Stay abreast of the fast moving economic super-power — India!
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Stay abreast of the fast moving economic super-power — India!
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Retail News April 2008 |
Wal-Mart takes retail tips from P&G India
Wal-Mart, the $340-billion retail giant, is looking to its long-time partner Procter & Gamble to learn the tricks of the Indian market, as it tries to get a foothold here.
Globally, the relationship between the two goes well beyond a vendor-retailer relationship and P&G has offered to share its understanding of the Indian market to help Wal-Mart in building efficiencies in supply chain and merchandising for its cash-and-carry business.
Senior officials at P&G told ET that its India unit has shipped its first consignment of personal-care products to Bharti-Wal Mart, a joint venture for the cash-and-carry and logistics initiatives.
While the joint venture will focus on B2B business, the Bharti group plans to launch small-format retail stores shortly. The officials said P&G India is helping Wal-Mart understand the nuances of doing business in India. Wal-Mart’s India exposure has been so far restricted to sourcing from the country for its global operations.
The Wal-Mart official said the first cash-and-carry store is expected to open by 2009.
April 8, 2008
Source: Economic Times
Vishal Retail to rope in kiranas to take on biggies
So far India’s retail story has largely been of rivalry between traditional kirana stores and the emerging big retail. But this year could see a new partnership emerge between the two. In perhaps the first major attempt by a big retailer at co-opting kiranas in the country, Vishal Retail is rolling out a mega plan to turn existing kirana stores into their franchisees.
“This partnership will help kiranas survive the onslaught of organised retail as it will enhance their competitiveness. Kirana stores can avail of the benefits on account of the economies of scale, a key advantage for big retailers,” says Vishal Retail CMD RC Agarwal, adding that his attempt will also tone down the debate of traditional kirana versus organised modern retail.
As per the plan, Vishal Retail will completely take over the supply chain of kirana stores and provide them with technology, new practices, visual merchandising skill and special promotional schemes on offer in the company’s hypermarket — Vishal Megamart. Vishal will also offer a minimum guarantee to all kirana stores, which will ensure that the latter doesn’t lose out on revenue after having joined hands with Vishal. Kirana stores, which choose to take the franchise route, will also sport ‘Vishal’ brand.
The partnership will also help Vishal. “We can expand very fast under the franchisee model,” says Mr Agarwal. Relatively-small Vishal Retail plans to leverage this army of kirana stores to take on the might of the likes of Reliance, Future, Wal-Mart and Subhiksha.
April 8, 2008
Source: Economic Times
Mahindra says not in talks with UK's Tesco
Diversified conglomerate Mahindra and Mahindra on Friday said it is not in talks with British retail giant Tesco regarding any partnership for the latter's foray into India.
A British media report, quoting unnamed sources, had on Thursday said that Tesco has identified a "preferred partner" for entering the Indian retail market and the partner was likely to be among a group that includes M&M, Bombay Dyeing and National Dairy Development Board.
Reacting to the report, an M&M spokesperson today said in a statement that "Mahindras is not in talks with Tesco for any partnership or agreement".
April 4, 2008
Source: Economic Times
Aditya Birla Retail is looking at increasing the number of supermarkets and hypermarkets to ramp up its expansion across India, Sumant Sinha, chief executive officer, said today.
“Our rollout strategy is dependent on our ability to execute. We are planning to launch more stores,” Sinha said on the sidelines of the company’s press meet.
Currently, the company operates two formats—supermarkets and hypermarkets—under the `More’ brand. Aditya Birla Retail has 500 supermarkets and 2 hypermarkets at present.
April 3, 2008
Source: Economic Times
Aditya Birla Retail to open ten hypermarkets
Aditya Birla Retail Ltd. (ABRL) on Thursday unfolded its expansion plan to add this year around ten hypermarkets to its existing chain of supermarkets and hypermarkets across India. The expansion plan will involve an investment of Rs. 250 crore. Besides, there is a move to roll out a large number of superstores under the ‘More’ brand name.
“I believe we can roll out an equal number of supermarkets, which we have opened last year,” ABRL CEO Sumant Sinha told reporters, while announcing the tie-up with Oracle for implementing IT solutions in its retail operations.
He said the company had plans to open ten hypermarkets this year. Mr. Sinha said the company had selected Oracle Retail merchandising, planning and supply chain applications to drive its growth plan in India.
With a centre in Bangalore to supports its retail clients both domestic and international, Oracle, which started providing solutions for the retail industry 18 months back in India, is also very bullish about the Indian market.
April 3, 2008
Source: Hindu Business Line
Reliance Retail may explore overseas markets
Reliance Retail (RRL) is likely to cede majority control to UK clothing and food chain Marks & Spencer (M&S) in their proposed joint venture in India. This marks a new beginning in the Indian conglomerate’s retail strategy where it is willing to be a minority partner with large global brands for domain knowledge and clout.
A senior M&S executive, Mark Ashman, is likely to head the company as its chief executive officer while Spencer Sheen, another M&S executive, will look after operations. A bunch of expats is likely to be relocated to India to manage the business, which will initially start with clothes and include homeware and food later.
At the same time, Reliance would like to explore the overseas markets. Talks are on with other global brands for possible associations, which could be franchisee agreements, licensing deals or joint venture partnerships.
M&S wants the international business to contribute 15-20% of group revenues within the next five years. It is believed that Planet Retail will continue to operate the existing 14 stores in India while the new JV will own and operate the new stores. The UK retailer is likely to reduce prices in India further (there was a price correction in 2007) for a bigger volume play. Sources said efforts are on to work out a viable local sourcing strategy, which is expected to go up to almost 100% from 30%.
March 31, 2008
Source: Economic Times
Reliance Retail looks at Town Centres, exclusive outlets
After opening 11 formats focusing on a variety of retail segments, Reliance Retail is now working on cash-and-carry cum entertainment malls for smaller towns and exclusive outlets to address all furnishing, kitchenware and building material needs.
Christened Reliance Town Centres, these outlets would come up in towns with a population of 1-4.5 lakh. “The first such centre is likely to come up in Haryana by the year-end,” Mr Raghu Pillai, President and Chief Executive Officer (Operations and Strategy) of Reliance Retail, said.
Addressing a press conference here on Saturday, he said the Town Centres would house cash-and-carry section, multiplexes, healthcare and financial services. The company had plans to open 400 such centres in the next few years. He said there were about 700 urban centres in the country beyond the big 70 cities.
March 30, 2008
Source: Hindu Business Line
Shoppers’ Stop is planning to cart in Macy’s products
If things go as per plans, shopping for Macy’s products at Shopper’s Stop outlets could become a reality soon. K Raheja Corp’s Shoppers Stops’ is said to be holding parleys with Macy’s Inc, the world’s largest retailer of fashion apparel, cosmetics and home furnishing merchandise, for retailing the US chain’s private labels in India.
Govind Shrikhande, CEO, Shopper’s Stop told DNA Money: “There have been some basic discussions on product placement.” Due to Macy’s “internal problems,” the discussions hit a roadblock. “But, the idea of retailing Macy’s products can become a possibility in the future,” Shrikhande said.
Macy’s retails 1,000-odd brands. Previously known as the Federated Department Stores, it also owns the upscale Bloomingdales stores. It initiated a name change last year to become Macy’s Inc considering that this brand contributes 90% of its sales. More than 850 stores under the Macy’s and Bloomingdales branding operate across 45 states in the US, the District of Columbia, Guam and Puerto Rico.
Shrikhande said Macy’s already sources products from India and Shopper’s Stop’s proposal was to stock those products that the US chain already sources from here.
Following up on its tie-up with UK-based Mother Care, Shopper’s Stop is now looking out for exclusive tie-ups with large overseas retail chains for products and brands, according to Shrikhande. These would be particularly in the apparel and cosmetics space. “We are not specifically looking at licensing deals but tie-ups,” he said.
March 24, 2008
Source: DNA
Subhiksha in world 50 local dynamos list
Boston Consulting Group has included organised retail chain Subhiksha in its list of World's top 50 local dynamos. The other Indian companies in the list include ITC Ltd, ICICI Bank, Amul, CavinKare Group, Apollo Hospitals and SKS Microfinance, reports Our Bureau.
The study features companies that have understood and tapped the dynamics of their local markets through innovative business models.
Founded by first-generation entrepreneur R Subramanian, the ten-year old retail chain Subhiksha increased customer footfall and growth by selling products at discounted prices. "The consistently better value that we offer to our customers, coupled with a no frills approach and multiple stores in every city not only en-dears us to our consumers but has made our overall robust business model the centre of attention for many others," said Mr Subramanian in a press release.
Subhiksha currently operates 1,110 outlets spread across ten states. The BCG study has 15 companies from China, including the Internet search engine Baidu.com. The study includes companies from Indonesia, Malaysia and Mexico.
March 22, 2008
Source: Economic Times
Metro to invest Rs 300 cr in 2 stores in Mumbai, Kolkata
Metro Cash & Carry India, the arm of Europe's second largest retailer Metro AG, would invest around Rs 300 crore in two stores in Kolkata and Mumbai. "We have a plan for two stores - one each in Mumbai and Kolkata" Metro Cash & Carry India head corporate relations, Vishal Sehgal said adding that "tentative investment for each store is around Rs 150 crore including cost of land".
With these two new stores, the total number of Metro Cash & Carry stores across the country would be five. Currently, there are three operational stores, two in Bangalore and one in Hyderabad.
Sehgal said the timing of the opening of the two new stores has not been finalised yet, but it would be sometime around the middle of this year. According to sources, the Kolkata store is likely to open by May-June this year. The store was scheduled to open in 2007, but land related issues had delayed the process.
Asked about the expansion plan beyond 2008, Sehgal said the Indian company board would meet soon after the results of the parent company were announced on March 17.
As per the specified format, each store would be a ground structure on six to seven acre and would have ample parking space. Being cash and carry, a typical Metro store did not cater to individual buyer. It is a members-only store with customers needing to register themselves on the basis of their trade registration number, be it CST or VAT.
March 16, 2008
Source: Economic Times
Spencer Retail to invest Rs 250-3,000 cr in 2008-09
RPG group's Spencer Retail on Friday said it will invest Rs 250 crore to Rs 3,000 crore across the country in 2008-09 which also includes setting up 35 stores in Gujarat.
The stores in Gujarat would come up at Surat, Rajkot, Anand, Nadiad, Mehsana, Vapi Ahmedabad and Bulsar, its Group President and CEO (retail) Sumanta Banerjee said.
Talking to PTI after launching Spencer's first hyper mart in the city today, Banerjee said that they have been planning to invest about Rs 250 crore to Rs 3,000 crore in the hyper mart format.
Spencer has 400 outlets with 15 hyper markets, 11 super markets and 374 daily and express stores across 55 cities in the country. The company will also launch hyper marts in Bihar and Jharkhand, Banerjee said.
RPG group's retail outlets which include Music World, Books and RPG Cellucom currently stand at 550 in number and is expected to grow to 2,000 stores by 2009 and 5,000 stores by 2011, Banerjee added.
March 14, 2008
Source: Economic Times
‘Imported Bazaar’ now in Big Bazaar stores
Seeing growing consumer interest in imported goods, particularly in the foods and wellness segment, retail major Future group has decided to open shop-in-shops with the brand name ‘Imported Bazaar’ at all its Big Bazaar outlets in phases.
To begin with, the company has opened two such shops-in-shops in Hyderabad. It has tied up with Sankalp Retail (Future Group holds 28 per cent in Sankalp) to set up these stores. Next week, it will open two such outlets in Bangalore.
Addressing a press conference here on Thursday, Mr Soumitra Ghatak, Chief Executive Officer of Sankalp Retail Value Stores, said the company would open 150 such shops-in-shops by the end of 2009. “There is a huge appetite among the Indian consumers for the segments we are looking into. It is going to be a destination store for all our customers who have an eye for popular international brands,” he said.
March 13, 2008
Source: The Hindu Business Line
Aditya Birla Retail plans to have 500 stores
Aiming to corner a major chunk of the multi-billion retail market, Aditya Birla Retail plans to have 500 supermarkets across the country by March-end. Aditya Birla Group Chairman Kumar Mangalam Birla said after the Group forayed into the retail sector a year ago, it has rolled out over 400 outlets of its retail brand 'more'. Birla was talking to reporters after launching the company's first 'more' store here.
He said the retail venture was well positioned with presence in metros and mini-metros like Vadodara, Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Mangalore, Pune, Mysore, Vizag and Vijaywada.
He said Aditya Birla Retail was started with a simple mission - "to change the way India shops". It launched its first supermarket in Pune in May 2007 and since then the number has grown to 430 and would touch 500 by the month-end, Birla said.
The growth of multi-chain stores is yet to reach its desired level in the country, he said. Of an estimated retail market size of $300 billion, supermarkets and hyper markets have less than four per cent market share, Birla said.
The Group has identified various sites and work is in different stages of development, Birla said. Megastore is a one-stop shop for the entire family offering 60,000 products catering to every need of a household, Birla said.
March 5, 2008
Source: Economic Times
India ranks 44 as global retail destination
India has been ranked 44th on the list of most preferred destinations by global retailers, according to a report by real estate consultant CB Richard Ellis.
The report explores the globalisation of the retail industry and scrutinises retailer presence in relation to market sectors, country of origin, regional trends and other influences.
"Even though the Indian economy is growing at a rapid pace with consumers having more buying power, we are still only at the 44th position," said Anshuman Magazine, chairman and managing director of CB Richard Ellis (South Asia).
"This is primarily due to FDI (foreign direct investment) restrictions in retail and also relatively lower average per-capita income in the country. Hopefully in the future, if the FDI norms are relaxed, coupled with expected economic growth, India would move up in the rankings," Magazine added.
Among the BRIC (Brazil, Russia, India and China) group of countries, only China and Russia have been able to make it to the top 10.
Britain leads the chart with the presence of 55 percent retailers, Spain second with 51 percent retailers followed by France, a close third with 49 percent retailers. France and Germany also performed strongly in the global ranking, achieving third and fourth positions respectively. The United Arab Emirates, China and Russia figured in the top 10, the report said. Interestingly, the US was ranked 11th with the presence of 39 percent of international retailers.
March 29, 2008
Source: Economic Times
Stealing the retail show: India has highest shrinkage rate
I am a thief, I stole from Wal-Mart”, a couple of convicted shoplifters in U.S were forced to carry these signs outside a store of the country’s largest retailer, Wal-Mart. It is hardly the kind of punishment that would be meted out to their Indian counterparts. Indian retailers are comparatively lenient and refrain from publicly `shaming’ first-time offenders or those who indulge in small-time pilferage.
Says R Subramanian, managing director of Subhiksha; “We treat such offenders as misguided people and therefore our policy is to deter. We put social pressure by informing parents (if he or she is a teenager), employers or just fine them.”
Big Bazaar follows a similar policy. Says one of its top officials; “Our rule is to not embarrass customers who steal (since many resort to it for the first time). So once our officials observe a case of stealing, the customers are discreetly taken away and questioned”. Hypercity seeks a written apology from the customer and forces them to cough up a fine.
Shrinkage could be the result of supplier theft, customer theft, process and employee theft. India has the highest shrinkage rate of 2.9% among 32 countries, as per a recent global survey of global retail theft conducted by Centre for Retail Research, England.
Shrinkage rate basically refers to the percentage of loss of products between manufacture and the point of sale which includes wastage. And since profit margins in retail are quite low (3-5% of sales), such thefts have higher impact on profitability. On an average, a retailer would have to sell 20-30 times more of a stolen product to recover the money.
In India, the items that get flicked are ‘small and pocketable items’; popular ones being shaving accessories (including cosmetics), confectioneries and chocolates, biscuits, toys and apparel. As per the survey, employee theft accounted for nearly 30% of overall retail theft globally.
In the business of retailing, framing a policy for deterring crime could be tricky. Experts say it is about striking a right balance between making stores seem welcoming as well as secure. So instead of treating shrinkage as just a security issue, retailers globally are bringing employees into the ambit. They are involving the whole team right from the manager right down to the floor staffs by incentivising them to reduce shrinkage levels.
March 28, 2008
Source: Economic Times
Mall mania appears to be ebbing in the country. Even as falling sales seems to be forcing some retailers to quit malls, at least two malls in the NCR are being converted into office, signalling difficult times for some malls. Sensing this, mall developers are going slow on building new malls. According to property consultant Knight Frank, the number of malls likely to come up in the next two years may be just a little over half the projected figure of 250.
Property consultants say higher rentals and poor mall management have made it unviable for some retailers to carry on business at certain malls.
Most malls in Gurgaon have some spaces unoccupied in them. Some were never taken up, while in others, retailers, including a few big brands, quit after they found the going tough. The problem in Gurgaon seems more pronounced because it has too many malls in a small area.
A large part of the footfalls, which a mall attracts, doesn’t get converted into sales,” says retail consultant Sugato Bose. There is a growing realisation among mall developers that the market demand may be much less than what they had anticipated, says Knight Frank India chairman Pranay Vakil.
Parsvnath Developers COO B P Dhaka says it’s been a learning phase for developers. “A solid foundation, however, has been laid now. Smaller players might quit the game. But large developers are here to stay.”
March 26, 2008
Source: Economic Times
328 new malls by 2010: retail report
Some 328 new shopping malls are expected to come up in metros and so-called tier II and III smaller cities over the next two years, forcing developers to find innovative ways to attract stores and maintain foot traffic from shoppers.
A report titled Upcoming malls—2008 and beyond, compiled by real estate consultancy firm Jones Lang LaSalle Meghraj, says northern India will lead the retail boom, with 136 new malls by 2010.
While New Delhi is expected to get 15 malls, its suburbs, Faridabad and Ghaziabad, will get seven new malls each. Mumbai leads the pack among individual cities with 30 malls planned in the next two years. Real estate firms, such as DLF Ltd, Akruti City Ltd, Nirmal Lifestyle Ltd and Oberoi Constructions all have retail plans in the western and central suburbs of the country’s financial centre.
Kolkata, probably one of the last metros to be hit by the retail boom, has 18 malls lined up. The landmark Statesman House in central Kolkata, which would be turned into a 2 million sq. ft shopping destination by Emaar MGF Land Ltd, is one of the biggest malls coming up in India.
Some experts are sceptical about the numbers. Retail consultants note only 22 new malls became operational in 2007 nationally. For example, just three of the slated 15 malls opened in Mumbai last year, because the others are still in various stages of completion.
Still, the Jones report points out a large number of emerging hot spots—smaller cities and towns that will get their first malls by 2010.
For instance, with 15 new shopping malls being set up by film director Prakash Jha, who has ventured into mall development, several areas in Bihar and Jharkhand, such as Patliputra, Sitamarhi, Hazipur and Bettiah, would soon feature for the first time on the Indian organized retail map.
In southern India, Kochi in Kerala is expected to have 13 malls by 2010, just one less than a shopping hub such as Bangalore. With huge townships and residential ventures, such as Sobha Developers Ltd’s largest township in Maradu, Kochi developers are upbeat about the city prospects.
The study forecast both local and national developers setting up malls in previously unlikely places. The business strategy of EWDPL India Pvt. Ltd, a three-year-old developer, revolves around setting up first-time malls in small towns.
“We are finalizing a deal in Kottayam which would be the smallest town to get a shopping mall, and scouting for land in Alleppey in Kerala,” said Avnish Hasija, a director. The firm is developing malls in Belgaum (Karnataka), Bilaspur (Chhattisgarh) Kolhapur and Nanded (both in Maharashtra).
March 24, 2008
Source: Livemint
Retail biggies discover future in hypermarket format
Hypermart is the flavour of the season. The big guns of organised retail have entered new markets with small-sized supermarkets and branded convenience stores. Now they are ready for bigger investments and larger formats.
Reliance, Aditya Birla and Tata’s Star Bazaar are focusing on large European-style hypermart roll-out while old hands like Spencer’s and the Future Group too are scaling up their hypermart formats. Hypemarket are the next stage in retail revolution for some brands. They will get higher margins, volumes and more brand recognition.
“The supermarts have already established brands, now hypermarts can levearge that brand recognition and create a captive customer in smaller markets. European style of hypermarket with roomy isles and white lights seems to be favoured by the new players in India”, says a marketing consultant attached to an Indian retail business house.
According to a Technopak study, 66% of the total domestic investments in retail (estimated to be at $1,011 billion by 2017) would be done in hypermarts and supermarts formats. In the next five years, 32% of the new investment in retail is expected to be in the hypermarkets, says the study.
The Tata, Reliance and Aditya Birla groups have by co-incidence of design launched their hypermarts in Gujarat during the beginning of this year. For most, it was a combination of easy availability of property in a reasonably mature market. “There was property easily available since retail development had commenced in Ahmedabad.
Since the hypermarket business was new to us, we wanted to test in a market that was value-conscious and gauge the results before spreading our footprint across the country,” Smeeta Neogi, brands head, Trent, told ET. Russell Burman CEO, hypermarkets, Aditya Birla Retail, says that the Gujarat opening and timing of hypermart is a coincidence.
“We have been planning it for sometime. It has more to do with which property developed early,” he said. More is planning to open some dozen hypermarts this year in NCR and across tier two cities in India. Reliance, which has already opened two hypermarts in Gujarat, is also rolling out the retail model across the country.
March 24, 2008
Source: Economic Times
Corporates optimistic on retail boom; line up huge investments’
As the investment rate of 36.3 per cent is driving the Indian growth story, corporate retailers across the country have announced investments plans amounting to Rs 1,31,804 crore in the past six months for expanding their network of stores in the next four-five years to cash in the retail boom, according to the ASSOCHAM Investment Meter (AIM).
According to AIM — which has been tracking investments from September 2007 to February 2008 — the organised retail, growing at an estimated 25 per cent, is set to penetrate the tier II and III cities like Pune, Chandigarh and Hyderabad, as they are attracting a major share of investment announcements worth Rs 27,550 crore.
Real estate majors like Unitech and DLF have drawn massive plans to cater to the burgeoning demand of the shopping malls.
Capex amounting to Rs 65,000 is planned to be invested in real estate development for retail space in the next four to five years while ‘food and grocery’ is the next big retail segment with an investment plan of Rs 22,100 crore.
With inflated metropolitan land prices and the growing untapped consumer markets in smaller cities, tier II cities such as Hyderabad, Kochi, Goa, Chennai, and Chandigarh are becoming the preferred destination for investment by these leading real estate players for exploring retail business opportunities, said ASSOCHAM President, Mr Venugopal N. Dhoot.
With more and more corporates investing in the sector, the prospects of job creation will surge in the next five years in cities like Hyderabad, Pune, Surat, and Chandigarh, among others.
March 24, 2008
Source: Hindu Business Line
Retailers line up big investments for expanding stores
Riding on the retail boom, corporate majors, including Reliance Retail, Aditya Birla Group and DLF, have unveiled plans to invest Rs 1,31,804 crore for expanding network of stores in the next 4-5 years, industry body Assocham said.
Reliance Retail has announced plans to invest Rs 24,000 crore for setting up hyper marts and Rs 12,700 crore for establishing grocery stores. According to the Assocham Investment Meter, which tracked investments for September-February period of this fiscal, the Aditya Birla group will pump in Rs 8,000 crore for setting up chain of stores across the country.
Companies such as Wadhawans Food Retail, Subhiksha, Dabur have also made investment announcements worth Rs 1,500 crore, Rs 300 crore, and Rs 200 crore respectively in smaller cities.
The past six months have witnessed a major expansion in the textile and apparel segment by large retailers, including Provogue, Trent, Arvind Mills which have lined up plans to invest Rs 7,900 crore for setting up new stores.
March 23, 2008
Source: Economic Times
ICRIER report on organised retail likely by July 15
The Commerce Ministry mandated ICRIER study to assess the impact of transnational retailers on mom and pop stores is likely to be ready by July 15.
The Indian Council for Research on International Economic Relations (ICRIER) is carrying out the study on organised retail, focusing on its effects on small retailers and vendors in the unorganised sector.
The parameters include organised retail’s impact on employment, consumers, farmers, manufacturers and on pricing. Till the study is complete, the recommendation to allow 51 per cent foreign direct investment in niche retail sectors such as consumer electronics and sports goods has been put on hold.
The Prime Minister’s Office (PMO) had directed the Department of Industrial Policy and Promotion under the Commerce Ministry to conduct an impact study in early February.
The survey is being carried out among consumers, retailers, and malls across India in two phases.
In the first phase, the study will be conducted in 20 cities that already have malls. In the final phase, the ICRIER will study the response of small shops and consumers in cities where organised retail is at an early stage. Technopak will be assisting ICRIER in the study.
Researched reports indicate that as much as $35 billion will be invested in the Indian retail sector alone in the next five years. The domestic retail market is expected to grow from $336 billion in 2006 to $590 billion in 2011.
Assuming that the share of modern retail grows from the current level of four per cent to the estimated 16 per cent in the next five years, the absolute market size of traditional retail will also grow from $324 billion in 2006 to $493 billion in 2011.
March 13, 2008
Source: The Hindu Business Line
Organized retail set to embrace neighbourhood low-cost stores
Drummers Dharam Pal and Deepak Bhatt are the new face of advertising for Pantaloon Retail (India) Ltd. Well, almost.
Their job is to get the floating crowd in east Delhi’s middle-class neighbourhood to step into the just-opened discount store run by the country’s largest listed retailer. At Rs450 for four hours of attention grabbing, the pair are a steal. From keeping advertising rudimentary, getting consumers to pay for plastic bags, and to running some outlets air-conditioning free, discount stores such as KB’s Fair Price are stripping out the costs from organized retailing in India as they prepare to make inroads into the neighbourhood-store format. “It’s a frugal store,” claims Damodar Mall, Pantaloon’s head of new ventures. “The whole concept of frugality connects well with the consumers.”
Value-conscious Indian consumers have, for decades, shopped at neighbourhood stores, often on credit and barely noticing the sweltering temperatures in mostly cramped and fully-crammed stores squeezed into a few hundred sq. ft. It’s a no-frills version they have been comfortable with, and while big retailers, new to the game, have mostly focused on glamourous, self-service, full display shelves, they are now starting to expand into the discount model, which essentially is a full store without the costs.
Pantaloon’s founder Kishore Biyani is of the opinion that KB’s Fair Price fits into his idea to reach out to the consumers hesitant to shop in shimmering malls they perceive as expensive propositions. Saurabh Chadha, head of KB’s Fair Price, claims prices at his stores are cheaper ranging between 8% and 25% compared with any other modern retailer. “We have customers coming in Mercedes and on cycles,” he says. “At the end of the day everyone likes to save.”
Indeed, a recent study by research group Nielsen Co. found an overwhelming 91% of Indian consumers surveyed voting for “Good Value for Money’ as the prominent factor behind selecting a grocery store. Chennai-based Subhiksha Trading Services Ltd has grown to be one of India’s biggest retailers by selling cheaper grocery products at stripped-down outlets.
Pantaloon opened a dozen of KB’s stores in northern New Delhi in August as part of a pilot project and so far opened in the city’s western and eastern parts as well. The company plans to roll out about 250 such outlets in the next two years in the New Delhi region and overall 1,500 such stores in other cities in during the same period.
Every store will have limited ‘stock keeping units’ or fewer varieties of goods, in this case around 300 products that are the “basic essentials” for daily needs. For example, the firm will stock about eight brands of toothpaste against 70 brands available in the market or only a dozen biscuit brands instead of about 150 a supermarket would stock, says Chadha. He adds the firm would stock a limited number of some of the most popular brands that it has identified through market research.
March 10, 2008
Source: Livemint.com
Retail biggies bet on high-end in-store labels
Call it the second act of the Indian retailer’s private label story. After consolidating their presence with private labels which were competing with mainline brands on value and cost parameters, some leading chains are now planning to create a second line of premium private labels.
RPG Retail, Future Group, Shopper’s Stop and ITC’s Wills Lifestyle, among others, have or intend to create a high-end line of in-store brands which, in turn, will enhance their store image as well. Yet others like Reliance Retail and the Aditya Birla Group too, want to enter the game at a later stage, claim industry sources.
All this comes at a time when retailers’ private labels in categories like apparel, accessories, personal care, FMCG and food products have found steady acceptance from India consumers. Private labels account for around 15-20% of the topline for some big Indian retailers, nearly half that of their global counterparts such as Wal-Mart and Tesco.
Wills Lifestyle forayed last year into the ‘special occasionwear’ segment, featuring topline Indian designers. “That already contributes 15-20% towards our revenues,” ITC’s lifestyle retail business division VP (sales and marketing) Atul Chand said. Future Group too has recently rolled out a portfolio of premium in-store brands such as Lombard and Urbana.
RPG Retail is contemplating a premium positioning for an assortment of products such as ready-to-eat Indian and international items. “Indian consumers are looking at products which they can indulge in. Such premium labels may not necessarily have a premium pricing but can feature product innovations,” said RPG Retail CEO Sumantra Banerjee.
Future Group CEO Kishore Biyani believes a premium private label needs to have a superior product quality to gain the attention of the Indian consumer.
However, a section of the industry believes it is too early to launch top-end private labels. “It will take at least another five years for the market to mature enough to accept retailers’ in-store premium brands. Reliance Retail too has plans but only after we have a strong national presence to provide the necessary scale,” Reliance Retail president & chief executive (lifestyle) Bijou Kurien said.
Westside claims that it is not keen to create higher price points just to improve its imagery. Neeti Chopra, head, marketing adds that they are offering more value-added products at the top end under existing labels. “We have launched a premium menswear line called Ascot, as a shop-in-shop concept, keeping in mind that men are more brand conscious. But this was done to create a differentiation from the existing offerings.”
March 10, 2008
Source: Economic Times
Lease rentals, interest costs hit retail earnings
Though the festive season gave a good opening to retail majors in the December quarter, yet it could not send their cash registers ringing. Delay in rollout of stores, skyrocketing lease rentals, higher interest and energy costs were some of the reasons that led to a slowdown in the sector’s earnings during the third quarter.
Not only has the quarter-on-quarter growth remained flat, but also the year-on-year sales growth fell drastically from 113% to 47%. Among this gloom for the established players, the new players like Vishal Retail and Koutons Retail have shown good performance.
Though things look gloomy right now, scenario would be different once expansion plans of major retailers comes on stream. Higher volumes would be the key differentiator. During the quarter, Shoppers’ Stop opened one department store and couple of other stores in other formats, Pantaloon opened three stores, and Provogue opened six new stores.
The companies are increasing their geographical presence in the wake of increasing competition. Launching new formats to tap the customer’s wallet is another aspect, which has caught up retailers’ fantasy. Shoppers’ Stop opened Arcelia, a complete store for women. Pantaloon’s launched its first office product store, Staples.
Companies are also experimenting with formats like inter-changing between large and small formats depending upon the location. This has helped to boost volumes as well as the average selling price. In case of Shoppers’ Stop, the average transaction size rose 11% for the current quarter over the same quarter in the previous year and same stores sales of 17%. Players like Provogue and Pantaloons have also witnessed the similar movement.
For organised players, the total expenses as a per cent of net sales have increased by 400 bps in this quarter to a record high 96%. Retailers have been able to better manage their inventory as turnaround days have come down. Staff cost is the only expense, which seems to be under control.
Other operating expenses like interest, energy, selling and administration cost continue to grow faster than revenues, and thus eat into the operating margins. Hence, operating margins have reduced to 3.7% of their revenues sale compared to 7.7% during the corresponding quarter last year. Many companies have already provided for the impending levy of service tax on lease rentals, even though the court ruling on the same is still awaited.
Among individual retailers, Pantaloon Retail continues to outgrow the industry and recorded 63% y-o-y growth during December 2007 quarter. Although this is lower than 80% growth recorded during September quarter, yet the momentum continues to favour the company.
Overall, the profitability of the sector has seen a sharp decline. Shoppers’ Stop has seen a decline in its overall profit margins. They stand at 0.7% of Q3 sales as compared to the 8.8% in Q3FY07. Going forward, the management expects to gain from economies of scale once a sizeable number of stores become operational. Similar is the story for Provogue and Pantaloons.
March 6, 2008
Source: Economic Times
Little room for private labels as big durables brands slash prices
After the initial hype, most modern retailers are going slow on launching private labels in the Rs 22,295-crore consumer durables space. Industry observers say big durables brands are competing aggressively with private labels in the wake of a massive price erosions.
Retailers don’t expect the contribution of private labels to exceed 4% of total industry sales as against an earlier estimate of around 15-20%. Little wonder that many big organised consumer durable retailers like Reliance Digital and Croma (from the Tata-Woolworth venture) are now focusing on opening more stores that stock big-brand durables.
Reliance Retail had planned to set up a huge after-sales network for its private label consumer electronics and home appliances. Besides, it had also hoped to make after-sales service its USP by taking over the service of branded products as well. But now, company officials say they would rather focus on scaling up their existing formats before launching private labels.
What further upset the private label cart was the fact that big-brand durable marketers quickly came out with their price-warrior models and standalone local durable chains such as Vijay Sales and Sony Mony in Mumbai, Vivek’s in Chennai started offering deeper discounts, thereby blunting the private labels’ biggest competitive strength, price.
Says Manoj Kumar, chief (consumer durables & electronics), Home Solutions Retail India, a full-owned subsidiary of Pantaloon Retail; “Our private label Koryo is competitively priced and has an equally strong after-sales network, thereby getting us the scale. Koryo products are priced 20-25% cheaper than other brands like LG and Videocon. The Koryo brand sounds like a Korean brand, and that has also helped push up sales.”
The Koryo range consists of air-conditioners, flat colour televisions, home theatres, DVD players, microwave ovens and irons and will be sold through Pantaloon’s Electronics Bazaar stores.
March 5, 2008
Source: Economic Times
Global fast-food major McDonald’s launched its first Chennai outlet at Ascendas IT Park, off the city’s IT corridor. McDonald’s has come to Chennai, almost 11 years after it opened its first outlet in Delhi. This is in line with the company’s expansion plans in southern India. By the end of the year, it plans to open one more in Chennai. A total of 20 restaurants are planned in the region over two to three years.
Announcing the launch, Mr Amit Jatia, Managing Director and joint venture partner, McDonald’s India (West & South), said eating out has become extremely popular in Chennai and “we see a lot of potential here”.
April 2, 2008
Source: Hindu Business Line
Noida market loses footfall to new mall
Will large malls finish small retailers? While the debate goes on in academic circles, a visit to Noida in the suburbs of Delhi settles the issue.
Once quite the bustling shopping square drawing hordes of people, the Sector 18 market in Noida now watches shoppers making a beeline across the street. It has for its immediate neighbour the largest mall in town — The Great India Place (GIP) — casting a halo the market would love to wish away. Since the GIP opened shop, footfall in the market has plummeted by as much as 60 per cent (as estimated by the store owners).
Industry experts feel that while the concerns of decreasing footfall and its effect on sales are here to stay, it is possible to salvage some of the damage because consumption power is on the rise. However, the absence of an active market association, and hence a concerted effort, promises to make the going tough.
Efforts are being made by the individual stores to win back customers by resorting to rebates or increasing the product range. Most of the shops are seen flaunting ‘on sale’ boards more often.
With a store full of shoppers made curious by the ongoing sale, Anand Goel, store manager of Cottons by Century, says that there has been a marked difference since the GIP’s advent, with a 40 per cent decrease in footfall.
To shore up sales, the company plans to step up its advertising and offer swipe cards by tying up with banks to let customers avail of discounts at restaurants, much like the loyalty bonus offered by the anchor stores in malls. Increasing the product range by introducing a women’s line is also on its radar.
Beon, the company outlet for Action shoes (and a part of Action Retail Venture), bang opposite the GIP, has seen sales dip by almost half. Umesh Sharma, the store manager, informs that the company has lined up discount schemes, promotional SMSes (it sends thousands of them), gift coupons and frequent ads in a bid to lift dipping sales. But “the future lies in the malls”, Sharma says.
The management of Home (C&R Textiles Pvt Ltd), a home décor store in the market, is set to introduce promotional schemes, such as bundle offers and free gifts, with purchases. Paul Shoes, a local chain of footwear, with shops at South Extension in New Delhi and the Sector 18 market, found the first couple of months hard with a decline in both footfall and sales. However, according to Sachin Mahajan, the store owner, it didn’t take long for the regular customers to return.
“The smaller shops make you feel at home, while for the stores in a mall or a hypermarket you are just one of the numerous customers,” says an expert. Stores like Vijay Sales in Mumbai, Kurta and Saree Stores in Kolkata or a traditional jewellery store typify the personalised treatment and astute product knowledge that staff of the organised retail stores lack.
But good customer relations and discounts are not proving sufficient for these shopkeepers. The notion that malls are only for window-shopping owing to a steep price range is fast evaporating.
Store managers, such as Ritesh Gupta (at the Levis outlet in the market), are only too aware of the losses as “walk-ins are necessary to convert new customers and expand the customer base”. Gupta has suffered a 30 per cent slump in sales, with a Levis’ store, like most of the brands in the market, present in the GIP as well.
The market’s ambience too doesn’t help, fraught with an open sewerage and roads choking with haphazard traffic that double as pedestrian walkways.
Azam Khan, manager of the United Colours of Benetton store, adds: “The shoddy drainage systems and the nagging power shortages are the biggest problems in this area. We have to pay separately to clean the drains”. Other store owners put the blame of the market’s depleting visitors squarely on the lack of solidarity among the members.
“The Noida Development Authority doesn’t do much either,” adds another store manager. The market has witnessed quite a few attempts at ordering the traffic by the local police but in vain.
It is perhaps the lack of concerted effort that is proving the undoing of the shops in this popular market. An active trader’s association would not only have heard the shop-owners’ grouses about a drab surrounding, but could have drawn strength from numbers.
Caught in the catchment areas of some very large malls (DLF’s Town Square is coming up next door), the Sector 18 market has to think on its toes. Its personalised customer servicing can create a distinct positioning while a concerted effort at consolidating the shops’ supply chains and marketing efforts can provide the proverbial boost.
March 18, 2008
Source: Business Standard
Reliance iStore opens in Hyderabad
Introducing iStore – its latest retail format in Andhra Pradesh, Reliance Retail has announced that the company is planning to open 50-60 such stores across the country in the next 18 months.
Addressing a press conference here on Wednesday, Mr Ajay Baijal, President and Chief Executive (Consumer Durable IT and Telecom), said the company would open 150 Digital format stores in tier-I and II cities.
While iStores would sell the complete range of Apple products, Reliance Digital outlets will sell a wide gamut of electronic consumer goods. Stating that there was a huge demand for Apple products in India, he said there was no outlet for consumers to get access to the complete range. In Andhra Pradesh, iStores would come up at Visakhapatnam and Vijayawada in the next few months.
March 6, 2008
Source: The Hindu Business Line
Retail rentals stabilising after two years
After witnessing an unbridled run for the last two years, retail rentals seem to be holding their breath now.
Rentals for retail stores and showrooms have stabilised across Delhi NCR, Bangalore, Hyderabad and Kolkata, with most markets in these cities witnessing little or no growth in the past six months. The rentals in Mumbai, however, are still roaring with some pockets witnessing an increase of as much as 174% in the past six months.
“Retail rentals had been increasing much faster than the revenue generated from the stores. At such pace, it reached a stage, where revenues stopped supporting the rentals, leading to little or marginal hike for rents,” says Cushman & Wakefield India director (retail services) Rajneesh Mahajan.
Skyrocketing rentals have been a sore point for retailers who have had to restrict their expansion plans and even down shutters at some places due to this. Several retailers have complained that rising rentals was putting pressure on their margins.
In Mumbai, however, the rentals are increasing unabated. The rentals have increased by 111% to Rs 1,350/sq ft in Linking Road and by 174% to Rs 960/sq ft in Colaba Causeway. This is linked to the fact that there is no fresh supply of retail space in Mumbai’s prime locations and some of the new projects are already leased out.
Unlike in Mumbai, Delhi had fresh supply of retail space with the opening of Amby Mall and Select City Walk mall in Saket which helped distribute the demand. Additional retail space also came up in suburbs of Gurgaon and Noida, easing off pressure on existing high streets. In Delhi, Connaught Place and Basant Lok have seen no rise in rentals while GK-I M block market (15%), Khan Market (9%) and South Extension (9%) have seen moderate increase in rentals over the last six months. While rentals in Noida remained stable, it increased by 16% in Gurgaon. The rentals in Gurgaon are Rs 250 per sq ft while in Noida it’s Rs 325 per sq ft.
Similarly, Bangalore, which witnessed over 50% annual growth in rentals over the past two years, seems to be cooling off with no increase in rentals since September ’07. Hyderabad and Kolkata too saw stable rentals during FY ’08. Rentals, however, are rising in Chennai and Ahmedabad with both cities reporting over 10% rise in most pockets in the last six months.
April 3, 2008
Source: Economic Times
Retail media to touch Rs 3.4 billion by 2008-end
Spending on retail media, a new form of advertising medium, has increased from Rs 1.5 billion in 2006 to Rs 2.25 billion in 2007. The relatively new form of advertising medium includes space not only in malls now but also on Store TV, cinema theatres, departmental stores and supermarkets.
"Retail media, a part of the Rs 198 billion media market, has witnessed 300 million spends in supermarkets alone and it will be worth Rs 3.4 billion by the end of this year," said GroupM COO South Asia Vikram Sakhuja.
The advertising fraternity is continuously searching for new avenues and methods to reach out to their target consumers. And now with the retail sector booming in India, advertisers believe that retail media will continue to gain share in the advertising budget.
"Retail Media has developed immensely over the last year as it has moved from just ambient space and activation to In-store TV and more integrated plans. Thus today we can use retail media to reach our consumers with our marketing message exactly at the point of purchase making the consumers aware of the brands," added Vikram.
Retail Media involves 5 to 10 second spots on StoreTV within the retail store, in-store activation, branding through shopping bags wherein a particular logo and name is printed on the bags in which the consumers carry their goods and floor signage.
April 1, 2008
Source: Indiantelevision.com
Future Group, Cisco in tie-up talks for retail RFID project
Kishore Biyani-promoted Future Group, owner of brands such as Pantaloon Retail, Big Bazaar and Food Bazaar, is all set to enter into a tie-up with Cisco Systems, one of the world’s largest networking companies, to implement Radio Frequency Identification (RFID) technology across all its retail formats in India. According to sources, both the companies are in advanced level of talks and an agreement is expected to be reached later next month.
The move is significant considering that this will be the largest RFID implementation mandate in Asia. The investment in the RFID technology, close to Rs 200 crore, will be made through Future Knowledge Services (FKS), another Future Group company which specialises in high-end analytics. According to sources, almost 1 million Stock Keeping Units (SKUs) out of a total of 3 million will be tagged with RFID chips.
Says Future Logistics CEO Anshuman Singh, “We were the first ones to experiment with RFID technology at our Tarapore warehouse four years back and we intend to be the pioneers in its implementation in India.”
Experts believe that this is a strategic move by Future Group and is analogous to Wal-Mart’s shift to RFID technology in 2004. Says GS1 India CEO Ravi Mathur, “The move makes a lot of business sense for a huge retail venture like Future Group and will offer competitive advantage.” GS1 is a global organisation dedicated to the design and implementation of the most widely used global standards and solutions to improve the efficiency and visibility of supply and demand chains.
Future Group can accrue various benefits from RFID technology implementation. Says Mr Mathur, “RFID increases efficiency levels as it offers complete visibility in the supply chain and will be very effective in decision making or dealing with goods that age or perish.”
In fact, once RFID is implemented by Pantaloon Retail, it puts pressure on various suppliers also to switch to the technology. However, experts believe that while this is a tall claim in the present scheme of things, this is the manner in which the market will evolve finally.
March 25, 2008
Source: Economic Times
Sat nav trolley that makes shopping simpler and stress free
Shopping in supermarkets will be a new experience all together with a sat nav new trolley that will make shopping a much easier exercise for shoppers, besides flashing a warning if your groceries have too much fat in them.
The trolleys have been fitted with sat nav, which facilitates an on-board computer that help plan the best route to buy what you want and suggests meal recipes based on it. The trolleys, which are set to slash the time it takes to do shopping, could be introduced in Britain next year.
They use technology from computer giant Microsoft and are the brainchild of Texas-based firm MediaCart.
Customers can insert a supermarket loyalty card containing details of their previous shopping lists. The location of each item on a list is then shown on a 12-inch screen at the end of the trolley.
If you need something not on the list you can ask the machine. Voice-recognition software processes the request and shows where the item is. And if it is stolen from the supermarket it has the technology to "phone home" with its location so it can be collected.
March 15, 2008
Source: Economic Times
Reliance plans flexi finance service at retail outlets
After rolling out 11 formats ranging from footwear to jewels, Reliance Retail now plans to offer flexible financing options for its customers.The retail arm of corporate major Reliance Industries plans to launch MFT or Membership Financial Services and Travel at all its formats.
“The idea is to offer flexible payment options to our customers visiting a variety of our retail stores. This will help the customers to distribute the financial burden over a period of time and pay through EMIs (equated monthly instalments),” a Reliance Retail executive told Business Line.
Initially, employees of Reliance Industries would be offered this service. It is likely to be extended to select customers before being offered to all customers subsequently.
MFT staff will explain the features of the financial assistance to customers at the various retail formats, the executive said.
March 10, 2008
Source: Hindu Business Line
Space crunch, high rentals a dampener for luxury retailers
Luxury retailers are in a Catch-22 situation when it comes to their expansions plans for India. The $3.5-billion luxury goods market in India is on an exponential growth but the surging rentals and quality-space crunch are dampening aggressive roll-out plans.
“Luxury is not just about selling an emotion but also delivering an experience. Therefore, getting the space right is critical,” Mr Erico Marinelli, CEO, Frette, a luxury home furnishing company, told Business Line.
Noting that the five-star route is not always financially viable, he said, “Our international experience has been that a luxury store should give sales of $12-18 per square feet. However, it may or may not be true of India”.More than 200 international luxury brands are making inroads into India.
The 2007 Asia Pacific Wealth Report, released by Merrill Lynch and Capgemini, says that India has recorded the world’s second fastest growth in the number of high net-worth individuals (HNIs) at 20.5 per cent, making it a lucrative luxury market.
“On an average, the space requirement for luxury brands is higher (2,000-3,000 square feet) and only a handful of places fit the bill,” said Mr Rajneesh Mahajan, Director (Retail), Cushman & Wakefield India.
Says Mr Mark Lee, CEO, Gucci, “India will emerge as one of our key markets. However, today it is still in a state of fantasy.” Currently, Gucci has two stores here and plans two more this year. However, he added that infrastructure remains a constraint. Unlike China, where Gucci opens one store every six weeks, the company is far more cautious here.
Echoing a similar view is Mr Paolo Canali, Sales and Marketing Director, Canali. “We want to set up eight boutiques by 2010. However, we may slow down our expansion if the right ambience is not available,”
Real estate company DLF’s Emporio in New Delhi is slated to be launched mid this year. “We are clinching good rentals. This will be the first-of-its-kind luxury mall and will have leading global brands,” a DLF spokesperson said.
Mr Leonardo Ferragamo, Chairman, Altagamma, the association of Italian luxury goods manufacturers, said, “Partnering with real estate companies and acting as their anchor tenants will solve some of the problems”.
April 1, 2008
Source: Hindu Business Line
Armani heads east as India's rich keep spending
Giorgio Armani is to become the latest of a horde of high-end brands to target India’s growing appetite for luxury goods.
The Italian group will take a 51 per cent stake in a joint venture with DLF, the Indian property developer – the biggest presence it is allowed in the country under regulations.
The first Armani outlet will be opened at a new “super luxury mall” being built by DLF, which also has a partnership with Dolce & Gabbana, in New Delhi. By the end of the year, Armani expects to have around five stores across the subcontinent.
March 31, 2008
Source: Times Online
'Develop the market, we’ll be in'
Iconic luxury brands Gucci, Missoni and others think alike about India. It’s a huge market that needs to be stitched together — step-by-step.
“You have immense potential, Indian customers have very sophisticated taste and you need to build the market step by step, and develop India as a key market for the world,” Gucci CEO Mark Lee said at the third annual edition of the Mint Hindustan Times Luxury Conference.
Gucci, the $2-bn Italian fashion giant, wants to harness India as its new playing field. It already has two stores here — in Delhi and Mumbai — and plans to open two more by the end of this year. According to him, India needs to develop its retail sector as it is the only way for the market to grow.
For Carlo Rivetti, chairman of Sportswear Company, “India is an unknown jewel and a big and enormous market”. However, he feels India should “find the Indian way of luxury”, and then call people from outside to fill in the space.
Vittori Missoni, chairman of Missoni, who wants to develop “Missoni saris” one day, is enamoured by the colours of India. Missoni is not very impressed with the new generation of ‘wannabe’ designers. “They don’t want to cut and stitch but they want to be designers. Look at Tommy Hilfiger or Gucci, they first learned how to cut and stitch and took to designing.”
March 30, 2008
Source: Hindustan Times
Italian luxury brands Canali, Brioni plan India expansion
With the Indian luxury market set to touch $30 billion by 2015, Italy's premium menswear brands Brioni and Canali are firming up plans to strengthen their presence in the country.
Brioni, which opened its first boutique store in Mumbai last year in partnership with its franchisee Badasaab Designs, is all set to launch two new stores this year. Similarly, Canali, which currently has two franchise outlets with Genesis Colours, plans to have eight by 2010.
"We feel that the Indian market is more mature than other Asian markets and that is why we want to expand operations here. Our second store will open shortly in Delhi, while the third one will come up by this year-end in Bangalore," Brioni CEO Andrea Perrone said on the sidelines of the Mint-Hindustan Times Luxury Conference. The company expects to start making profits from its Indian operations from next year.
Echoing similar sentiments, Canali Sales and Marketing Director Paolo Canali said, "By 2008-end, we will have five stores with two coming up in Delhi and Bangalore within six months, eventually going up to eight by 2010."
He said the company might also look at sourcing fabrics and natural fibres from India. However, the Italian majors feel that availability of quality locations for luxury retailing was an issue. "We are finding it difficult to find the right kind of space and location to execute the plans," Brioni CEO Perrone said.
Expressing similar views, Paolo Canali also said that the company's expansion plans in India would depend on getting ideal locations.
March 28, 2008
Source: Economic Times
Retail industry all game for a revolution
The $12 billion Indian retail industry is all set to witness a revolution of branded exclusive gamestop zones in the cybercafe format in the next two to three years, according to console gaming majors.
The move will come in the wake of the drastic shift in consumers’ perception in experiencing console gaming products apart from buying products from modern retail formats instead of buying the products from the grey market. Besides, Indian console gaming market could see emerging trends in sync with the global trend such as party gaming and child gaming as well. While in the UK, Playstation II gaming series market has achieved a saturation level due to 75% penetration, Playstation III gaming series trend is shifting to emerging Markets such as India and Russia.
March 28, 2008
Source: Financial Express
Ferragamo plans venture with DLF for single brand retailing
Italian luxury apparel and footwear brand Salvatore Ferragamo SpA is in the process of entering into a 49:51 joint venture with real estate major DLF to set its foot in the Indian soil.
The company, which at present, has one premium outlet in India (through a distribution arrangement) is planning to scale it up to five by the end of 2008-09.
“The joint venture will help us explore the possibility of our brand in India. We have a history of working for the Indian royalty and the elite for a long time. However, this venture will help us establish the brand here,” Mr Leonardo Ferragamo, CEO, Salvatore Ferragamo SpA, told Business Line.
Ferragamo’s collection includes men’s shoes, accessories, scarves, ties, eyewear, watches, fragrances, ready-to-wear and handbags.
March 27, 2008
Source: Moneycontrol
Prateek looks at beefing up retail presence
Apparel manufacturer Prateek Group is looking to beef up retail presence of KANZ (a children’s wear brand) stores and ‘Coupon’ malls across the country.
Prateek forayed into retail last year through a subsidiary, Prateek Lifestyle, to set up ‘Coupon’ malls, which retail apparel brands at discounted prices, in Bangalore and Raipur. Plans are on to add 12 malls this fiscal year in cities and towns such as Hyderabad, Kozhikode , Gaziabad, Faridabad and Kolkata.
The company is also in the process of launching a slew of private labels at Coupon mall. Coupon already sells private labels from Prateek in the men’s and women’s wear categories. Other categories will be launched in time, says Mr Pradeep Agarwal, Managing Director, Prateek Group.
Prateek also has a presence in kidswear with a joint venture with KANZ of Germany. Currently, there are 13 KANZ exclusive brand outlets (EBOs) in the country in cities such as Bangalore, Delhi, Mumbai, Kolkata and Ludhiana, apart from being present in multi-brand departmental stores such as Central, Lifestyle and Shoppers’ Stop.
“We hope to add 28 EBOs in the current financial year (2008-09). We will also increase KANZ presence in multi-brand stores,” says Mr Agarwal.
April 4, 2008
Source: Hindu Business Line
Vimal to Offer Ready to Wear Apparel for Men
Vimal, the flagship textile brand of Reliance Industries Limited, opened its first exclusive retail store at MG Road in Cochin today.
The redesigned Vimal showrooms reflect the bold new spirit of Vimal, along with its brand new identity. An international retail design and architecture expert was involved in this redesign of the Vimal exclusive showrooms to ensure that the showrooms were designed on the lines of international retail centres in a modern, trendy and contemporary way.
These Vimal showrooms will now offer not just the latest fabric collections for premium menswear, but also the Vimal range of men's apparel – shirts, trousers, suits and jackets. This apparel would be available under three sub-brands, which will appeal to different sections of the male audience, viz Vimal Red, Vimal White and Vimal Black.
In October after the re-launch of its iconic textile brand, Vimal with a new look, new logo and new offerings, four showrooms were opened in Ahmedabad, Bangalore, Mumbai, Chennai and will open one more showroom this month in Bangalore. In phase two starting in the next financial year Vimal will launch another 18 Stores.
March 30, 2008
Source: BharatTextile.com
The urban cowboy has now joined the green bandwagon. Wrangler for the first time in India has taken a ‘green’ step forward, doing its bit for a better tomorrow with the launch of ‘Naturally’, a range of organic clothing.
“Organic clothing, new to India, is already catching in the Western world with brands such as Nudie Jeans, Loomstate, Levi’s Eco, 7foralmankind and Sling and Stones,” says Anshul Chaturvedi, Marketing Manager. Wrangler is well known for roping in leading designers such as Prasad Bidapa and Rajesh Pratap Singh for its denim ventures. “This time, they’ve chosen Salli Deighton, a designer based in London, to work on the Naturally campaign,” he adds.
So, what exactly does Naturally have in its wardrobe? The collection has a wide palette for top wear for men this season – in fabrics like linen, viscose and bamboo blends. Echoing the Naturally theme, there’s a line of denims in fabrics such as natural indigo and organic cotton. The girls’ top wear too ranges from the classic shirts to more feminine ones such as empire line cuts, halter necks and strappy tops.
Starting off as a Rs 3-crore brand, Wrangler has been steadily growing 40-50 per cent year on year. Wrangler is well known for exploring non-traditional media for its marketing. Just like the ‘Truly Clean Jeans’ campaign, once again it will opt for a 360-degree campaign with a multimedia approach with stress on newer media. In a characteristic style of Wrangler, the marketing strategy would lay emphasis on below the line activities, with nearly 15 per cent of its marketing spend credited to it.
March 18, 2008
Source: Hindu Business Line
Dabur's H&B heads South: launches 2 outlets at Hyderabad airport
H&B Stores, Dabur India's retail arm has ventures into South India by launching two beauty, health and wellness retail stores under its brand name 'newu', at the Rajiv Gandhi International Airport, Shamshabad.
The two 'newu' outlets will give air travellers a variety of international and national beauty and health brands, across categories like personal care, baby care, fashion accessories and male grooming.
According to Baker, newu will continue to aggressively expand its presence in the organised retail market, though an increased presence in high streets as well as quality malls. In months to come, new 'newu' stores would be launched in Delhi and the national capital region (NCR), where it had launched its first store, besides entering new markets such as Bangalore, Chandigarh and Ludhiana. By the end of 2008-09 fiscal, 'newu' would have around 20 stores.
April 8, 2008
Source: Economic Times
Dabur enters retail space with flagship store ‘newu’
Dabur India has rolled out its maiden retail venture ‘newu’, which is its wholly owned subsidiary. It plans to add 30 ‘newu’ stores by 2008-9.
The flagship health and beauty store in Rajouri Garden offers customers leading international and national beauty and health brands. The core categories are complemented with pharmacy, personal care, babycare, fashion accessories and male grooming.
The 4,500 sq. ft store is being pegged as a one-stop destination for all beauty, health and wellness needs. It has merchandising of over 13,000 SKUs. In addition, ‘newu’ stores will introduce exclusively to the Indian market several leading international cosmetics and personal care brands.
Speaking at the launch, Chief Executive Officer, Mr Peter Baker, said, “This store will offer easy access to the latest and the best products from the world of beauty, health and wellness.”
The ‘newu’ brand image presents a new dimension to lifestyle branded retail in India, designed by Pikefell, UK-based brand agency. It may be recalled that Dabur had earlier earmarked Rs 140 crore towards its retail venture.
The company is planning to rapidly expand its presence in the organised retail market throughout India. “In the coming months, in addition to further stores in Delhi/NCR, we will open stores in Hyderabad, Bangalore, Chandigarh and Ludhiana and growing the ‘newu’ presence to about 30 stores by the end of the 2008-09 fiscal,” Mr Baker said.
March 14, 2008
Source: The Hindu Business Line
A rich harvest from Kisaan Bazaars
Organised retail might be faltering in urban India, but is booming in rural India, going by the experience of DCM Shriram Consolidated Ltd’s Hariyali Kisaan Bazaar (HKB). Aimed exclusively at rural India, the company has seen sales from its 160 stores more than double in the last couple of years.
Average sales at an HKB store have gone up to Rs 5 lakh a day during the harvest seasons, while it is around a tenth of that during the lean season. That means the turnover of a single HBK store is over Rs 6 crore, annually, while the investment cost varies between Rs 2 crore and Rs 3 crore.
The growing popularity of HKB stores has also prompted banks and insurance Companies to look at possible tie-ups to tap the rural customer. ICICI Lombard and HDFC Bank have already tied up with HKB for their products. Though he furnished few details, Ajay S Shriram, chairman & senior managing director, DCM Shriram Consolidated, said, “Banks and insurance Companies get a ready customer base on a platter.”
Shriram said HKB’s retail model was developed exclusively for rural customers. “We have no intentions to bring it to urban areas; it has been designed for rural customers,” he said, adding that retail in rural India is commercially viable.
HKB not only sells products relating to agriculture like fertilisers and seeds, but also household items as 40% of rural India comprises those that are not engaged in farming, Shriram pointed out. The success of HKB has also encouraged the company to launch pulses and masalas under its own Hariyali brand.
April 6, 2008
Source: Financial Express
Biyani to buy 70% in Godrej Aadhaar
Kishore Biyani-led Future Group is picking up a 70% stake in Aadhaar, Godrej Group’s rural retailing initiative. Sources said Aadhaar, a part of Godrej Agrovet, will be spun off into a special purpose vehicle. Godrej Group will hold a 30% stake in the entity.
The deal, likely to be done through Pantaloon Retail, is likely to be sealed in a fortnight. The Future Group will initially scale up Aadhaar on the lines of ITC’s e-choupal, as a supply-chain of commodities and agri-produce. Aadhaar may also become a distributor of the group’s financial products like consumer finance and insurance in the rural markets.
Sources said the move makes sense for the Godrej Group which may not have been able to allocate the kind of investment required to make the rural retailing business commercially viable. For the Future Group, the move dovetails with its ambitious rural retailing plans.
March 18, 2008
Source: Economic Times
Future Group to expand business in rural markets
Kishore Biyani-led Pantaloon Retail, which operates a number of retail format primarily catering to the urban India, is looking at expanding in the rural markets to enhance its presence. "We are looking at rural markets as well," Future Group CEO Kishore Biyani said.
Asked whether the company would mark its foray into the rural markets independently or in partnership, Biyani said, "There are various options which are being looked at currently."
With its latest plans to focus on the rural side, the Future Group looks set to join the bandwagon along with another major business conglomerate--the ITC Group. ITC also has a considerable presence in the country's rural side with its e-choupal retail initiative, which is basically aimed at providing a support system to the farmers.
March 18, 2008
Source: Economic Times
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