the retail industry

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THE RETAIL INDUSTRY

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THE RETAIL INDUSTRY

• Retail comes from the French word retailer which refers to "cutting off, clip and

divide” in terms of tailoring (1365).

• It first was recorded as a noun with the meaning of a "sale in small quantities" in

1433 (French).

• Retailing consists of the sale of goods or merchandise from a fixed location, such

as a department store or kiosk, or by post, in small or individual lots for direct

consumption by the purchaser.

• Retailing may include subordinated services, such as delivery.

• Purchasers may be individuals or businesses.

INTRODUCTION TO THE INDUSTRY

ORGANISED UNORGANISED

Distorted real-estate Market Poor infrastructure Inefficient upstream processes Lack of modern technology Inadequate funding Absence of skilled manpower

Customers can buy goods in a similar purchase environment.Good Infrastructure.Efficient Supply Chain ProcessesUse of Advanced TechnologySkilled Manpower.

Comparative Penetration of Organised Retailfor International Economies

•Retailing is a “technology-intensive" industry.

•Successful organised retailers today work closely with their vendors.

•On an average a super market stocks up to 5000 SKU's (Stock keeping Units) against a few hundreds stocked with an average unorganised-retailer.

•Less Conversion level

•Customer Loyalty

•High Inventory and Stock Level

•Demand forecasting is not proper.

STRENGTH:- WEAKNESS:-

SWOT ANALYSIS OF RETAIL INDUSTRY:-

•HIGH POPULATION

•ORGANISED RETAIL IS ONLY 4%.

•Rural Retailing:-

-ITC’S “Chaupal Saga”.

- “Hariyali Bazar", started by DCM

- Sriram group.

•IF THE UNORGANISED RETAILERS ARE PUT TOGETHER, THEY ARE PARALLEL TO A LARGE SUPERMARKET WITH LITTLE OR NO OVER-HEADS, A HIGH DEGREE OF FLEXIBILITY IN MERCHANDISE, DISPLAY, PRICES AND TURNOVER.•SHOPPING CULTURE HAS NOT DEVELOPED IN INDIA AS YET. EVEN NOW MALLS ARE JUST A PLACE TO HANG AROUND, LARGELY CONFINED TO WINDOW-SHOPPING.

OPPORTUNITIES:- THREATS:-

SWOT ANALYSIS:-

The Global retail Industry is one of the largest industries worldwide, increasingly being controlled by a handful of powerful corporations based mainly in the U.S and Europe, namely, Wal-Mart, Tesco, Carrefour and Metro.

These MNCs retailers have by and large have saturated in their home countries and are looking for penetrating emerging markets of India, China and Russia as they are minimally penetrated by organised retail.

Populations in developing markets will remain relatively young and will increase share of retail spending.

GLOBAL SCENARIO

SOURCE:-FORTUNE GLOBAL 500 ON CNN MONEYFROM THE JULY 26, 2010 ISSUE

RANK COMPANY COUNTRY REVENUE(mn$) PROFITS(mn $)

1 WAL- MART USA 408,214 14,335

2 CARREFOUR FRANCE 121,452 454

3 METRO GERMANY 91,152 532

4 TESCO UK 90,234 3690

5 KROGER USA 76,733 70

SOURCE:- DATAMONITOR

Wal-Mart Stores Inc. (Wal-Mart or “the company”) was established in 1969.

•Wal-Mart offers a wide assortment of merchandise at every day low prices (EDLP).

•Wal-Mart operates three business segments:Wal-Mart US, the international segment, and Sam’s Club.

•The segment has retail operation in all the 50 states in the US.

•Wal-Mart operates 803 discount stores, each with an average store size of 108,000 square feet, in 47 states.

•The company also operates 2,747 supercenters (average size of 185,000 square feet) in 48 US states and 158 neighborhood markets (average sixe of 42,000 square feet) in 16 US states.

KEY FACTS:-

SOURCE:- DATAMONITOR

•Dry and wet grocery•Beverages•Frozen foods•Flowers•Health and beauty products•Household products•Pet supplies•Fabrics and crafts•Stationery and books•Automotive accessories•Hardware and paint•Horticulture products

MAJOR PRODUCTS AND SERVICES:-

• Sporting goods• Apparel• Shoes• Jewelry• Toys• Home furnishings• Housewares• Major and minor home appliances• Cameras• Cellular phones• Services:• Photo processing services

SOURCE:- DATAMONITOR

•The company recorded revenues of $408,214 million during the financial year ended January 2010 (FY2010), an increase of 0.9% over 2009.

• For FY2010, the US, the company's largest geographic market, accounted for 75.3% of the total revenues.

•Wal-Mart generates revenues through three business divisions:Wal-Mart US (63.8% of the total revenues during fiscal year 2010), international (24.7%) and Sam’s Club (11.5%).

REVENUE ANALYSIS:-

SOURCE:- DATAMONITOR

SWOT ANALYSIS:-

SOURCE:- DATAMONITOR

•Carrefour S.A. is a French international hypermarket chain.

•The first Carrefour store opened on June 3, 1957, in suburban Annecy near a crossroads (carrefour in French). The group was created by Marcel Fournier,Denis Defforey and Jacques Defforey and grew into a chain from this first sales outlet.

• Headquartered in Levallois-Perret France.

CARREFOUR:-

COMPANY ADDRESS:-

•The present CEO is Lars Ollofsonand Chairman is Amaury De Seze.

•The revenue of Carrefour in 2009 was $121,452mn and profit was $454mn.

•Carrefour is the largest hypermarket chain in the world in terms of size, the second largest retail group in the world in terms of revenues.

•Carrefour is the leading hypermarket retailer in the world. The group operates about 1,395 hypermarket stores across the world, of which 203 hypermarkets in France, 449 in European countries outside France, 309 in Latin America, and 339 in Asia.

KEY FACTS:-

•Food

•General merchandise

•Clothing

•Household electrical goods

•Audio visual equipments

•Music

•Books

MAJOR PRODUCTS AND SERVICES:-

Services:• Music download• Flower and bicycle

delivery• Dry cleaning• Photo development• Photocopying

SWOT ANALYSIS:-

•Metro AG is a diversified retail and wholesale and cash and carry group based in Dusseldorf, Germany.

•It is the 3rd largest retailer in the world according to Deloitte and Reuters.

•It was established in 1964 by Otto Beisheim.

METRO GROUP:-

COMPANY ADDRESS:-

•Eckhard Cordes is the present CEO and Chairman of the executive board.

•Franz Haniel is the Chariman of the supervisory board and Olaf Koch is the present CFO.

•It provides services like supermarket, hypermarket, consumer electronics and appliances retail , departmental stores etc.

•Its revenue in 2009 was $91,152mn and profit was $532mn.

KEY FACTS:-

SWOT ANALYSIS:-

•Tesco is a leading food and grocery retailer.

•The company operates 4,331 stores in 14 countries worldwide.

• It operates in the UK, other European countries, the US and Asia.

•Its revenue in 2009 was $ 90,234mn .

•Its headquarter is in Hertfordshire, the UK.

TESCO:-

COMPANY ADDRESS:-

•The company operates in a single segment: retail. However, Tesco's operations can be examined by the store formats that it operates: Express, Metro, Superstore, Extra and Homeplus.

•The company has over 960 Express stores offering fresh food at convenient locations. These stores sell a range of up to 7,000 products, including fresh produce, wines and spirits and bakery products.

• The company has over 170 stores in town and city centre locations. It offers a tailored range of food products, including ready-meals and sandwiches. Tesco operates about 450 superstores at which it offers food as well non-food products such as DVDs and books.

KEY FACTS:-

SWOT ANALYSIS:-

•The Kroger Co. is one of the leading grocery retail chains in the US

•It was founded in 1883 by Bernard Kroger.

•The company operates a chain of supermarkets and multi-department stores under a number of banners including Kroger, Ralphs, Fred Meyer, Food 4 Less, Fry's, King Soopers, Smith's, Dillons, QFC and City Market.

•In addition, Kroger operates 40 manufacturing plants in the US.

•The company is headquartered in Cincinnati, Ohio.

KROGER:-

COMPANY ADDRESS:-

•The company recorded revenues of $76,733 million during the financial year ended January 2010 (FY2010), an increase of 0.8% over 2009.

•The net profit was $70 million in FY2010.

•Its present CEO and Chairman is David Dillon.

KEY FACTS:-

SWOT ANALYSIS:-

The Indian Retail Sector

Retail industry in India is divide into two sectors:

• Unorganised retail : 94%

• Organised retail: 6%

SOME FACTS:

The Indian Retail Sector

Indian retail industry is $410 billion in july 2010. and currently it is growing at

13%.

Retail is expected to grow to $535 billion in 2013, with 10% coming from organised

retail.

Currently Oganised retail accouts for 5% of the total retail market.

Oranised retail is expected to grow at a CAGR of 25-30% over the next few years.

51% FDI (Foreign Direct investment ) is allowed in single brand retail and 100% in

wholesale retail.

Rural market is projected to dominate the retail industry landscape in India by 2012

with total market share of above 50 per cent .

INDUSTRY EVOLUTION

Traditionally retailing in India can be traced to:-

• The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the

consumers

•Era of government support for rural retail: Indigenous franchise model of store chains run

by Khadi & Village Industries Commission 1980s experienced slow change as India began

to open up economy.

•Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim

first saw the emergence of retail chains.

•Later Titan successfully created an organized retailing concept and established a series of

showrooms for its premium watches.

THE INDIAN RETAIL SECTOR

The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure

Retailers. For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music

World in music; Crossword and Fountainhead in books.

Post 1995 onwards saw an emergence of shopping centers,

– mainly in urban areas, with facilities like car parking

– targeted to provide a complete destination experience for all segments of society

Emergence of hyper and super markets trying to provide customer with 3 V’s – Value , Variety and

Volume Expanding target consumer segment: The Sachet revolution - example of reaching to the

bottom of the pyramid.

THE INDIAN RETAIL SECTOR

RETAILING FORMATS IN INDIA

RETAILING FORMATS IN INDIA

• AT Kearney has estimated India’s total retail market at US$ 202.6 billion which is

expected to grow at a compounded 30 per cent over the next five years.

• With the organised retail segment growing at the rate of 25-30 per cent per annum,

revenues from the sector are expected to triple from the current US$ 7.7 billion to US$ 24

billion by 2010.

• The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent

over the next decade.

• Over next two years India will see several Indian retail businesses attaining a critical mass

as growth in the industry picks up momentum driven by two key factors:

• – Availability of quality real estate and mall management practices

• – Consumer preference for shopping in new environments

FUTURE DIRECTION: POSITIVES

• Wal-Mart : huge plans for India. Moving a senior official from its headquarters in

Bentonville,Arkansas, to head its market research and business development functions

pertaining to its retail plans in India.

• New York-based high-end fashion retailer Saks Fifth Avenue has tied up with realty

major DLF Properties to set up shop in a mall in New Delhi.

• Tommy Hilfiger, retailer of apparels, expects to open one store each in Delhi,

Ahmedabad, Lucknow and Bangalore in the next four months.

FUTURE DIRECTION: POSITIVES

• 68 million square feet of mall space is expected to be available by end of 2007,

which might lead to over-capacity of malls

•Lack of differentiation among the malls that are coming up. One option may be to

look at specialization.

• Poor inventory turns and stock availability measures - retailers clearly need to

augment their operations.

• Operations of retailers and suppliers are not integrated. Efficient replenishment

practices practiced in the Indian auto and auto-component industry can be leveraged

to implement efficient supply chain management techniques.

FUTURE DIRECTION: CONCERNS

•Supplier maturity, in terms of adherence to delivery schedules and delivering the

quantity ordered, is an issue.

•Sales tax laws - lead to retailers having state-level procurement and storage leads to

Indian retailers having higher inventories. VAT has helped alleviate this a bit.

•Increased adoption of IT and shrinkage management will be a critical area.

•Supply chain and customer relations followed by merchandising, facilities

management and vendor development are areas which have significant gaps and

proactive training is a key imperative for overcoming these.

FUTURE DIRECTION: CONCERNS

Strengths

› Technology : successful organized retailer today work closely with their vendors to

predict consumer demand, shorten lead time reduce inventory holding and ultimately

save cost

Weakness

› 1. Less Conversion level

› 2. Customer Loyalty

SWOT ANALYSIS

Opportunities

› Rural Retailing : India huge rural population has caught the eye of retailer looking for new

areas of growth

› Percolating down: expected to enter into tiers-II cities

› Organized retail :expected to grow by 20-25% p.a

Threats

› Unorganized Retailers : they are parallel to large supermarket with high degree of flexibility

in merchandise, prices and turnover

› Shopping Culture

SWOT ANALYSIS

RETAILING-TWO CAREER PATHS

LEADING RETAILERS IN INDIA

Pantaloon Retail (India) Ltd.: key facts

Head office: Knowledge House, Shyam Nagar, Off Jogeshwati East, Mumbai

400060, IND

Telephone: 91 22 3084 1300

Fax: 91 22 6644 2222

Website: www.pantaloon.com

Financial year-end: June

Ticker: 523574

Stock exchange: Bombay

Source: company website D A T A M O N I T O R

PANTALOON RETAIL (INDIA) LTD.

• Pantaloon primarily operates multiple retail formats in both the value and lifestyle

segments in India. It operates over 1000 stores across 71 cities in India, and occupies retail

space of about 12 million squarefeet.

• Pantaloon offers food products through retail formats such as Brew Bar, Cafe Bollywood,

Chamosa, Food Bazaar, and Sports Bar.

• Pantaloon offers fashion related products under banners such as aLL, Big Bazaar, Blue

Sky, Brand Factory, Celio, Central, Navaras, Pantaloons and Planet Sports.

• Central, the mall concept of Pantaloon, offer over 300 brands across categories such as

apparel,footwear and accessories for women, men, children and infants, and the product

ranges such as, music,books, coffee shops, food courts, super markets (food bazaar), fine

dining restaurants, pubs and discotheques.

PANTALOON RETAIL (INDIA) LTD.

• In the general merchandise category, Pantaloons operates retail formats such as Big

Bazaar, Big Bazaar Wholesale Club, Blue Sky, Brand Factory, Central, Navaras,

Pantaloon and Shoe Factory.

• The company operates specialty stores in the wellness and health retailing. It operates Star

& Sitara and Fit & Healthy. Pantaloon has presence in the books and music category

through 'Depot' which offers books, music CDs and cassettes, home videos, multimedia

(CD-ROMs) products and gift items.

• The retail store brands that offer products in the telecom and IT category are Gen M, One

Mobile, and M Port.

PANTALOON RETAIL (INDIA) LTD.

PANTALOON RETAIL (INDIA) LTD.

PANTALOON RETAIL (INDIA) LTD.

PANTALOON RETAIL (INDIA) LTD.

SHOPPERS STOP LTD.

BUSINESS OVERVIEWFirst Citizen members base increased to over 17,08,000 and their contribution to sales is 73%.Andheri Store was relaunched after renovation on 5th June,2010.

31st & 32nd SS Department store opened at Bangalore Koramangala on 22nd July, 2010 & Bhopal on 27th July, 2010 respectively.

13th & 14th MAC SIS Store opened at Amritsar and Andheri on 3rd May, 2010 and 25th July, 2010 respectively.

Four Clinique SIS Stores opened at Juhu, Rajouri, GVK-Hyderbad & Garuda Mall –Bangalore.

HyperCity 32% stake acquired on 30th June, 2010, which takes SSL Stake to 51% as on June, 2010.

Hypercity has been awarded “CORPORATE ACHIEVEMENT TO RECOGNIZE QUALITY & EXCELLENCE” –April 2010 by OMAC, France

SHOPPERS STOP LTD.

SHOPPERS STOP LTD.

SHOPPERS STOP LTD.

SHOPPERS STOP LTD.

Shopper's Stop Ltd. Eureka Towers, 9th Floor,

B-Wing, Plot No 504,

Mind Space, Link Road,

Malad (W)

Mumbai - 400064

Phone Numbers:

Tel: (022) 4249 7000

Fax: (022) 2844 5060

TATA GROUP

•Established in 1998, Trent - one of the subsidiaries of Tata Group •It operates Westside, a lifestyle retail chain and Star India Bazaar - a hypermarket with a large assortment of products at the lowest prices. •In 2005, it acquired Landmark, India's largest book and music retailer. Trent has more than 4 lakh sq. ft. space across the country. Westside registered a turnover of Rs 3.58 mn in 2006.•Tata’s has also formed a subsidiary named Infiniti retail which consists of Croma, a consumer electronics chain. It is a 15000-17000 sq. ft. format with 8 stores as of September 2007.•Another subsidiary, Titan Industries, owns brands like “Titan”, the watch of India has 200 exclusive outlets the country and Tanishq, the jewellery brand, has 87 exclusive outlets. •Their combined turnover is Rs 6.55 billion.

TATA GROUP

ContactTrent HouseG-block Plot no C-60 Bandar Kurla ComplexBandra (E)Mumbai 400 051 IndiaPhone: +91 (22) 6700 9000

COMPANY ADDRESS:-P

WestsideEmail: [email protected] Website: www.mywestside.comStar BazaarEmail: [email protected],[email protected]:[email protected]

Website: www.landmarkonthenet.com

BHARTI RETAIL

Bharti Retail: key facts

Head office: Aravali Cresent, 1 Nelson Mandela Road, Vasant Kunj, Phase II, New Delhi

110070,IND

Telephone: 91 11 4666 6100

Fax: 91 11 4166 6137

Website: www.bharti.com

Source: company website D A T A M O N I T O R

BHARTI RETAIL

• Bharti Retail is a wholly owned subsidiary of Bharti Enterprises Limited.

• The two main formats operated by Bharti Retail are Easyday neighborhood stores,

and Easyday Market compact hypermarkets.

• The first stores opened for business in 2008. As of November 2008, Bharti operated

around 12 neighborhood stores.

• Bharti also has a joint venture with Wal-Mart that offers wholesale cash-and-carry

and supply chain management functions.

• Its first cash-and-carry outlet, under the Best Price Modern Wholesale banner,

opened in Amritsar, in May 2009.

BHARTI RETAIL

Reliance Retail: key facts

Head office: Maker Chamber IV, Nariman Point, Mumbai 400 021, Maharashtra,IND

Telephone: 91 22 2278 5000

Fax: 91 22 2278 5185

Website: www.ril.com

Financial year-end: March

Ticker: 500325

Stock exchange: Bombay

Source: company website D A T A M O N I TOR

RELIANCE RETAIL

• Reliance Retail (RRL) operates 'value' formats that include neighborhood stores, all

under one roof supermarkets, mini-marts, and others which offer a range of products

for daily household usage.

• It also operates specialty formats offering consumer durables and information

technology, apparel and accessories, health, wellness and beauty, Apple products,

footwear, jewelry, books, music and entertainment, automotive products and

services and homeware, furniture, modular kitchens, and furnishings.

• RRL has more than 900 stores in 80 cities across 14 states in India.

RELIANCE RETAIL