof. This is backed by complete automation of the retail outlets. After completion of the

central hub at Mumbai the company’s operations would be fully integrated which would

give its operating efficiency a boost?

Big Bazaar has strong own brand names in its portfolio across product categories. The

brands include Pantaloon, John Miller, and Bare. Higher percentage of ‘own brand’ sales

improves margins, thus reducing the break-even level of sales. Big Bazaar has

diversified from apparels to household items in its discount stores. This has enabled

them to enlarge their basket of offerings.

Pantaloon Retail is one of India’s major retailers with presence in following two

segments:

Lifestyle Retailing – Pantaloons, Central, Fashion Station, aLL, MeLa

Value Retailing – Big Bazaar, Food Bazaar.

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Pantaloon Retail operations can be summarized in this following diagram

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Pantaloon Retail (India)

Ltd.

Lifestyle Retailing

Value Retailing

Entertainment, Leisure and sports

Pantaloons Central Fashion Station

aLL MeLa

Big Bazaar

Food Bazaar

2.2 Management of the Company

Pantaloon Retail over a period of time has built a strong management team to drive the

company for its high growth phase. Though, Mr. Kishore Biyani is the face of Pantaloon,

the company is not a one man show and has built a strong second and third line of

management, to fulfill its massive expansion and growth plans. Though there have been

concerns regarding lack of talent in the growing retail sector, the company has the best

talent in place to drive each business category.

2.3 Expansion Plans

The concept of discount store resembles the Wal-Mart strategy. In India and especially in

metro cities like Mumbai, Bangalore, Calcutta and Hyderabad, where the population is

dense and consists of a high middle-class population, the concept of discount stores is

graining a lot of acceptance. The company plans to expand rapidly. The next year it plans

to open more stores in Mumbai and Delhi at critical locations.

It has planned to open three Big Bazaars (discount stores) in ‘A-class cities’ like

Bangalore. Pantaloon has already bagged substantial retail space in Hyderabad (60,000

sq. ft.), Kolkata (35,000 sq. ft.) and Bangalore (40,000 sq. ft.). In Mumbai it acquired

50,000 sq. ft. area at each of its locations at Lower Parel, Mulund and the western

suburbs.

2.4 Challenges

The key challenges facing the company are as follows:

Fund raising – The Company acknowledges that expansion plans of the company

cannot be met from internal resources. This means that the company has to tap

external sources to fund expansion. The company has recently allotted shares to

promoters at SEBI formula price. It plans to borrow heavily to fund its expansion

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plans. As a consequence of increased interest payment and depreciation expense,

the net profit margins would remain flat.

Competition – Although there are a few stores operating in this segment such as

Giant in Hyderabad, it is mostly international chains such as Wal-Mart and

Carrefour that are the better known names as discount stores worldwide.

Meanwhile, the general retailers in Mumbai are not too pleased about the concept

of discount stores. “Group/Company can’t figure out from where such stores get

their margins. It must have a feasible revenue model to sustain the venture”.

The company is facing limited competition from the organized retailers but strong

competition exists from the downtown center’s unorganized.

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3. Pantaloon Competitive Strengths

It is believed that the following are Pantaloon principal competitive strengths which have

contributed to Pantaloon current position in the retail sector in India:

1. Strong understanding of the ‘value retail’ segment: Pantaloon business

plan involves implementation of the concept of the ‘value retailing’, targeting the

middle and lower middle income groups, which constitute majority of the

population in India. Group/Company intends to provide quality products at

competitive prices. Group/Company sells a vast range of merchandise across

apparels and accessories, FMCG products, food products and consumer durables

with over 63,000 SKUs. Pantaloon emphasis has been to maximize the value that

the customers derive in spending on goods bought in Pantaloon stores.

Group/Company endeavor to continuously reduce Pantaloon costs through a

variety of measures, such as, in-house production of apparels, procurement of

goods directly from the small and medium size vendors and manufacturers,

efficient logistics and distribution systems along with customized product mix at

Pantaloon stores depending on the regional customer behavior and preferences.

Central to Pantaloon value retail strategy is to pass on the benefits of cot reduction

measures to Pantaloon customers.

2. Strong and efficient supply chain management: Pantaloon supply chain

management involves planning, merchandizing sourcing, standardization, vendor

management, production, logistics, quality control, ‘pilferage’ control

replacement and replenishment. Pantaloon supply chain management provides us

flexibility to adapt to changing patterns in consumer behavior and Pantaloon

ability to add value at various steps/levels. In particular, Pantaloon supply chain

management gains strength from Pantaloon ability to undertake in-house

manufacture, design and development of apparels.

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3. Strong and efficient logistics and distribution network: Pantaloon

distribution and logistics network comprises seven distribution centers. Besides,

Group/Company have Pantaloon own fleet of 31 trucks, which helps us to

transport and deliver Pantaloon products in a cost and time efficient manner.

Group/Company believe that Pantaloon distribution and logistics set up is well

networked and allows us to fulfill the store requisition within short time period of

generation and receipt of order, which has helped us to optimize in-store

availability of merchandise and minimize transportation costs. Pantaloon strong

distribution and logistics network has enabled us to dispense with the requirement

of a dedicated storage space at every store, which is an industry practice, and

instead undertake periodical replenishment of depleted stock. Due to adoption of

an efficient racking system, Group/Company are able to benefit from optimum

utilization of the space allocated for display in Pantaloon stores. This provides us

assistance in maintaining a low working capital requirement and less carrying

cost.

4. Group/Company is in a position to leverage Pantaloon geographical

spread: Pantaloon stores and distribution centers are spread in various parts and

regions of the country. This has not only enabled us to build Pantaloon brand

value but also facilitated us to explore cost-effective sourcing from different

locations, identify potential markets and efficiently establish new stores in

different locations. An aggregate of 40 of 46 of Pantaloon existing stores are

located in Tier II and Tier III cities, which, Group/Company believe, enables us to

capture market share in locations where a majority of Pantaloon target customers

are located.

5. Group/Company possess the ability to identify new locations to promote

Pantaloon business plans: Group/Company believe that Group/Company

possess the ability to identify locations with potential for growth, in particular in

Tier II and Tier III cities. Group/Company have an exclusive site identification

and assessment team, which undertakes systematic analysis of the business

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prospects, taking into account factors such as population, literacy levels, nature of

occupation, income levels, accessibility, basic infrastructure and establishment

and running costs. Further Group/Company have a dedicated warehouse for the

purposes of storing the materials essential for setting up of new stores.

6. Group/Company derive substantial revenues from Pantaloon private

labels: Group/Company have a number of private labels for apparels (i.e. apparels

manufactured by us) such as Zeppin, Paranoia, Chlorine, Kittaan Studio,

Famenne, Fleurier Women and Roseau. In fiscal 2006, Pantaloon income from

Pantaloon private labels was Rs.483.50 million, which accounts for 16.76% of

Pantaloon total sales for fiscal 2006. Group/Company believe that Pantaloon

focus on Pantaloon private labels and their recognition in Pantaloon customer

segment enables us to differentiate ourselves from Pantaloon competitors.

7. Group/Company effectively use information technology systems:

Group/Company believe that efficient information technology systems, processes

and business applications are essential to handle retail chain of Pantaloon

magnitude. Pantaloon office processes are computerized which support

procurement, supply chain logistics, distribution centers management and store

operations including inventory management and billing. Group/Company is in

the process of implementing SAP. All Pantaloon stores and distribution centers

are connected through a company-wide virtual network connection which helps to

efficiently manage Pantaloon network of outlets throughout the country.

8. Group/Company have a highly experienced and competent management

team: Group/Company have an experienced management team which is

complemented by a committed workforce. Pantaloon management team

comprises of talented professionals who are highly experience in the retail sector.

This has assisted us in effective management of Pantaloon stores.

Group/Company believe Group/Company have created the right balance of

performance bonuses and other incentives for Pantaloon employees.

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4. Pantaloon strategy:

Group/Company intends to pursue the following strategies in order to consolidate

Pantaloon position as one of the leading operators in the ‘value retail’ segment in India.

Pantaloon growth strategy is based on:

1 Increasing Pantaloon penetration in the country by leveraging Pantaloon

supply chain, distribution and logistics network.

2 Emphasis on backward integration.

3 Expansion of FMCG.

4 Procurement from low-cost production centers outside India.

5 Increasing customer satisfaction and Pantaloon base of loyal customers.

6 Continue to upgrade information technology systems and processes.

7 Continue to train employees and seek entrepreneurship from employees.

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5. Characteristics of Select Retail Formats

Format Description Size (Sq. ft.)

(India)

Examples

Category

Specialist

Killer

Offer a narrow

variety with a

very deep

assortment of the

merchandise.

Merchandise may

be sold at price

lower than that.

50,000+ 15,000+ Circuit City, RUs,

Home Depot,

Nalli’s Kumaran

(Chennai),

Toykemp

(Bangalore), The

Loft (Mumbai,

Vijay Sales

(Mumbai)

Convenience Usually located

near residential

areas & open long

hours. Offers an

assorted mix of

products

including milk,

break and eggs.

3,00-8,000 500-1,000 7-Eleven, Speed

mart, In & Out

Department

Store

Large store

selling several

product lines,

with each

operating as a

department.

Product mix is

largely non-food,

like apparel,

75,000+ 500,1-000 Marks & Spencer,

Harrods,

Selfridges, Macy’s

Bloomingdale’s,

Shopper’s Stop,

Pantaloons,

Globus, Ebony

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accessories,

books, music,

footwear etc.

level of service is

very high.

Factory

Outlets

Stores which sell

branded

merchandise at

discount. Levels

of service are low,

typically, these

are franchise

outlets located

away from the

main markets.

5,000-10,000 5,000-1,000 Levi’s Factory

Outlet, Reebok

Factory Outlet,

Wrangler Factory

Outlet.

Hypermarket Large self service

stores selling a

mix of products,

these stores offer

large depth in the

product mix

which includes

Food non-food

items like apparel,

CD’s, DVD’s

footwear, etc.

The low price for

the products is a

key attraction for

the customer.

80,000-220,000 40,000-

75,000

Wal-Mart, Big

Bazaar, Giant,

Sabka Bazaar

Single Price Offer an assorted 5,000-20,000 500+ Family Dollar,

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Stores mix of branded

and unbranded

merchandise, to

appeal to the

budget conscious

customer.

Dollar General, 9

to 9, 49 to 999

Specialty

Stores

Focus on brand or

a particular

category. They

offer a narrow

product line but

good depth, level

of service is high.

5,000-8,000 2,000-5,000 Walgreen’s, Boots,

Crossword, Planet

M, Rhythm House,

Music world

Supermarket These stores offer

food, laundry and

household

maintenance

products. They

are self service,

low cost, low

margin and high

volume operators.

8,000-20,000 800-5,000 Asada, Kroger,

Tesco, Foodworld,

Food land, Food

Bazaar, Nilgiri’s.

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6. Business Analysis of Pantaloon Model

As Group know &, India is not an integrated homogenous market like other western

markets – it’s a hierarchy of markets catering to people at many different income levels 7

tastes. Hence it’s very important to understand the customer and its needs. Pantaloon has

been able to crack this by offering all what the consumers want at different price points.

Pantaloon has created a well niche brand for itself. The company through constant roll

out of different formats is trying to capture the maximum of consumer’s wallet. It has

been able to target 75% of the consumer wallet.

Business Strategy

Strategy to touch all price points to diversify business & improve profitability.

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Targeting the market segment & the product

Understanding the market requirements

Arranging the sourcing and the logistics

Final point of sale through different formats

Categories / Formats

Where the consumer spends Retail formats where the consumer

can spend.

Clothing, Tables & Fashion Big Bazaar – Central – Fashion

Station – Gini and Jony – Pantaloon –

All – Planet Retail

Jewelry, Watches & Accessories Blue Sky

Footwear Footwear Bazaar

Health & Beauty Care Services Health Village – Star and Sitara –

Tulsi

Health & Beauty Care Products Turmeric

Consumer Durables Electronic Bazaar – E-zone

Mobile Handsets M Bazaar – M port

Furniture & Fixtures Collection I – Furniture Bazaar – Got

it – Home Town

Food & Grocery Food Bazaar

Catering Service (F&B) Brew Bar – Café Bollywood –

Chamasa – Rain – Sports Bar.

Books, Music & Gifts Depot

Entertainment Bowling Co-FIZ3

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PANTALOON RETAIL – No of Stores & Retail Space

Targeting higher consumer wallet share

21

To add 27mn sq. ft. of retail space by 2011

7. MAJOR VERTICALS

7.1 Pantaloons

Pantaloons lifestyle format of retailing is the apparel store of the company catering to the

ever-changing fashion needs of the customers. Pantaloons cater to the Middle Income &

Upper Middle Income consumers. Pantaloon has been the pioneer & only apparel retailer

to offer several (7) fashion seasons of new & contemporary fashion. The company has

roped in Bollywood stars to promote its apparel offerings.

Pantaloon currently is the largest apparel retailer in India. The format is rapidly

expanding which itself would create entry barriers for competition. It’s been a high

margin business.

Competition in this format is expected to be limited because of the brand image that

Pantaloon has created in the minds of the consumer. Pantaloon has also adopted a private

label strategy, which allows it to differentiate in products & generate higher margins.

Private labels constitute 75% of the apparel sales.

23

42 stores by 2007 end & 80 by 2010 1.1mn sq. ft. by 2007 end & 2.0mn sq. ft by 2010 Average Sales per sq. ft. of Rs 7,500 can generate sales of Rs 1,500 crore by 2010

Expected Gross margin – 45%Expected EBIDTA – 14-16%

7.2 Big Bazaar

Shop till you drop! Big Bazaar has democratized shopping in India & is so much more

than a hypermarket. There are over 170,000 products under 1 roof that caters to every

need of a family, making Big Bazaar India’s favorite shopping destination.

Awards & Recognition

In the month of July 2006 – Big Bazaar won the prestigious ‘CNBC TV18 Awaaz

Consumers Award 2006’ in the retail category, as the most preferred, large, food &

grocery store.

At Images Retail Awards it was adjudges the Best Value Retail Store & Best Retail

Destination of year 2006

In Reader’s Digest Consumer Survey 2006, Bazaar won the prestigious Platinum Trusted

Brand Award in the Indian services category

Fashion Focus

Big Bazaar continues to be a fashion – led delivery format, with fashion comprising

about 40% of its revenues.

Big Bazaar Getting Bigger

New categories like consumer electronics, furniture, communication, food & beverages,

pharmacies, beauty retail, saloons, books, stationery & music are being added to Big

Bazaar.

24

Pioneering the Hypermarket Format

It’s the hypermarket format in the value retail segment of the company; its aim is to

capture the middle income value focused customer. Product offerings are mainly general

merchandise and apparels. Apparels form 40% of the total revenue, 60% being general

merchandise. The company has maintained 50% of apparel sales from private labels.

It is the fastest growing format in the organized retail space. Pantaloon has aggressive

plans for this format of taking to total number of outlets to 225 by 2010. Currently its

about 70 outlets.

Big Bazaar covers 3-25 mn sq. ft. currently, to increase to 9 mn sq. ft. by 2010. Average

sales per sq. ft. at Rs.8500 can generate a sales of Rs.7650 cr, by 2010. Expected Gross

Margin -24%. Expected EBIDTA – 7-9%.

This format would face maximum competition going forward as all the major new

entrants have plans to enter into the hypermarket segment.

The company’s aggressive roll out plan for this format is to be able to achieve economies

of scale in souring of products and protect the overall margins.

25

7.3 Food Bazaar

The food and grocery retail format of the company is capturing the middle – income

value focused customer. FMCG along with dry and wet staples from the main product

categories of this format. The format has been will accepted by the Indian women as it

has been able to offer scheme and discounts on various products because of its economies

of scale in operations. The company has been able to offer all the daily needs related to

the food and grocery under one roof. Pantaloon retail plans to expand this format (to

smaller towns and cities) more rapidly going forward to achieve further economies of

scale.

The success of this format has prompted the company to take this format to smaller towns

and cities. Though being a low margins business but higher turnover nature makes it a

profitable proposition for Pantaloon. In order to maintain its competitive advantage in

this format, the company needs to invest to improve the back end.

Central

The departmental format of the company, aims to cater the upper middle income

consumers. It’s been positioned as one stop destination for shopping and entertainment.

Central has the same growth rate of 40%. In the Central Model the company sub leases

its spaces to concessionaries, restaurant and food court managers which assure a fixed

rental and a certain percentage of sales, with no inventory carrying on its books, this

constitutes 70% of central sales.

Currently the company has 3 Central Stores (2006 end). Central model is highly scalable

and would be successful in other cities where the company plans to open.

26

110 stores by 2007 end, and 250 by 2010 1.2 mn sq. ft. by 2007 end, and 2.50 mn sq.ft. by 2010. Average sales per sq. ft. at Rs.14,000. Can generate a sales of Rs.3250 cr. By 2010. Expected gross margin – 15%.

FASHION STATION

27

15 stores by 2007 end & 80 by 2010

0.15 mm sq.ft. by 2007 end & 1 mn sq.ft. by 2010

Average sales per sq.ft. at Rs. 8000

Can generate a sales of Rs. 770 cr. By 2010

Expected gross margin – 41%

Expected EBIDTA – 12%

9 Stores by 2007 end and 22 by 2010.1.35 mn sq. ft. by 2007 end and 3.5 mn sq. ft. by 2010

Average sales per sq. ft. at Rs.7500Can generate a sales of Rs.2300 cr. by 2010

Expected Gross Margin – 28%.Expected EBIDTA – 12-15%

8. BRAND FACTORY

Pantaloon’s game plan with this new format is to raise the bar of customer expectations

& experience when it comes to ‘Brand + Bargain shopping’. There is a huge market

opportunity in this category where over 70% of the people shopping at Factory outlets are

under the age group of 30 years who want fashion brands at reasonable price.

Pantaloon retail is trying to fill in one gap in the apparels, offered through Pantaloons

(life style) & Big bazaar (value segment). The company plans to offer all the major

national & international brands.

Pantaloon retail is trying to change the perception of the consumers that factory outlet

shopping is not about seconds’ experience & it is not about buying cheap. Instead, it’s all

about an amazing experience of ‘Buying Smart’.

28

3 stores by 2007 & 20 by 2010

0.25 mn sq. ft. by 2007 & 1.0 mn sq. ft. by 2010

Average sales per sq. ft. at Rs. 13,000


Expected cross margin – 28%


GINI & JONY FREE WORLD

Today’s urban child is like a king in the family, as its importance is increasing &

influencing in all the purchasing decisions of the family. As the urban child is getting

more exposed to the western world through various media, the child today is becoming

smarter & also has started having aspirations. Pantaloon retail wants to capture the

growing aspirations amongst kids. Pantaloon is tapping this mega opportunity by having

a Joint venture with Gini & Jony, one of the leading kids apparel brand.

The size of the kids apparel market is estimated at Rs. 130 bn. The CAGR growth in the

branded apparel segment has been about 46% for the past 3 years.

8.2 BLUE SKY

30

83 stores by 2007 end & 180 by 2010

Average sales per sq.ft. at Rs. 6,700




50 Stores by 2007 end, & 125 by 2010

0.04 mn sq.ft. currently & 0.10 mn sq.ft. by 2010

Average sales per sq.ft. at Rs. 10,000

Can generage a sales of Rs. 100 cr. By 2010



9. DATA ANALYSIS

9.1 Big Bazaar Revenue Mix

9.2 Pantaloon Revenue Mix

31

9.3 Value Revenue Mix

9.4 Lifestyle Revenue Mix

32

9.5 Revenue Mix

9.6 Retail Space Mix

33

9.7 Performance of various formats on 31.12.2006

Formats No. of Outlets Space (mn sq. ft)

2004 2005 2006 2004 2005 2006

Value Retailing

Big Bazaar

Food Bazaar

Fashion Station

Total

Lifestyle

Pantaloons

Central

Total

10

15

0

25

12

1

13

19

30

1

50

12

3

15

29

45

5

79

21

3

24

0.41

0.11

0

0.52

0.29

0.13

0.42

0.83

0.29

0.03

1.148

0.29

0.47

0.76

1.15

0.43

0.09

1.67

0.48

0.47

0.95

9.8 Pillars Going Forward For 2010

Formats No. of Outlets Space (mn sq. ft)

2007 2010 2007 2010

Value

Big Bazaar

Food Bazaar

Fashion Station

Brand Factory

Total

Lifestyle

Pantaloons

Central

Home Town

E-Zone

75

110

15

3

203

42

9

5

20

76

225

250

80

20

575

80

22

35

86

223

3.3

1.2

0.15

0.25

4.9

1.1

1.35

0.6

0.2

3.25

9

2.5

1

1

13.5

2

3.5

2.7

0.86

9.06

34

Total

10. Bottlenecks and Challenges with Indian Retailers

Factors Description Implications

Structural

Impediments

Lack of urbanization

Poor transportation

infrastructure

Lack of awareness of

Indian consumers

Restricted retail growth

Growth of small, one-

store formats with

unmatchable cost

structure

High Cost of

Real Estate

Pro tenant rent laws

Non-availability of

government lands, zoning

restrictions

Lack of clear ownership

titles, high stamp duty

Difficult to find good

real estate in terms of

location & size

High land cost owing to

constrained supply

Disorganized nature of

transactions.

Supply Chain

Bottlenecks

Several segments like food

& apparel reserved for

SSIs

Distribution, logistics

constraints

Long intermediation chain

Limited product range

Makes scaling up

difficult

High cost & complexity

of sourcing & planning

Lack of value addition

& increase in costs by

almost 15%

Customer

Preferences

Local consumption habits

Need for variety

Cultural issues

Leads to product

proliferation

Increased complexity in

sourcing & planning

35

Increase the cost of store

management

Availability of

talent

Lack of proper training

Highly educated class does

not consider retailing a

profession of choice

Higher trail & error in

managing retail

operations

Increase in personnel

cost.

Barriers to FDI FDI not permitted in pure

retailing

Franchisee arrangement

allowed

Limited exposure to best

practices

36

11. Performance of Pantaloon Retail (India – A Brief note :)

11.1 Point of sale - Real estate is the raw material of a successful retailing business. Having the right real estate in prime locations is the key for a retail chain, availability of right real estate would drive the sales, a proper catchments analysis of locations of outlets is needed to increase the footballs & conversions.

Pantaloon in this regard is a way ahead because it has locked into real estate at prime

locations in all the major cities of India. The company is expected 30 million sq. feet of

prime locations in all the major cities of India. The company is expected 30 million sq.

feet of real space by 2011 covering 80 cities of India.

11.2 Sourcing of merchandise –

Sourcing of merchandise from the right vendor at the right price is an important factor, because efficiency in buying would ultimately increase te gross margins. Going with competition in major formats, it would be difficult to improve gross margins. But competition would not be amongst retailers alone but also amongst vendors to supply at the most competitive price. Any retailer with significant size will be able to improve its sourcing. Pantaloon with its projected scale is able to source its merchandise from its vendor at reasonable rates.

11.3 Selling of Merchandise – Selling the right products to the right consumer is an

important parameter of a retail chain. Pantaloon has been very successful in this

parameter by building different formats catering to different customer needs. Pantaloon

has created a bond with the Indian customer & clearly understand its needs & wants.

11.4 Higher Inventory turns – In any retail chain selling merchandise should move

quickly from the shelves. This could only be achieved by having lower inventory levels

& higher assets turns. Pantaloons inventory has been on a rise mainly because of the

store expansion & fashion constituting 40% of the total sales. Pantaloon assets turns are

not so impressive but going forward it would improve.

37

12. KEY RISKS

Execution of plans is the biggest risk

The company plans to become 10x its current size in terms of floor area by 2010. There

are a lot of exogenous factors that could impact the company’s plans. Delivery of stores

are behind schedule by an average of 2 quarters for most companies. As these store

deliveries get bunched up for most of the players towards 2009-2010. There could be

further delay in store delivery. Besides, there are multiple clearances to be taken by local

& other authorities, which can prove to be bottleneck.

Rising resource cost to put margin pressure

The employee cost & property costs will be 2 key pressure points for all retailers.

Traditional human resource management methods have been unable to reduce employee

turnover.

Likely equity dilution to finance growth

The company would need capital in the region of USD 600 mn. For its growth plan until

FYO9E. The company would need external funds for its growth. 9% dilution has

already happened Y TID FYO7E.

Strain on management bandwidth

PRIL is expanding into multiple formats & multiple geographics over the next few years.

Besides, it is investing in various non-retailing businesses. The company could face

management bandwidth shortage in a few years from now. Decision making is quite

decentralized with powers devolved to line managers. However, as the company

multiplies, they would need stranger MIS, internal auditing systems, & risk management

to ensure good management of such large entity.

Untested formats like Home solutions & new non-retailing business.

PRIL plans to grow in the home solutions business over the next few years. The market

for home improvement & furnishing is getting bigger due to the increasing number of

38

residential as well as commercial buildings, & the organized market is almost non

existent. The key reasons for the negligible presence of organized market are the lack of

skilled professional service providers, non existence of contract based layout force &

under investment. Significant amount of training & orientation would be required to

convert the existing labour into professional skilled force.

There are risks associated in entering into business like insurance because the way

financial products & services are bought in India, it will take a significant change in

mindset to start buying from groceries store.

39

13. The power of private labels by Pantaloons

When PepsiCo’s Frito-Lay decided of boycott Pantaloon’s Food Bazaar due to

differences in terms of trade, it was the latter’s private label which got a boost in shares.

Today Tasty Treat, the ready-to-eat private label of Food Bazaar, is leading with a 16 per

cent share among the rest of the snack brands.

Today Pantaloon Retail has 80 products comprising 350 SKUs with five private labels.

Since PepsiCo’s rejection, it has promptly approached local manufacturers such as

Prakash Snacks in Indore and Pogo Chips in Kolkata to manufacture its snacks brands.

Arvind Chaudhary, CEO (Foods Business), Pantaloon Retail, adds, “The purpose of

Pantaloon private labels is to grow the category and fill the gaps between demand and

supply. Today Group/Company have upgraded Pantaloon suppliers with better quality

systems and processes for the snacks category, where there was a gap.”

The power of private labels is being explored by most retailers today, as they do not want

to be at the mercy of the big manufacturers. At the same time they also realize that it’s

not going to be easy as it takes time and money to build private labels. Observes K.

Radhakrishnan, Chief Executive. Hypermarkets, Reliance Industries, “While it’s

Pantaloon strategic intent is to build private labels, it is more difficult and takes longer to

build these brands. However, in categories such as commodities, it is easier to build

private labels. At present, nearly 15 percent of Pantaloon hypermarket brands comprise

private labels.”

The private label product proposition: Quality and price, primarily, relative to branded

alternatives

How strong supplier brands are in the minds of Indian Consumers: Many supplier brands

are relatively new in India, so potentially have less awareness, and therefore, easier for

private label products to supplant supplier brand products

40

How effectively suppliers innovate: Supplier innovation if often what allows them to stay

ahead of retailer private label. Innovative suppliers can come out with new products that

retailers haven’t necessarily thought of.

How consolidated Indian retail eventually becomes: The more market share a retailer has,

the greater the opportunity to create the leverage a retailer can put on a supplier. This

may be one reason why the UK has greater PL penetration than the US – UK retail is

more consolidated than US retail. Right now, India retail is highly fragmented, so there’s

a long way to go, as KSA’s Maroo observes.

41

14. Detailed Financials

14.1 Income Statement

Particulars FY04 FY05 FY06 FY07 FY08E

Net sales 6,585 10,840 18,678 35,033 63,200

Operating expenses (6,021) (9,991) (17,258) (32,297) (58,373)

Raw material

consumed

(4,368) (6,988) (12,455) (23,367) (42,091)

Freight (116) (251) (383) (841) (1,580)

Power & fuel (121) (220) (374) (701) (1,264)

Employee expenses (345) (659) (1,327) (2,420) (4,079)

Selling & Distribution

expenses

(322) (499) (697) (1,612) (2,971)

Administrative

expenses

(129) (217) (375) (666) (1,580)

Bad debt provision /

w-offs

(1) (1) 0 (1) (1)

Royalty 0 (1) 0 0 0

Other operating

expenses

(620) (1,155) (1,667) (2,689) (4,806)

Operating profit 562 849 1,420 2,736 4,827

42

EBITDA 562 849 1,420 2,736 4,827

Depreciation (88) (133) (208) (327) (451)

Other income 18 50 43 0 0

EBIT 492 766 1,254 2,409 4,376

Interest paid (236) (282) (335) (751) (1,368)

Pre-tax profit (before

non-recurring items)

256 484 919 1,658 3,008

Pre-tax profit (after

non-recurring items)

256 484 919 1,658 3,008

Tax (current +

deferred)

(46) (145) (277) (580) (1,053)

Tax provided (15) (75) (128) (252) (421)

Deferred tax (31) (70) (149) (348) (632)

Net profit 211 338 643 1,078 1,955

Adjusted net profit 211 338 643 1,078 1,955

14.2 Balance Sheet

Particulars FY04 FY05 FY06 FY07E FY08E

Current assets 2,300 4,039 8,823 16,530 26,238

Cash & bank 138 215 217 245 181

Debtors 176 123 170 196 346

Inventory 1,576 2,759 5,070 9,984 16,748

Loans & advances 410 937 3,355 6,110 8,963

Other current assets 0 5 11 0 0

Non-current assets 1,801 2,614 8,360 7,422 9,018

Investments 33 319 1,406 1,906 2,406

Fixed assets (Net 1,748 2,295 3,954 5,516 6,612

43

block)

Gross block 1,847 2,511 3,660 6,410 7,910

Less: Depreciation (243) (374) (567) (894) (1,293)

Add: Capital WIP 144 158 861 0 0

Total assets 4,101 6,653 14,183 23,953 35,256

Current liabilities 729 1,455 2,622 3,900 6,126

Creditors 546 895 1,844 2,671 4,460

Tax payable 27 96 198 199 361

Dividends payable 29 35 67 70 70

Tax on dividend payable 4 8 9 10 10

Other current liabilities 113 375 454 950 1,225

Other provisions 10 25 51 0 0

Non-current liabilities 2,427 2,988 6,292 11,771 18,913

Total debt 2,366 2,857 6,013 11,144 17,634

Deferred tax liabilities 60 130 279 627 1,259

Total liabilities 3,156 4,436 8,914 15,671 25,038

Shareholders’ funds 945 2,212 5,269 8,282 10,217

Paid up Capital 191 220 269 281 281

Reserves and Surplus 758 1,995 5,000 8,001 9,936

Share Premium 366 1,251 3,721 5,691 5,691

Retained earnings 381 665 1,166 2,197 4,132

Other reserves 10 79 113 113 113

Less Misc expenditure (4) (3) 0 0 0

Total equity &

liabilities

4,101 6,653 14,183 23,653 35,256

44

15. TABLES

15.1 Table No.1 Different Format at Pantaloon Retail India

Product Category Concepts Status Format/Offerings

Food Brew Bar Operational Beers, snacks and set meals

Café Bollywood Planned Eateries

Chomosa Operational Snack counter in high traffic

area

Food Bazaar Operational Supermarket

Rain Operational Food and beverages

Sport Bar Operational Focused on sports lovers

Fashion aLL Operational Fashion apparel for plus-

size individual

Big Bazaar Operational Hypermarket

Blue Sky Operational Fashion accessories

Central Operational Seamless malls

Fashion Station Operational Popular fashion

Gini & Jony Operational Kids’ fashion

Pantaloons Operational Department store

Home & Electronics Collection i Operational Home furnishings

Electronics Bazaar Operational Present within Big Bazaar

e-zone Operational Consumer Electronics

Furniture Bazaar Operational Home furniture

Got it Planned One stop shop for home

maintenance

Home Town Planned One stop Destination

Telecom & IT Gen M Planned Hi-tech products

M Bazaar Planned Solutions for knowledge,

45

entertainment and

communication

M Port Planned Standalone stores/Shop-in-

shop

General

Merchandise

Big Bazaar Operational Hypermarket

Blue Sky Operational Fashion Accessories

Central Operational Seamless malls

Footwear Bazaar Planned Footwear and accessories

Navarasa Planned N.A.

Pantaloons Operational Department store

Shoe Factory Operational Footwear and accessories

Leisure &

Entertainment

Bowling Co. Operational Premium family

entertainment center

F 123 Operational For leisure and

entertainment

Wellness & Beauty Health Village Planned N.A.

Star Sitara Operational Beauty salon for men and

women

Tulsi Operational Pharmacy

Turmeric Planned ‘Cut-in’ format at Food

Bazaar

Books & Music Depot Operational Books and music

e-tailing Online retailing Operational Futurebazaar.com

Source: Complied by the author from the company website

46

15.2 Table No.2

Landmark Group’s Presence Across Different Formats of Retail in India

Baby-

shop

Shoe

mart

Splash Home

Center

Lifestyle Max Fashion

Brands

Funcity Total

Currently 9 9 9 10 9 2 7 52

Additions

Till Dec’

2006

4 4 4 4 4 9 11 2 42

Total till

Dec’ 06

13 13 13 14 13 11 18 2 97

Source : Company Website

15.3 Table No.3Presence of Departmental Stores in various cities in India

Location Westside Pantaloon Lifestyle Ebony Shopper’s

Stop

Globus Pyramid Total

Ahmedabad 1 2 1 1 5

Amritsar 1 1

Bangalore 3 1 1 2 2 9

Baroda 1 1 2

Chandigarh 1 1

Chennai 1 1 2 1 2 7

Delhi 3 3 1 1 1 1 10

Faridabad 1 1

Ghaziabad 1 1 2 4

Gurgaon 1 1 1 1 4

Hyderabad 1 1 1 1 4

Indore 1 1 1 3

Jaipur 1 1 2

47

Jalandar 1 1

Kanpur 1 1 2

Kolkata 2 2 2 6

Lucknow 1 1

Ludhiana 1 1

Mangalore 1 1

Mumbai 4 4 3 7 2 1 21

Nagpur 1 1 2

Noida 1 1 2

Rajkot 1 1

Pune 1 1 2 1 5

Thane 1 1

Secunderabad 1

Total 23 22 9 7 19 13 4 98

48

16. Empirical studies on Food Bazaar by Pantaloon Retail

India Limited on Consumer Perception

16.1 Research Methodology

• Research – Descriptive

• Data source – Primary Data

• Research Approach – Survey Method

• Research Instrument – Questionnaire

• Questionnaire type – Structured non-disguised

• Type of questions – Both Close-ended & Open-ended

• Sampling Unit – Individual

• Sampling Frame – NCR

• Sampling Procedure – Simple Random sampling to select 5 stores and

convenience for select customer/shoppers.

• Sample size – 300 customers

• Contact Method – Personal

• Mode of Collecting Data – The respondents were chosen randomly

and requested to grant interviews. The questions were then asked in

predetermined sequence.

49

• Data Processing – (i) A number of tables was prepared to bring out

the main characteristics of the collected data. (i) Inferences were

drawn from the collected data.

50

70

75

80

85

90

95

DailySupplies

MonthlyRation

NeighborhoodKiranaSuper Bazaar

17.1Choice of retail store for grocery shopping

17. Analysis

ANALYSIS

29%

18%

10%

8%

8%

8%

10%

9%Staples

Vegetables, Fruits & Fresh Juices

Edible oils, spices & pickles

Bread related & biscuits

Snacks

Beverages

Meat & eggs

Dairy Products

17.2 Expenditure on various food items

51

18. LIST OF REFRENCES

1. Milestones, an ORG-MARG publication.

2. Philip Kotler, ‘An Outlook for Retailing in India’

3. www.economictimes.indiatimes.com

4. www.retailyatra.com

5. Chain Store Age, “Food Focus Grows Format Exponentially

6. www.pantaloon.com

52

19. APPENDICIES

19.1 Questionnaire

1. Please rank the following parameters in the order of their importance (on a scale

of 1-6, 1-bing most important and 6-least important)

Parameter Ranking (1-6)

Personal Attention

Facility of home delivery

Facility of credit purchase

Ambience / Touch and feel

Long term discount/ free gift

Parking facility

2. Please tick the appropriate option based on your choice of retail store you buy

your groceries from…?

Neighborhood

Kirana/General

Store

Big Bazaar Other retail

Store/super

bazaar

Purchase

amount

(monthly)

a) Daily Supplies

b) Monthly Ration

3. Please tick the relevant option regarding milk purchase.

Loose milk

(delivered at home)

Packaged milk From dairy (freshly

milked)

Daily purchase

(quantity)

53

4. Please tick the appropriate option (choose only one option for place of

purchase)

Place of purchase Frequency of Purchase

Kirana

Store/sabzi

Mandi

Super

Market/Big

Bazaar

Daily Twice

a

week

Once

a

week

Once

in 2

week

Once

a

month

or

more

Rupees

spend

per

month

Food Items

a) Staple-

Rice, Pulses,

Sugar

b) Vegetable,

Fruit, & Fresh

juices

c) Edibles

oils, Spices &

Pickles

d) Bread

related &

biscuits

e) Snacks-

cornflakes

Chips Maggie

Kurkure etc

f) Beverages-

packed juices

& soft drinks

g) Meat &

eggs

54

h) Dairy

products-

butter, ghee,

chocolates

Personal Care

a) Cosmetics,

deodorant,

beauty soaps,

face wash,

shampoo &

oil

b) Toiletries-

tooth paste &

brush shaving

products

c) Sanitary

napkin, baby

product

HOME ESSENTIALS

a) Washing

Soap &

detergent

b) Mosquito

repellent,

broom, toilet

cleaner

5. In the previous question, the categories for which you have selected daily, twice a

week or once a week; select the specific item (tick the option, multiple options

allowed)

55

a) Staples-Rice

pulses, sugar

Rice Sugar Wheat/flour Pulses

b) Vegetables,

Fruits

Potato,

Tomato, onion

Seasonal

vegetables

Fresh juice Fruits

c) Edibles oils,

spices, pickles

Spices Mustard oil Sunflower oil

d) Bread related

& biscuits

Bread Bakery product

(bun, pizza

base)

Branded biscuits Unbranded

biscuits

e) Snacks-

cornflakes,

chips, Maggie

Kurkure etc.

Maggie Packed Snacks

(chips, kurkure)

Breakfast items

Beverages-

packed juices &

soft drinks

Packed juice Soft drinks Mineral water

Meat & eggs Eggs Chicken Mutton Fish

Dairy Products-

butter, ghee,

chocolates

Butter Ghee Chocolates

6. How satisfied are you with your preferred store on the following parameters

(please tick the appropriate option)

Factors Strongly

disagree

Disagree Neutral Agree Strongly

agree

a) Packed Milk is of better

quality than loose milk

56

b) Store of some big

company is expensive

c) Packed flour, pulses,

etc. have better quality

than the unbranded

product available at local

kirana store

d) Vegetables, Fruits

would be cheaper in sabzi

market as compared to an

air conditioned shop

e) Vegetables, Fruits are

fresher in sabzi market as

compared to an air

conditioned shop

f) Will not purchase from

a store, which sells fresh

meat.

g) I will prefer to purchase

vegetables from an air-

condition shop as compare

to sabzi market

h) I will purchase from a

new store which provides

cheaper goods even if I

don’t know the store

owner personally.

Personal Details:

57

Family size: 1 2 3 4 5 6 & above

Occupation (earning member)

i. Working Professional

ii. Self-employed

iii. Housewife

iv. Student

v. Senior Citizen

Monthly Expenditure:

i. Less than 5000

ii. 5000-10,000

iii. 10,000-15,000

iv. 15,000-20,000

v. 20,000 and above

Name:

………………………………………………………………………………………..

Address:

a) House no……………………………………………………………………..

b) Sector / sub area / Locality…………………………………………………..

c) Colony / Mohalla……………………………………………………………..

d) City…………………………………………………………………………..

Contact no. with STD code:

……………………………………………………………………………………….

58

Optional:

Name of family

member

Date of birth Marriage anniversary

Thank You

To be filled by the interviewer

Remarks:

………………………………………………………………………………………………

………………………………………………………………………………………………

………………………………………………………………………………………………

Name of the interviewer …………………………………………….Signature.

59

Success of Pantaloons Retail India Limited

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