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 February 2009Big players – Plans and InvestmentsReliance exits cash & carry biz General Trends & InformationRetail majors' sales decline Pharma RetailGuardian Lifecare spreads reach, plans 50 stores by March Lifestyle & Luxury RetailingSales in home segment picking up: Biyani
Big players – Plans and InvestmentsReliance exits cash & carry biz Reliance Retail has dumped its cash & carry business, or wholesale trading plans, with the entire operational management headed for an exit. The move to defer cash & carry operations, at least for the time being, is part of the firm’s strategy to conserve cash in a deteriorating market, company sources said. India’s cash & carry market has attracted global retail behemoths such as Wal-Mart, Tesco and Metro. The global giants see it as an opportunity to enter India where FDI is barred in direct-to-consumer retail. Multiple sources said the 36-member cash & carry team headed by Harsh Bahadur was on the way out after the firm decided not to proceed with the business plan. Mr Bahadur had joined Reliance in 2007 after spearheading German giant Metro’s cash & carry foray into India for five years. An email to Reliance remained unanswered at the time of going to press. After talking to potential international partners, Reliance Retail decided to foray into cash & carry trading on its own with 15 locations, mostly tier-II centres like Jalandhar, Ludhiana, Rajkot and Salem, identified as initial destinations for the venture. It is believed that Reliance Retail has decided against burning cash on new business initiatives, especially on those projects where the firm is on its own. As mentioned already, Reliance wanted to go solo into cash & carry given the fact that foreign partnerships would have restricted its consumer base. Meanwhile, cash & carry has also become a politically sensitive matter with India’s traditionally powerful trading intermediaries resisting entry of organised players into wholesale business. They have opposed amendments to APMC Act, which is required to allow foreign players to deal in cash & carry of agricultural produce. February 2, 2009 Subhiksha battling for survival, may shut half its stores Neighbourhood retailer Subhiksha is closing a significant number of its 1,600 stores across the country to cope with a cash crunch that has held up store rent and salary cheques, but says it would survive the crisis. The exact number of stores being closed couldn’t be ascertained. People with access to the top management said it could be as much as half. Subhiksha confirms that 8-10% of its stores may be closed. The 11-year old retailer, promoted by Chennai-based R Subramaniam and partly-owned by software major Wipro’s promoter Azim Premji, acknowledges that it is currently battling for survival. “We mucked up ourselves. We have no reason to blame demand or consumers or markets (the product markets),” said Subhiksha in an email to ET. “We are in pain but we are not shutting down,” it added. Giving reasons for the shortage of funds, Subhiksha said it overreached itself. “Expansion without support of equity was the pain, and not stopping expansion when bank money was getting delayed was also a problem,” it said. With little cash left in its kitty, Subhiksha now has its back against the wall. “The company is fast shutting stores as it is unable to pay rentals or employee salaries. Moreover, it has hardly any supplies in most stores,” said a key industry executive, who has access to top management at Subhiksha. One reason for shutting stores is that Subhiksha wishes to lower its rent bill. “We are in the process of relocating 8-10% of our stores nationally to take advantage of falling rentals across the country, specifically in key metro cities. We are implementing a SAP supply-chain solution to streamline operations and this could temporarily affect store operations,” it said. Till recently, Subhiksha was a poster boy for India’s fledgling retail industry and expanding aggressively. The company’s turnover went up seven times in two years, from Rs 330 crore in 2005-06 to Rs 2,305 crore in 2007-08. Then it went into a tailspin. “We had expanded rapidly. Most of the growth was debt-led. We had built on a tiny equity base of just Rs 32 crore, and even including share premiums, the company had raised only a total of Rs 180 crore as shareholder funds,” the company added. Subhiksha employees, current and former, contacted by ET said the company hasn’t paid salaries or rentals since October 2008. There has been a flight of key executives, including Delhi market head Ashu Phake and Atul Joshi, who was leading the company’s proposed consumer durables chain. Subhiksha said the delay in salary payment to 15,000 employees was inevitable. “There are arrears on these, not because we do not want to pay, but because we can’t pay,” the company said. Suppliers have been equally upset by the retailer’s payment track record. Subhiksha’s fruit and vegetable vendors stopped supplies after the retailer failed to pay them. Soon, food, personal care and other FMCG products also started disappearing from Subhiksha’s shelves. Explaining why the crisis began in the summer of 2008, the company said: “We could not trade as we ran out of cash. When we could not pay for fresh buying, the trade cycle collapsed in October and that is what brought us to a standstill.” The promoters have been trying to raise Rs 300 crore, needed to bring the company back on its feet. They held negotiations with at least two retail chains for selling equity, but no deal has happened so far. Last year, Wipro promoter Azim Premji bought 10% stake in Subhiksha for Rs 230 crore from ICICI Venture. The promoters currently hold 59% in the company. January 30, 2009 UK retail major Argos to pull out of India Catalogue retail major Argos is winding up its two-year trial operations in India that include five stores in Mumbai and a telephone and internet ordering service. The Home Retail Group, which owns Argos, announced that it had completed a review of its India presence and had decided not to continue. It operates the telephone and internet ordering service in conjunction with HyperCity, its Indian retail partner. The company had signed a franchising agreement with two of India's leading retailers, Shopper's Stop and Hypercity Retail India - to develop the Argos retail format in India. It said the decision to stop the trial was made "mutually" by the group and its two Indian partners in the venture. "A decision to discontinue the trial following the initial two year development period has been taken mutually by Home Retail Group [and partners] Shoppers' Stop and HyperCity. The trial had not met the planned performance levels to support the investment required in the current Indian economic climate," the company said. "At some point in the future, the Indian retail market may still present an attractive long term growth opportunity for the Argos multichannel model," said the company. The joint venture, unveiled in 2007, was to use the Argos brand and product catalogue under the "Hypercity-Argos" name in stores initially based in the Mumbai region. The business was based on the Argos multi-channel format, combining stores with catalogues, internet and telephone ordering, and home delivery. January 29, 2009 Carrefour may hook up with Biyani Future group, India’s largest retailer and owner of the Big Bazaar supermarket chain, is in advanced talks with Europe’s largest retailer Carrefour for a joint venture to set up cash-and-carry outlets in India. A deal could help the French group finally realise its long-held dream of entering the country’s fledgling retail sector, three people with knowledge of the discussions said. If successful, the discussions could result in a joint venture between Carrefour Wholesale Cash & Carry India and Big Bazaar, much like the tie-ups between the Bharti group and Wal-Mart & the Tatas and UK’s Tesco. The talks centre around creating an entity that will serve as a major supply-chain entity for all Future group store formats and enable the Indian company to significantly cut costs. There are several cultural similarities between the two groups that could facilitate a successful partnership, one person familiar with the talks told ET. Carrefour, which has in the past tried to partner with other Indian groups to set up shop here, initiated discussions for a partnership with Future group’s founder & CEO and organised retailing pioneer Kishore Biyani, who has made no secret of his desire to look at various options to grow his business. The two sides are considering various partnership options, including an equity deal and a franchise model. Both parties are expected to hold another round of talks sometime during the next few days. ET had reported about Mr Biyani’s plans to create a large back-end entity with support from a major global retailer. January 28, 2009 Spencer's Retail not to hold back expansion plan RPG Enterprises' retail arm Spencer's Retail is continuing with its Rs 1,500 crore expansion plan, envisaged for the next two years, despite the economic slowdown. The company, which said it planned to open 400 new stores in the next two years, is eyeing Rs 1,250 crore sales turnover by the end of the current financial year. “We are continuing to expand (our business) with more and more stores, including hypermarkets. We will open as many stores as necessary and wherever they are required. Our expansion will continue,” Spencer's Retail President, Mr Vineet Kapila said. Last November, Spencer's Retail announced Rs 1,500-crore expansion to add 400 more stores by the end of 2009-10 fiscal. It was planning to set up stores across the country, including Tier II and III cities. The company has currently 350 stores across India, including 34 large format hypermarkets. Stating that current economic slowdown has not affected the company's operations as it deals with mostly essential items, he said: “Our main items of retailing ar e FMCGs, fruits and vegetables.” Asked about the company's profit margin, Mr Kapila said: “The profit margin is not very big but the retail business is more about managing costs. We have been successfully managing our costs.” The company said in the last financial year, Spencer's increased its stores from 150 to 350 with a target of expanding by 400 more in the next two years and is targeting Rs 1,250 crore sales turnover by the end of the current financial year. January 25, 2009 Big Bazaar, hypermarket chain and a part of the Future Group, is conducting its biggest shopping event, ‘Sabse saste 3 din’ (lowest price for three days). The offer would be available across 106 Big Bazaar stores from January 24 to 26. Apart from the flagship Big Bazaar and Food Bazaar stores, other future group retail formats such as Furniture Bazaar, Electronic Bazaar, Depot and Home Bazaar would also be part of the campaign, according to Noor Alam Ansari, Area Manager, Operations, Pantaloon Retail (India) Ltd. For the net savvy consumers, the company would extend the campaign on to its e-retailing website www.futurebazaar.com. For those who are not net savvy and also did not want to wait in queues, Futurebazaar.com would set up exclusive kiosks outside Bigbazaar stores in important cities such as Chennai, Delhi, Lucknow, Mumbai and Thiruvananthapuram, where consumers can select what they want from the catalogue, pay there and get it all delivered at home. January 23, 2009 M&M to drive speciality retailing biz via global brands Mahindra & Mahindra has decided to launch its own private label brands at its newly launched Mom & Me stores. It would also be bringing in a host of international brands in infant care and maternity products. With an investment between Rs 75 crore and Rs 100 crore, Mom & Me has two outlets in Ludhiana and Ahmedabad. But the next few launches would be in metros such as Delhi, Mumbai and Bangalore. According to Mr K. Venkatraman, Managing Director, Mahindra Retail, “The stores will have a carefully selected portfolio of product categories that are relevant to -9 months to +9 years of motherhood and childhood, including maternity wear (a new category for India). It would have fashion apparel for babies, toddlers and young kids, toys and games, wellness products for mothers and babies, nursery and furnishings, travel and safety, personal products, foods and so on. The products would be a mix of international and Indian brands, as well as a significant contribution from our own private labels.” With a line-up of exclusive international brands at Mom & Me stores, M&M would be leveraging its strength in the trading business (through Mahindra Intertrade), whereby it has already forged a couple of distribution tie ups. Motherswork, a $600-million US retail brand, will be exclusively available for maternity wear at Mom & Me stores. Other exclusive international brands would include Startrite of the UK, Brainy Baby of the US, Mary Meyer of the US, CAM from Italy, Evenflo from the US, and Avado from Australia. More international brands such as Graco, Mattel, Bloombaby and Dreambaby would also be available in exclusive ranges. There will be an exclusive private label range sourced from India, China, Thailand and other countries for furniture, toys, baby apparel and kids’ fashion. Mr Venkatraman said, “The Mahindra Group has established a presence in the kids and soft toys segments for several years through its trading and distribution activities. Consequent to intensive and diligent market research over a period of time, and in collaboration with leading retail consultants, Technopak Advisors, the company has identified the concept which offers significant growth opportunities. The group believes this is the right time, when the organised retail market is expanding in India, to extend its existing distribution business in toys and apparel into direct retailing. No direct synergy exists with Shubhlabh for now.” However, it would be using the services of its other group companies in the retail business. “We have already integrated our existing trading business related to kids and soft toys into this new retail venture. We expect to be leveraging group synergies with respect to our logistics, financing, trading, IT and real estate requirements through various group companies,” added Mr Venkatraman. January 22, 2009 Spar, Spencer’s Retail to expand thru large format stores Food retailers Spar (from the Dubai-based Landmark Group) and Spencer’s Retail will continue to expand in large format stores in the next two years. Citing two reasons for large format expansion, Mr Samar Singh Sheikhawat, Vice-President (Marketing), Spencer’s Retail Ltd, said that empirically the format had given them higher turnovers and the entire range and assortment of products across all categories of food, fashion, home and entertainment finds space only in a large store which is typically more than 25,000 sq. ft. Industry sources, however, pointed out that with a 20-30 per cent decline in rentals across Tier-I and some Tier-II cities, these retail chains would prefer to stick to their original plans of expansion through large format stores. Spar, which currently has three hypermarkets (two in Bangalore and one in Hyderabad), is planning to expand only through this format. Mr Viney Singh, Managing Director, Max Hypermarket India, which owns the Spar brand, pointed out that this format alone could offer customer-centric experience. “Even our supermarkets in other parts of the globe are around 30,000 sq. ft. Any space less than this cannot deliver service and range, which we promise along with value and freshness.” While Mr Singh said that Max had not revised its expansion plans even in the face of a recessionary economy, Spencer’s Retail has scaled down its store growth plans from an intended 2,000-3,000 across all formats by 2011 to 750 stores in two years with an investment of about Rs 2,000 crore. The group currently has 32 large format stores and is working on growing this number to 45 by March. Max plans to have 9-10 stores by end of this financial year and is “confident of meeting the plans”. January 17, 2009 Megamart scales down expansion plans Expansion plans for Arvind Brands-owned Megamart may get scaled down in the next two to three years. The discount store chain, which had drawn up plans to have 30 large stores by 2010, may revise the plan to open only 20-22 stores in the next three years. Last year, Arvind Brands had announced its intention to pump in around Rs 400 crore into the retail venture, out of which the company has already invested about Rs 250 crore. The plan was to bring in this investment in about four years, but this may get extended to five years, according to Mr Venkatachalapathy. Citing delayed project completion by real estate players as a reason for their growth plans slowing down, Mr Suresh, however, expects no problem or any kind of adverse impact till March. “Post-March, we have to be watchful. One is not able to clearly predict what is going to happen.” Expansion plans of small format stores would, however, remain intact with the discount retail chain announcing plans to open 25 small-format Megamart stores in the first quarter next year (average size of 2,500-5,000 sq ft). Currently, there are 125 small format stores. Mr Venkatachalapathy said that the company has become choosy about identifying property for its expansion. Although rentals are fairly attractive now (real estate rentals have dropped from 10 per cent in some places to even 70 per cent in others), they are still not viable, said Mr Suresh. January 14, 2009 Dabur changes strategy for retail venture Having curtailed expansion plans of its retail venture, Dabur India's wholly-owned retail subsidiary H&B Stores now plans to set up smaller format stores with revised targets. The company announced the opening of its latest store on Monday in New Delhi. Though the positioning of the outlet is the same as before – focusing on beauty, health and wellness products – it is of smaller format of about 800 sq ft. The company said in a statement that this outlet marks the introduction of branded private labels, beginning with baby care products. The company proposes to set up 12-15 additional stores to its Newu network by the end of the 2009-10 fiscal. "The newu brand hopes to set new standards of customer focus and service," Newu head (North) Manish V Asthana said. As of now, eight Newu outlets are operational across the country. The company had initially planned to set up large format stores of 1,500-6,000 sq ft. But as part of the revised plan, most upcoming outlets will be in the range of 700-1,200 sq ft. Initial plans also included setting up 350 health and beauty stores on an investment of Rs 140 crore by 2010. January 12, 2009 Dabur resumes expansion, opens its latest store FMCG major Dabur India said it has opened its latest 'Newu' retail store in the capital on Monday, as it resumes its expansion plans after holding back for few months due to high retail rentals. The company said it is planning to add another 12-15 stores by the end of the next fiscal. "The latest 'Newu' store is around 800 sq ft and will retail a wide selection of Indian and International beauty and personal care brands under one roof," the company said in a statement. Dabur has scaled down the size of the stores to 700-1,200 sq ft from its originally planned size of 1,500-6,000 sq ft and has also removed its pharmacy section in the outlet. Besides, Dabur has entered into an agreement with Moda of Turkey and QVS of Australia, under which the two companies would sell their products through the new stores. Earlier, Dabur had announced plans for investing Rs 140 crore (Rs 1.4 billion) over the next five years in setting up 350 beauty and health segment outlets 'Newu'. January 12, 2009 Future Group’s shopping fest to cross sales turnover target The Great Indian Shopping Festival, the Future Group’s shopping event across its six large formats and 12 other formats selling over 1,000 brands, will cross the targeted Rs 700 crore sales turnover. The three-week shopping event, launched on December 13, 2008 has been extended by another week, according to Mr Sandeep Tarkas, President, Customer Strategy, Future Group. The retail chain had expected around 2 crore walk-ins during the period. The company expects an increase of 15-20 per cent in its weekly sales during the extended campaign period taking the total sales at the end of shopping event to around Rs 900 crore, Mr Tarkas told Business Line. Except food items, which are not high consumption products during the second or the third weeks of the month, sales across all product categories jumped by 20 per cent he said. The Great Indian Shopping Festival was launched to spur consumption among Indian shoppers. “The markets and the spirits were down after Diwali and this came as a mood lifter,” said Mr Tarkas. He said it also helped that government and PSU employees received their arrears during the period, which in turn gave a boost to consumption. The company plans to make the shopping event an annual event hereafter, he added. January 6, 2009 General Trends & InformationSame-store sales at some of India’s biggest retail groups have slipped into negative territory for the first time in six years, forcing the fledgling organised retail sector used to heady growth rates of 35-40% to re-orient strategies to ride out the economic slowdown that is pinching customers’ wallets. Future Group, the country’s largest retailer and the company behind brands such as Big Bazaar and Food Bazaar, reported a 9% year-on-year decline in its same-store sales for last quarter of 2008 against a 9% growth in the year-earlier period. Shopper’s Stop has reported a 3% decline for the October-December quarter against a 7% rise in the preceding quarter. Similarly Vishal Retail, one of India’s top five retail groups, reported a decline in its sales growth for the quarter to December 08, which accompanied a decline in customers visiting its stores. This is alarming as the last quarter of the year is a festive season and traditionally a very busy period for retailers. “The coming four quarters will be quite challenging for retailers and some recovery can only be seen in the next festive season,” said B S Nagesh, CEO and customer care associate of Shoppers Stop. Same-store or like-for-like sales are sales generated by stores that have been open for a year and provide a more accurate picture of performance trends in the retail sector, unlike total sales which can be flattered by new store openings. Same-store sales are crucial since older stores bring in most of the business until the newer stores consolidate their position in new markets. With the economic slowdown forcing customers to tighten their belts as the growth euphoria of the past five years fades, industry experts say retailers face increasing cannibalisation risks as several players vie to attract the same customer. Retailers are trying to encourage customer traffic to stores—known as footfall in industry parlance—by cutting prices and offering attractive discounts and as Big Bazaar, Food Bazaar, D’Mart, Spencers are recording more footfall than lifestyle stores, as consumers try to stretch their buying power. This has led to many retail groups pushing the expansion of value store formats as they gear up for the challenging times ahead. Retailers say consumers have been increasingly putting off purchases of big-ticket and lifestyle items like durables, apparel, mobiles and accessories in recent times, to announce pre-season discounts and price cuts. Industry watchers say some retailers had priced some kind of discretionary products like apparel too high and are now being forced to initiate corrective measures. “Consumers are currently sitting on the fence and the challenge for retailers will be to offer the right baits to get them back to stores. Retailers have to focus on growing profits through sales growth and not mere cost-cutting strategies There will be a sharp cut in overall sales growth this year, but a marked improvement in bottomlines with players focusing on efficiencies,” said Kishore Biyani, CEO of Future Group. Retailers across the board are shutting down unviable store formats and relocating stores to stem losses and tackle operational costs. This is part of the first round of India’s $ 350 billion retail industry. Losses from grocery formats hit the bottomlines of retailers such as Reliance Fresh, More, India Bulls, Spencers and Subhiksha, forcing them to shut down unviable ones and go slow on expansions.. Most of them are now renegotiating rentals with developers, which in turn have begun paring down rates by around 25-50%. “Apart from the fact that consumers are postponing purchases, the drop in growth is also due to corrective measures by retailers which focused more on expansion rather than driving consumption,” said Gibson Vedhamani, president of the Retailers Association of India. January 30, 2009 Priya Ahuja, a housewife who used to buy fruits, vegetables and grocery from a Reliance Fresh outlet that opened a year ago in her locality, has now stopped visiting the store. “Initially, most of the people in our locality were fond of visiting clean and organised shops to buy food and grocery. But then, we realised that buying from the street vendor was much more cheaper and convenient than going to Reliance Fresh,” she said. The charm of organised retail seems to be fading among the consumers as they find kirana stores and street vendors offering them better deals in terms of credit as well as free home delivery services, thus saving on time and petrol used for travel. Organised retailers such as Reliance Fresh, Subhiksha, Spencer’s and Sabka Bazar cannot match these facilities that gives a consumer cushion during a slowdown. Shopping in an air conditioned store was like a new experience for most middle- and lower-middle class people. After the initial novelty, people have started comparing the benefits offered by kirana and organised stores. “When Sabka Bazar had opened in our area, we had lost a substantial number of our customers for the first six months, but now most of them have come back as we offer better pricing on branded products, one month credit and free home delivery to our consumers,” said Dipin Khurana, who runs a Kirana store in Kalkaji, Delhi. The Indian retail sector is pegged at $370 billion, of which organised retail accounts for $16 billion. Organised retail has witnessed a decline in growth from 25-30 per cent in 2007 to 15 per cent in 2008. Lured by the potential, retailers rushed into expanding their business without a differentiating model, analysts said. Most retailers relied on price discounts, which were mostly on their private labels, to attract customers. But, they failed to make a mark on the consumer’s psyche. “A consumer wants to buy what he sees in the advertisement. The discounts offered on private lables by retailers have failed to attract the customers,” said Purnendu Kumar, associate vice president, Technopak. Organised retailers promote bulk buying by consumers in order to get maximum discount on deals. However, due to losses and salaries cut, people are not interested in buying extra to get discounts. “I used to buy everything extra to benefit from discounts offered by Sabka Bazar. But now I buy only the required quantity as we want to be prepared for any tough time ahead,” said Deepshikha Ujjwal, who has now buys from a kirana store located in front of her home. Down trading by customers has not helped value retailers such as Big Bazaar and Vishal Retail and it has started reflecting in their same store growth, which has declined 4 and 12 per cent, respectively. In south Delhi, many Subhiksha stores have shut down as they were not able to compete with the kirana stores. “An year ago, when Subhiksha had come to our vicinity, all the small store owners thought this is the end of our business. But one year down the line, Subhiksha’s pharmacy, food & grocery and vegetable mandi stores have shut down,” said Kishore Kumar, who runs a chemist shop in Lodhi colony in Delhi. “In the West, people like to buy once a week or once in two weeks from a hyper market. But in India, this trend did not last for long, especially when people want to save on everything, including travel cost,” said, Raghuraman Anand, director, The Boston Consultancy. Organised retailers have also been struggling with high rentals and inappropriate store location. “Our rentals account for 8-10 per cent of our total operational cost, whereas kirana stores do not pay any rental and that makes them more competitive against organised retailers,” said Samar Shekhawat, vice-president (marketing), Spencer’s Retail. Spencer’s had to shut 56 stores in 2008 as they were not giving business to the company. January 26, 2009 Kiranas unfazed by big retail -- that's ironic A couple of years ago, as modern retail was booming mindlessly, there was much concern about the future of mom-and-pop stores in the country, better known as kirana stores. Big retailers and consultants espoused the cause of modern retail and said it posed no threat to these stores and that there was space for all. They stand vindicated. The irony is not to be missed. Modern retail is still not making profits, shutting down stores all around and finding trouble filling shelf space. Kiranas, on the other hand, are seeing business as usual, notwithstanding the economic slowdown. Analysts Aniruddha Dutta and Shrinivas Radhakrishnan of CLSA India said in their report dated January 19, 2009, "The organised grocery retail stores are facing stiff competition from the mom-and-pop stores. We observed the customers' preferences tilting towards the kiranas for daily purchases due to convenience, better stocking and easier access." In the long term, the scale will work better for organised retail. But in the near term, big retail lacks the imagination and firepower to innovate and sustain its initial euphoria, the report states. Spencer's, Big Bazaar, Subhiksha and Reliance Fresh have shut down several stores, which were running in losses. They are all struggling with property costs and wafer thin margins. In fact, Subhiksha has exited the fruits and vegetable business in several areas. Most kirana shop owners are taking home delivery orders on their mobile phones and delivering goods to the customer's doorsteps, even if the order is as small as a loaf of bread. For Monica Khatri (23), a Mumbai Central resident, it is the comfort of quick and easy buy at kirana store that works. She said, "I have a Reliance Fresh outlet right opposite my house where I go once a month to buy certain utilities, but by and large I go to the kirana store downstairs. The benefits of going to a kirana store are many -- I do not have to keep my bag aside, there is not too much variety to confuse, and you buy what you originally intended to, within minutes." Samar Singh Shekhawat, vice-president, marketing, Spencer's Retail, said, "Given the current slowdown, there is definitely a downturn in sales revenue. Our same-store metrics is pretty flat but this is more because of the economic scenario than a shift of preference from organised to traditional retailing." Spencer's shut 55 stores last year and opened 20 new ones. Future Group's retail brands, Big Bazaar and Food Bazaar have also seen sales slump. "Though we are facing some challenges in terms of consumer reluctance to enter our stores, this is only a Tier-I phenomenon. Our business in the Tier-II market has not been affected since the market there is not exposed to the financial wreck as much as Tier-I market is," Atul Takle, head -- corporate communications, Pantaloon Retail India, said. Availability of products on credit and location close to home sure gives kirana stores an edge over big retail stores, which offer home delivery only on stipulation of a minimum order. Competing with small retail stores and kirana stores, however, is Future Group's new chain of retail stores -- KB's Fair Price -- which are non-air conditioned and need an investment of Rs 250 per sq ft as compared with the usual Rs 2,000 per sq ft. An analyst with a leading brokerage who did not wish to be named said, "Modern retail in India is always going to be a luxury and feel-good domain and traditional kirana stores are clearly at no risk from it. Consumers, who earlier purchased family-pack products, are now satiating their purchases with smaller packs and for this they go to local kirana stores." January 22, 2008 Discounts are donning a new avatar. It’s no longer just the price war for retailers but also about grabbing customer attention instantly. Brands are leaving no stone unturned in offering discounts over and above plain price cuts. Popular brands such as Benetton, Lilliput, Xcite, Ritu Wears and PVR Cinemas are offering novel discount formats to hook their clientele. Buy this: Happy hours on shopping deals, complimentary snacks for senior citizens, lucky seat contests for students and lottery gains are fast being lapped up by shopaholics. Brand strategy specialist Harish Bijoor is of the view that the objective is not to make the customer spend more. "Sales offering discounts on the second purchase not only ensure that customers spend a certain amount but also guarantees a repeat visit to the store. The 'loot' concept that has been picked up from the West plays well with the consumer psyche. They love it and would end up buying products they might never use," he says. Even display windows of leading stores play up on this very psyche. The innovative discounts offered build up the shopping fever. Leading kidswear brand, Lilliput for instance is offering freebies worth 40-50% of the total bill size. This, the company claims, has been a resounding success. "It not only liquidates our inventory but also helps in bringing 20-25% additional customers," says Kamal Gupta, VP - retail, Lilliput. United Colors of Benetton, a leading casual wear brand, has introduced happy shopping hours wherein one can avail of flat 50% between 8 am-12 noon and and after 8 pm for this weekend. And it's not a standalone example. Apparel brand Ritu Wears offers additional discounts of upto 10% if one shops between 10:30 am-1:30 pm. This is over and above their regular discounts of upto 50%. "One has to be unique to gain a competitive edge in the market. However, we feel that we need to keep changing such formats so that they stay novel for the customer. We plan to introduce other imaginative offers in the summer season," says Sanjay Sahni, MD, Rituwears. The case is the same across all retail categories. PVR Cinemas too has been following interesting promotional strategies to increase its weekday footfall. All senior citizens, for instance, will be offered complimentary snacks till February 1. There is also a lucky seat contest for students and 'buy one, get one free' offers aimed at boosting weekday traffic. "We have seen a growth of 8-9% during weekdays after these promotions. To be in any business, innovation is a must. One just can’t rest on their laurels," asserts PVR Cinemas Cine Media-CEO Gautam Dutta. Electronic retail chain, Xcite is not far behind. However, one has to spend a certain limit here to avail of their 'Spin to Win' incentives. Says Xcite CEO Srikant Gokhale, "One has to create excitement around shopping. Customers are usually more aware about your brand if there are novel campaigns doing the rounds. Every month, we try and come up with some creative ideas. This phenomenon is quite common in far eastern and western countries and we are trying to practice the same in India too. Most of the retailers are replicating western strategies on home turf. And it has rewarded them back too. Experts feel that its not only slowdown but the power of the competition which is driving such sale techniques. "Good marketing acts as an incentive to entice customers in favour of a particular brand. There is a certain joy and recall value when a customer gets a freebie. No wonder, even stores based on the Everyday Low Price Format (EDLP) are going in for promotional activities," reasons Arvind Singhal, chairman of global management consulting firm Technopak. Did we hear someone say novelty is King? It sure is. January 18, 2009 Direct selling to gain from slowdown, aims Rs 5,000 cr by 2012 The global economic downturn is proving to be a blessing in disguise for direct selling in India with the sector clocking 20 per cent growth annually and is set to touch a size of Rs 5,000 crore by 2012. "The current economic slowdown is a boon to direct selling. Several American and European companies are finding India and China as their favourite destinations to expand their business as it is comparatively less affected than the rest of the world. So direct selling becomes an easy option for them," adds Indian Direct Selling Association (IDSA) Chairman David Stanley, who is also CEO, AMC Cookware told reporters. Besides, Stanley said direct selling is also providing alternative career options for those people who were earlier working with outsourcing companies. "With jobs in BPOs becoming insecure, several employees who were working part-time as direct sellers are working full time. So it does enhance the growth in this industry," he said. According to IDSA, the sector clocked a turnover of Rs 2,851 crore for the year 2007-08 and expects it to double to over Rs 5,000 crore by 2012. Stanley said the association is confident that direct selling will touch Rs 5,000-crore annual turnover and this would be easier if the government recognised it as an industry. IDSA, which governs 16 of the largest direct selling firms in India including Amway and Oriflame, claims the sector has also been strongly contributing to the Indian economy. "IDSA companies paid over Rs 111 crore in direct taxes and Rs 168 crore as indirect taxes to the Indian government, a contribution of Rs 279 crore during the year to the exchequer," Stanley said. Besides, backed by a distribution base of over 1.6 million, the sector has also been able to attract companies to set up their manufacturing bases in India. "Companies registered with IDSA either own or run 18 factories to manufacture and prepare products for the Indian and export market. They employ 38 contract manufacturers," Stanley said. January 18, 2008 Organised retail in India will top US$22bn by 2010: ASSOCHAM The size of Organised Retail in India will exceed US$22bn mark from current level of about US$4bn with its space requirement touching over 220mn sq. ft., by 2010, according to The Associated Chambers of Commerce and Industry of India (ASSOCHAM). In a Paper brought out by ASSOCHAM on `Retail Scenario in India and Its Related Issues’, it has been stated that approx. 40mn sq. ft. is currently generating a business of about US$4bn in organised retail. According to the Paper, the total retailing size in India is currently estimated at US$16bn of which organised sector accounts for only 25% market share and remaining 75% is in the unorganised sector. Slowly and gradually, with boom in retailing continuing, the organised retail sector in small towns beyond metros will grow at a staggering level of 50-60% as compared to less than 35% in the large cities purely on account of scarcity of space which is in plenty beyond metros with reasonable land prices and without cumbersome procedure for land acquisitions, says the Paper. Commenting on the Paper, ASSOCHAM President, Sajjan Jindal said that, “India’s vast middle-class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets and India provides for the ideal locations”. Since, Delhi and its suburbs have so far seen the growth of 100 bigger and smaller malls, roughly 600 new malls are coming up in other metropolis and large townships in which less than 35% of retail business is going to be transacted. The Paper reveals that over 1000 malls are in the pipelines for smaller townships in which the retail sector is projected to grow at over 60% because of ample availability of land and increased purchasing power of the folks living in those areas because of increased economic activities. Naturally, the large players will prefer to go there and put up their shops by sourcing their supplies from the places convenient to them, further states the Paper. Some of the key areas in which retail boom will prevail in towns beyond metros and even large cities will include food items, FMCG products, grocery, sportswear, outerwear, tailored clothing, eyewear, watches, footwear and accessories and the like. The retail business that will pre-dominantly stay with malls put up in metros and large cities will include apparel, pharmaceuticals, luxury goods and consumer durables, says the Paper. The Paper has suggested that changes should be brought about in Agricultural Produce Marketing Committee (APMC) Act (a key contributor to the large number of intermediaries) such as the introduction of contract farming and allowing direct procurement from farmers by retail owners so that a direct chain is established between the user and farmers for their equal benefits. It also highlights, pointing out that even in the case of non-agricultural products such as apparel, FMCG and general merchandise, the situation is far from ideal. The key cause for inefficiency is the poor integration between the retailer and supplier. None of the retailers, in view of ASSOCHAM has so far an automated system for information exchange with their suppliers. In developed countries, retailers practice Vendor Management Inventory (VMI) systems, where the supplier has access to the point of sales data of the retailer and plans automatic replenishments responding to the stocks available at the retailer. On the other hand, best practice retailers globally have implemented techniques like milk runs – having continuous orders to suppliers as the inventory depletes and doing multiple small lot shipments from the supplier to stores. Such efficient replenishment practices are today practiced in the Indian auto and auto component industry. So retailers in India can leverage such expertise available to implement a better retail supply chain. January 16, 2009 Sales fail to lift retail spirits None of the offers, promotions and marketing gimmicks seem to be working to the advantage of modern retailers. While the slump in Diwali sales was the initial setback, the fact that most of the big players recorded negative same-store sales in December as well proves that consumers are still not in a mood to splurge. The retailers won't accept it, though. They are either in the 'silent period' before the announcement of financial results for the October-December 2008 period or just wouldn't talk. Govind Shrikhande, chief executive officer, Shoppers' Stop, said, "We are now in our silent period till board meeting on January 28, hence cannot comment." Analysts Vandana Luthra, Manish Sarawagi and Anuj Bansal of Merill Lynch Research in their reportRetail India dated January 14, 2009, wrote, "December same-store sales (SSS) declined by 4% in value, 14% in lifestyle and 10% in home formats for Pantaloon Retail (India) Ltd. Coupled with unexciting growth rates in the earlier months of the year, YTD sales growth is anaemic across formats -- 8.5% in value, 4.5% in lifestyle and 2.7% in home." Traditionally, November sales post the festival season are sluggish. But for the first time in four years, Pantaloon has seen a slump in December SSS. This is despite the mega sale that the Future Group had offered for three weeks starting December 13. The company claimed to have generated revenues of Rs 700 crore though this national sale. In another report dated January 14, 2009, Morgan Stanley analysts Hozefa Topiwalla, Divya Gangahar and Girish Achhipalia, reiterate the fall in sales. "We spoke with nine other retail/consumer companies this morning to check whether they witnessed similar trends in December 2008. The key conclusion is that all consumer discretionary product sales have been badly impacted from December 15. Most companies blame it on the inauspicious period for weddings and celebrations which began in December 15," they said. The Morgan report stated that for Arvind Retail, both lifestyle and value retailing formats witnessed negative SSS growth in December. The lifestyle format witnessed de-growth in high single digits, primarily due to a sharp fall in revenues in the third week of December. However, sales have apparently picked up from the last week of December. J Suresh, chief executive officer, Arvind Brands and Retail, however, denied any downturn.He said, "We have not witnessed any downturn in sales. There may be a slight dip in comparison to last year because, in December 2007, we carried out a sale, which worked well for us." So what can retailers do now to sustain growth? Not much, say experts. Nikhil Vora, analyst, IDFC SSKI India Research, said, "A lot of activation at the store level is required. But this is getting more and more difficult and also comes at a cost, which then hits the margins. As long as the consumer sentiment is down, sales will not improve and I expect them to get worse in the coming months." But there are others, who are more optimistic. Harminder Sahni, managing director, Technopak Advisors, said, "Consumer sentiment in December has been the worst that I've seen in my life. It can't fall any further and I don't think consumers who have been holding back for the past several months will do so anymore." January 14, 2009 Nilesh Bhargava (name changed) is a small retailer in a Bypass mall. He has not paid rent since October because he has just not earned enough to fork out Rs 60,000-odd per month for his 300 square feet outlet. The bailout for Bhargava and a growing number of mall retailers could lie in fixed monthly rentals being replaced by revenue-sharing. A mismatch between “exorbitant rentals” and “dwindling business” is fuelling the clamour among retailers for a shift to the alternative system to stay afloat in malls. The chorus for rent rationalisation is hitting home, with the management of South City Mall already rolling back rentals by 10 to 25 per cent following a petition by a group of around 20 shop-owners. “We have reduced rents for our vanilla retailers (smaller, non-anchor stores) for a temporary period to help them tide over these troubled times,” Sanjeev Mehra, the vice-president (mall operations) of South City Mall, told Metro. It all started with some badly bleeding stores at the Mani Square mall not paying rents and coming together to force the management to consider a system of sharing sales revenue. Rentals, in the Rs 80-90 (per sq ft per month) range when Forum opened six years ago, are touching Rs 350 for some outlets now, and this is “grossly irrational”, concur retailers. “In today’s market scenario, anything above Rs 125 should be deemed unreasonable,” feels Madhusudan Binani, a city franchisee of prominent brands. Rentals going through the roof have little synergy with market dynamics, stresses Kamal Jain, a city-based franchisee of brands like Adidas, Benetton and Nike. “Given the low energy in retail business now, mall-owners should just do away with monthly rentals; revenue sharing is the only way forward,” he adds. Mall-owners must be ready to share the investment risk, not just the spoils, agrees Abhijit Das, the managing director of international property consultants Jones Lang LaSalle Meghraj (Calcutta). “If the developer is so sure of the strength of his asset, he should be more flexible with rents,” he points out. Mall managements are wary of a large-scale switch from monthly rentals. “We have entered into a revenue-sharing model with some big national/international retailers, and it works fine, since they all have a very transparent transaction system. There might be a problem with small, unorganised retailers; we are working on a number of discounting models for them,” says Subesh Ray of Mani Square. City Centre, which has a revenue-share arrangement along with a minimum guarantee clause with some outlets like KFC and Pizza Hut, is also not keen to replicate the model en masse. “It’s much more difficult to do it with smaller players. But if market forces demand a correction in rental rates, it will automatically happen,” says Pramod Dwivedi of the Salt Lake mall. Given the winter woes at malls, chances of organised retail trade crossing the Rs 230,000-crore mark by 2010, as predicted by the Images India Retail Report — with Calcutta accounting for seven to eight per cent — look remote. “Co-operate, not compete,” Kishore Biyani, the founder and CEO of Future Group, said at a recent retail summit in Mumbai. “Collaboration with stakeholders is key to profitable business and growth hereon.” The mall-store handholding must begin now, believe Calcutta retailers, desperate to deal with a footfall crisis that has forced many brands like Adidas and Pantaloons to go into “sale” mode prematurely. January 12, 2009 Slowdown signs: labels lose their lustre, brands wagon on sales Emporio Mall goes on sale 3 months after opening; many brands shut shop. Here's another indication of the economic slowdown: American design label Ed Hardy, which opened its first store amid much fanfare in Connaught Place in March 2008, has already shut down. Ed Hardy, known for its irreverent, grungy look and tattoo-influenced styles, stocked T-shirts priced between Rs 3,500 and Rs 24,000. In a terse SMS to clients recently, the management stated that the location wasn’t right, and they have moved the stock to an outlet in Select Citywalk, Saket. Traditionally, close to 60 per cent of all international luxury brands sales in India have been accessories: bags, wallets and belts. Stores such as Armani, Just Cavalli and Dior opened at the 320,000-square feet Emporio Mall in October at Vasant Kunj with their apparel lines that simply haven’t found buyers. The Emporio mall is on sale at present, with some stores like Zegna giving discount sales of 60 per cent. For instance, menswear at Zegna, typically priced at Rs 12,000 for a pair of pants or jeans, currently costs Rs 5,000. After the Mumbai terror attacks, the stock in their outlet at Taj Mumbai was moved to Delhi. Kenzo and Canali, other popular menswear brands based out of Emporio, are giving a flat 50-per cent discount. “Indians who entered luxury retail in partnership with these brands overestimated the size of the market,” says Pradeep Hirani, proprietor, Kimaya Store. Indians, he says, are brand conscious. “They will buy bags with a showy label — the Dior sensibility in clothing does not appeal to the Indian buyer. The stores have huge pressure to liquidate stock and update collections, so they have no option but to go on sale.” Versace Clothing, which sells in India through Sehgal Brothers in South Extension, announced a 50-per cent sale two days ago. Charu Sachdev of TSG Brands that brought Tommy Hilfiger into India a few years ago and recently launched Marc Jacobs and Kitsch, an international multi brand store, both in Emporio, is cautiously optimistic. “We hope people will at least come to view this fabulous collection,” she says, taking about the Marc Jacobs sale. January 12, 2009 Retailers look for fortune at bottom of pyramid Major retailers around the country, who had adopted a ‘wait and watch’ policy till sometime back in the hope of real estate prices coming down, are now back in action. While on one hand, retail majors are pressing developers to go in for revenue sharing model along with providing other freebies, most of them that SundayET spoke to say that action will now shift to tier II & III cities. Says Sanjay Dutt, CEO (business) Jones Lang LaSalle Meghraj; “In 2009, retailer brands will look at tier II and III cities. Luxury brands, however, will stick to metros. Pan India mall developers will look at more practical rentals in 2009. High streets may see consolidation with a high possibility of a revenue-sharing model in terms of the overall cost-to-retailer on many high streets. We have seen a decisive scaling up in transactions in the hypermarket category. The demand is clearly higher for stand-alone high street locations rather than mall-based locations. This year is expected to be a year of consolidation for Indian retail sector. As a result of adoption of best practices and restructuring of business models by the retailers, organized retail is expected to realign itself to the market conditions and create new areas of growth in 2009.” Future Group, the largest retail company in India, that has a presence of about 11 million sq ft plans to expand to about 30 million sq ft by 2011. But the retail space, the company says, was already finalised sometime back. Says Kishore Biyani, CEO of Future Group; “So far there were no deals happening. Now suddenly there is activity being seen. We are also looking at striking new deals at a few places. Seeing the condition of real estate market, even developers are willing to negotiate now. We plan to expand our presence to at least 100 cities and the focus is now tier II and III cities.” He feels it will be a win-win situation for both the retailers and developers. Future Group’s Big Bazaar aspires to be present in all the cities with a population of more than three lakh. They have stores in cities like Chandigarh and have recently opened a store in Nashik. According to industry sources, the retailers are not only in negotiations on the fresh deals but the existing deals are also being discussed again. Brand House Retail (BHRL), a subsidiary of Mumbai based S Kumar’s Nationwide, has so far 700 stores across India and plans to open at least 400 more this year. “With the situation changing, developers have realized that its no point charging the tenant what he can’t pay. Property prices coming down have ensured that our plans are on track,” says Tarun Joshi, MD, BHRL. Developers, who till sometime back were not ready to even negotiate prices, are now offering freebies to attract tenants. According to industry sources, majority of the developers across the country have lowered the common area maintenance charges that include facilities like air-conditioning, toilets and general space upkeep. In fact this itself constitutes almost half of the rentals paid. Says Ambeek Khemka, president, business development of Vishal Retail: “The situation has reversed now. There is more space in market than the demand. The developers don’t want vacant space in their malls as no one wants to be in a mall with low footfalls.” Ajit Joshi of Infiniti, which runs the Croma electronics retail chain says, “Developers have accepted that they cannot dictate terms any more. Both retailers and developers are now arriving at an understanding that is beneficial for both the parties involved.” According to a recent Cushman & Wakefield report, in certain micro-markets many retail spaces saw conversion into office space for quick revenue returns due to continued and increasing demand for office space. This trend is expected to continue in the coming few quarters too. January 11, 2009 Malls losing brands to high street Indian malls, like their US counterparts, are loosing brands to high street. Retailers grappling with issues of viability, visibility and branding are now quitting malls. Recent months have seen a gradual, but noticeable exodus of brands from malls to single-format stores on high street. This trend has added to the stagnant spaces in new malls, which have already been finding it difficult to get initial bookings from retailers. According to a report by global real-estate solutions firm Cushman & Wakefield (C&W), the mall vacancy rate in urban India touched a high of 16% by the end of 2008. The survey was carried out across eight major cities—NCR, Mumbai, Kolkata, Ahmedabad, Bangalore, Chennai, Hyderabad and Pune. The reports attributes the vacancy levels to inconsistent mall supply and revival of the high street as the most sort after retail destination. The highest level of vacancy in malls was witnessed in Delhi and Pune, with vacancy levels of 24% and 15%, respectively. “There is a gradual but noticeable exodus from malls to single-format stores on high street. Today, retailers seek viability in stores and give lesser importance to stores for branding purposes,” says JLLM (Jones Lang LaSalle Meghraj) MD (retail) Shubhranshu Pani. “The retailers are preferring the high street because of higher visibility, independent access and the greater comfort level as compared to the malls,” Cushman & Wakefield retail services director Rajneesh Mahajan adds. January 8, 2008 Retail rentals in upscale metro areas dip by up to 44% Retail rentals at upscale locations and shopping malls dropped in most metros in 2008, with retailers — plagued by lower sales and high costs — turning cautious on expansion plans and shutting down several unviable stores, as per a report by property consulting firm Cushman & Wakefield. The report predicts a further drop in rentals in 2009. The high streets of Mumbai, which had seen a price appreciation of 100-156% in Q1 FY08, were the worst-hit. Rentals fell sharply in Linking Road (-44%), Kemps Corner/Breach Candy (-41%) and Colaba Causeway (-38%). Mall rentals tanked 20% in Vashi, 17% in Goregaon and 14% in Mulund. Mumbai registered a mall vacancy of 10% as 2 million sq ft of fresh retail space entered the market. Delhi NCR, which saw 24% vacancy, the highest in the country, too registered massive correction in retail rentals. While the figure for Connaught Place, Karol Bagh and Basant Lok declined 16%, the fall was marginally lower in Khan Market at 14%. West Delhi witnessed a 27% decline in mall rentals. The fall was 12% in South Delhi and 22% in Noida. “Lower or negative revenue growth over the past year on same store basis and high rental costs of the stores added in 2007/08 have forced retailers to take a relook at their portfolio. The year saw retailers beginning to resize stores, renegotiate rentals and even exit locations where operations became unviable,” said Rajneesh Mahajan, director of retail services at Cushman & Wakefield. January 8, 2008 Retail rentals show downturn in Metro cities Retail rentals in high street locations and shopping malls dropped in most metros in 2008, as retailers, plagued by lower sales and high cost, turned cautious on expansion and closed down several unviable stores, as per a report by property consulting firm Cushman & Wakefield. The report predicts a further drop in rentals in 2009. The high streets of Mumbai, which had seen an appreciation of 100-156% in Q1 2008, was the worst hit. Rentals fell sharply in Linking Road (-44%), Kemps Corner/Breach Candy (-41%) and Colaba Causeway (-38%). Mall rentals dropped 20% in Vashi, 17% in Goregaon and 14% in Mulund. Mumbai registered a mall vacancy of 10%, as 2 mn sqft of fresh retail space entered the market. Delhi NCR, which saw 24% vacancy, the highest in the country, too registered massive correction in retail rentals. While rentals in Connaught Place, Karol Bagh and Basant Lok declined 16%, the fall was marginally lower in Khan Market at 14%. West Delhi, which has seen a proliferation of malls lately, witnessed a 27% fall in mall rentals. The decline was 12% in South Delhi and 22% in Noida. Rentals in Chennai, Hyderabad and Bangalore fell by 33%, 29% and 28% respectively. "Lower or negative revenue growth over last year on same store basis and high rental costs of the stores added in 2007/08 have forced retailers to re-look their portfolio. The year saw retailers beginning to resize stores, renegotiate on rentals and even exit from locationswhere operations became unviable," said Rajneesh Mahajan, Director of Retail Services at Cushman & Wakefield. January 8, 2008 Pharma RetailGuardian Lifecare spreads reach, plans 50 stores by March Guardian Lifecare, a health store chain, is spreading its reach. The company plans on opening 50 stores across the country by March this year. It currently has 15-20 stores in the pipleline, two of which will be opening shortly in Mumbai at Phoenix Mills and Inorbit Mall at Vashi. The company will also be opening two stores in Bangalore, 12 in Delhi, six in Noida, six in Gurgaon among others in the next two months. With plans to tap into the southern market, stores will open in Hyderabad and Chennai in addition to Pune post March. Ashutosh Garg, Chairman and Managing Director of Guardian Lifecare, told ET, "We expect revenue to cross Rs 100 crore by March 2009. By March 2010 we expect that it will go to Rs 300 crore. In the next 12 months we plan on opening 400 stores across the country and expect to spend Rs 100 crore on this." The company still has funds left over from its last fundraiser and has enough to carry it through till mid 2010. With a no franchisee policy, all the stores are proprietary. January 22, 2009 Lifestyle & Luxury RetailingSales in home segment picking up: Biyani Sales in Future Group's home segment have seen a better pick-up this month after facing rough weather in the past few months, its founder Kishore Biyani has said. "Sales in the home segment (through HomeTown stores) have started moving on account of lower prices. We have seen better a pick-up in January," Kishore Biyani, who is also the CEO of Pantaloon Retail India Ltd said. The group's retail arm Pantaloon Retail India Ltd had on January 21 announced a net profit of Rs 33.54 crore for the second quarter ended December 31, 2008, up 5.97 per cent over the corresponding period a year ago. The company had a net profit of Rs 31.65 crore in the same quarter last fiscal. Biyani, however, refused to comment on whether the earnings clocked were in line with the targets set. On expansion plans and the outlook for fiscal 2010, he said, "Can't say in this environment, but we are assessing our growth targets. We are definitely aiming for higher returns and more profitable growth." Future Group had last month introduced the month-long 'Great Indian Shopping Festival', whereby the company gave away generous discounts and offers to woo consumers to its stores. Asked whether the group would cut prices to sustain its sales momentum since the festive season was over, Biyani said, "It depends on the manufacturers. If they cut prices, we may cut prices too." Lauding the Centre's stimulus doses to boost demand, he said the government's move to build consumption was proving good for them. January 27, 2009
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