A PROJECT ON RETAIL MANAGEMENT

SUBMITTED TO; ASST.PROF.MOHD.ZUBAIR AHMED

SUBMITTED BY : JAYA PANDEY ,PRANATI DEVI,SAFIA KHAN, ALI IMRAN,AVINASH TIWARI

LAL BAHADUR SHASTRI INSTITUTE OF MANAGEMENT AND TECHNOLOGY, BAREILLY (U.P)

Contents

Acknowledgement Introduction Objectives Few Examples Of Retail Outlets Innovative Formats Conclusion Bibliography

ACKNOWLEDGEMENT
We would like to thank our project guide and mentor Asst. Prof. ZUBAIR AHMED, Lal Bahadur Shastri Institute of Management & Technology, Bareilly for his encouragement, sagacious guidance, critical appreciation and above all moral inspiration in carrying out this project. We express a profound sense of indebtness for his able guidance and support since the very inception of the project.

Innovation and editions in the overall process of Industry

Objective: 1. Assess the different processes in different formats of retail Industry. 2. To find out the practical problems faced by people in respective
processes. 3. To find out different innovations & practical solutions to these problems.

Introduction: The retailing sector in India is highly fragmented. There are about
12 million retail outlets spread across the country, of which more than 80% are run by small family businesses using only household labour. Traditionally, small-store (kirana) retailing has been one of the easiest ways to generate self-employment, as it requires limited investment in land, capital and labour. Consequently, India has one of the highest retail densities in the world at 6% (12m retail shops for about 200m households).

Growth drivers Of Organized Retail Industry:

1) Increasing urbanization and rising incomes among the young. 2) Good quality supply of land is no longer a constraint. 3) Profitable models have emerged across most product categories. 4) Regulatory environment is becoming more favorable. 5) Capex plans of retailers are becoming more aggressive.

EMERGING TRENDS IN RETAIL INDUSTRY: The table below shows the various retailing companies (both listed and unlisted) are planning to expand their business models in the coming years. We believe it is important to understand this perspective since a pan-India ORP( Organized Retail

Penetration) of 2.5% is a little misleading because the extent of organized retailing varies from category to category.

Now through this graphical presentation , we will describe how ORP varies across the consumers wallet spend.

Few Examples of Retail outlets

1. Pantaloon Retail India Limited : Pantaloon Retail India Limited (PRIL), a Future Group venture, started its
operations with Pantaloon Shoppe in 1993 and has since emerged to be the retailing giant of India with over five million square feet of retail space spread over 450 stores across 40 cities in India. The company clocked revenues worth US$ 887 million in 2007-2008, a 75 per cent increase over 2006-2007. The net profit stood at US$ 29.75 million with a hike of 87 per cent over the previous year.

Product & price

The companys Pantaloons department stores sell a wide range of garments and lifestyle products with about 90% of sales coming from apparel, of which 70% are private label making it the most profitable (gross margin) retailing format in its portfolio. Last year, it also added seamless malls to its format portfolio under the brand name Central, which sell a wide variety of branded goods across the basket spend.

In the last two years, the company has aggressively shifted its business model towards hypermarkets and food supermarkets. We believe that this is where the big growth story lies. In Big Bazaar discount hypermarkets, the company sells consumer goods across the household basket spend - clothing, jewellery, consumer durables, watches, home dcor and furnishing , household goods , beauty and other

healthcare, footwear, gifts, food and grocery items, addressing almost 50% of the household expenditure. The key customer propositions are:

! Wide variety of consumer goods available - an average Big Bazaar hypermarket stocks more than 200,000 stock keeping units.

! Cheaper goods - price discounts on products vary from 1%- 50% vs. unorganised retailers.

! Superior shopping experience in an airconditioned environment and a family outing to the premises add to the attractiveness of a one-stop shop with cheaper goods. Its food supermarkets, branded Food Bazaar, operate within

hypermarkets/malls/department stores and also as independent food supermarkets. They provide the key touch and feel factor, which Indian housewives are used to in the local food markets. Products sold are spread across 7,000 SKUs and include processed and nonprocessed foods, as well as dry and wet staples. All products are sold below MRP and discounts range between 2% and 20%.

People
We sense that there is a gap between demand and supply of talented professionals in this emerging industry. Pantaloon is the fastest growing and the most respected retailer in the peer group, it has managed to attract professionals from other retailers and related industries. In the last two years, more than 30 top professionals have been appointed to take on key roles across IT, supply chain, operations, new business development and product development. To find quality talent at the

lower levels, the company has tied up with educational institutes to train and groom young managers. One of the reasons for its aggressive and successful scale up in the last two years is the creation of a solid second line of management. Going forward, one of the biggest challenges for the other retailers will be to hire and create a good second line of management. We believe this will put pressure on wage costs in the industry and also on operating margins in the coming years, especially for the smaller retailers. The biggest risk for Pantaloon from an HR perspective will be the timing of the entry of foreign retailers. Pantaloon will clearly be a poaching ground for them.

Pantaloon Retail has many firsts to its name in the Indian market, with discounted store formats like Brand Factory etc. setting benchmarks for new players entering the market. Innovative store formats like Hometown - a one-stop shop for all the home requirements, Sports Bar - a sports theme restaurant complete with game courts and screens for match viewing, Health City - a value segment targeted spa and beauty care venture etc., are hitting the market, consolidating the market position of PRIL. The unique selling proposition of Pantaloon Retail is the dual approach to tap both the value segment and lifestyle and luxury segment, by establishing retail formats in each segment like Big Bazaar, Fashion Station etc. aimed at value retailing while Central, Pantaloons etc. captures the lifestyle segment consumers.

2. RPG Enterprises:
Established retail in 1996.

 Revenues: US$ 182 million for 2006-2007. Retail sector activity: Food & grocery, beauty products, speciality- music. Current store formats: Convenience stores, supermarkets, hypermarkets Current outlets: 279 outlets Music world has tie ups with 350 affiliates across the country. Future plans: Setup 2000 stores by 2009 in India. Principal fascia: Spencers, Music World. RPG Retail operates mainly in hypermarkets (Giants) and food supermarkets (FoodWorld). It also has a small presence in health and beauty formats (Health and Glow). RPG Group is one of Indias largest industrial conglomerates. RPG Enterprises comprises more than 20 companies spanning seven business sectors, Retail, IT & Communications, Entertainment, Power & Transmission, Tyres, Life Sciences and Specialities. It has a turnover of circa USD1.65bn. Hypermarkets. After opening the first hypermarket in Hyderabad in 2001, the company took a long time to open its second and third hypermarkets in Mumbai and Vizag in 2004. Recently, the company has reworked its business strategy. The name of the hypermarkets has been changed from Giant Hypermarket to Spencers and the initiative is now being run by Great Wholesale Club Ltd., a subsidiary of Spencer & Co. (fully owned by the RPG group).

Food supermarkets. The food supermarkets venture, FoodWorld is a 51-49 joint venture between RPG Group and Dairy Farm. The JV was formed before FDI in retail was disallowed post 1997-1998. Dairy Farm International Holdings (78% owned by Jardine Matheson) is a leading pan-Asian retailer. There are about 95

FoodWorld supermarkets operating in south and west India. FoodWorld supermarkets are built to service a middle class household's monthly shopping requirements at competitive prices. These supermarkets offer items of daily household consumption; groceries, processed foods, bakery and vegetables. The company plans to expand into the south, and further increase penetration in the west. In our view, the largest challenge for RPG is to show a profit in the near term. The company has Recent press reports suggest the JV between RPG and Dairy Farm may be restructured. According to the reports, about half of the 95 stores will be retained by RPG and the other half by Dairy Farm. RPGs new stores will be called Spencers Supermarkets and will use sales proceeds to expand further. According to press reports, Dairy Farm is expected to divest 51% to stay within the FDI cap.

Shoppers Stop Limited Shoppers Stop, established in 1991 with its flagship store - Shoppers Stop, has now expanded to over 100 retail outlets spread across 1.1 million square feet of built-up area, spanning the entire spectrum of retailing verticals and formats. Private labels account for more than 21 per cent of its retail revenues, with Shoppers Stop registering an impressive total number of transactions to customer footfalls ratio (conversion ratio) of 27 per cent. Strategic partnerships with international retailing players like Mothercare Plc of Britain and Leisure & Allied Industries of Australia, are aiding Shoppers Stop in catering to niche markets. A ggressive expansion plans are in pipeline for formats like Timezone, a leisure and entertainment format venture and Brio - the coffee bar located strategically in their Crossword bookstores.

INNOVATIVE FORMATS BY VARIED RETAIL OUTLETS: Players taking the first-mover advantage More than 72 per cent of Indias population resides in small towns and rural areas with agri-produce retailing forming the lions share of total retail pie in these areas, offering immense potential for food and grocery verticals and value retailing. Players like Reliance Retail, Aditya Birla Nuvo Groups Trinethra Supermarket, etc. have aggressive plans to tap these emerging cities. Players which have established their presence in the top metros are planning their establishments in these emerging cities to gain the first-mover advantage over other entrants. Specialty formats Formats like Wedding Malls, which are unheard of in the far west are making their presence in the Indian market. These stores stock the complete range of wedding needs from apparel to jewellery. Khadi & Village Industries Commission (KVIC) is set to roll out a string of swanky Khadi Plazas, which would showcase the handloom textiles in a new form. Over 7,000 existing outlets are to be beefed up to cater to the changing tastes of the young consumer.

 A latest addition to the diverse formats are the Village Malls, with the fair price shops being revamped to cater to larger needs of the local populations. Gujarat Government has spearheaded this initiative with 512 malls launched and another 508 on the anvil.

Click-to-buy phenomenon
Online Retailing Increase in the number of broadband and dial-up internet connections, limited
personal time, increased use of plastic money, and large young population that spends a considerable time online are facilitating growth of online shopping. Players like Rediff.com, eBay.in, Indiatimes.com were the first entrants in the Indian online retail space, clocking impressive revenues through online transactions. Recent players to enter this niche market include the Pantaloons Retail India Ltd., through its Futurebazaar.com venture.

Emerging rural retailing

Rural hypermarkets are growing at a blistering pace, providing multiple services from creating a platform to buy and sell farm produce to banks and restaurants. ITC Choupal Saagar: Currently there are 14 outlets in operation, and ITC plans to increase the number to 700 over the next 7-10 years. Choupal Saagar retails products and also acts as a procurement hub for ITCs e-choupals where farmers are offered better rates for their produce, as compared with the prevalent mandi rates for the same.

 DSCLs Hariyali Kisan Bazaar: Over 70 outlets and proposed to touch 200 over the next 12 months. Indian Oil Corporations Kisan Seva Kendra: Offers fuel, agri-produce, FMCG and value added services across a network of over 1400 outlets. Reliance Retail and Pantaloon Retail are expected to venture more aggressively into the rural retailing space. A sian Development Bank would lend US$ 150 million for revival of Khadi. This will bolster employment in the rural areas. Cashing-in on the transit channels Fast paced infrastructure development, including development of new international airports and metro rails is opening up new avenues for retail The Airport Authority of India is embarking on the upgradation of 9 metro airports and 15 non-metro airports, with plans to spruce up the retail space in the airports as well The joint-venture between shoppers Stop and The Nuance Group AG has won the contract for setting up duty-free and duty-paid retailing outlets at the upcoming Bengaluru and Hyderabad International Airports Mass Rapid Transit System, currently in operation in Delhi, and in the pipeline in other metro cities like Benguluru and Hyderabad is also expected to offer immense retailing potential With 53 metro stations in operation and 79 stations proposed to come up by 2010 in Delhis Metro Rail, several retailers are in the fray to capitalise on the commercial potential After the Delhi Metro Rail Corporation awarded Omaxe Limited, the Chawri Bazaar Commercial Development. Omaxe has entered into a consortium agreement with Vishal Retail, a Delhi based retailing major.

CONCLUSION
With the dynamic nature of time, the organized retailing along with unorganized retailing are finding out ways to increase their respective market share with innovative and non-conventional mode of retailing.The Retail outlets are also going for rhe complete analysis of market and then make out their space by filling the gaps which this era of customized market requires.