Stay abreast of the fast moving economic super-power — India!
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Retail News February 2007 Future Group will now focus on lifestyle and
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Buy our Omnibus edition featuring 4 reports covering the fast growing retail scene in India. Updated March 2008. The reports begin with an overview of Retail in India. Your purchase includes 3 additional reports on: 1. Grocery and Food Retail 2. Growth of Malls in India 3. Growth of Single Brand Stores in India |
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Reliance Retail has won over many kirana store owners, with several shop owners doing their shopping at Reliance Fresh stores to resell the products such as edible oil, rice and other items at their own stores. With Reliance Fresh selling fresh vegetables at less than 50% of the price than mandi rates. In less than 10 days that Reliance has been operating in a Delhi suburb, one store has over 3,000 customers a day and sales of over Rs. 400,000.
According to a Reliance Retail executive, “Collection centres for various commodities (potato in Uttar Pradesh and West Bengal, onion in Nasik and so on) are being set up across the country, where we procure directly from the farmers. Cold storage facilities are in place for grading and sorting. Thus, the farmer’s produce, which is local, reaches to national consumers. While ensuring better price to farmers, this also offers value to consumers in terms of quality and price.”
Source: Business Standard
The Aditya Birla Group announced that it will be operating its retail business on its own and not tying up with any international retailer, as was being speculated. The company recently acquired south based supermarket chain store Trinethra, giving it a head start on its competitors. Kumara Manglam Birla, Group chairman said that the company would be announcing its detailed plans in the next two months.
Source: The Economic Times
Reliance Retail is looking to create niche retail formats along with its existing formats. According to Raghu Pillai, President and CEO (Operations and Strategy), "We are looking at opening 250 Reliance Fresh outlets by February or March in cities like Pune, Bangalore, Hyderabad and Mumbai, and in some cities in Gujarat. We will also start opening our standalone niche retailing stores that would include formats like consumer durables and apparels, amongst others. The hypermarket outlets will also come up in the same time span."
The company will also be staring a home delivery service at its Fresh outlets for customer within a range of up to 3 kms. Reliance Retail now has 3 Ranger Farm outlets, its B2B format store, in Hyderabad and Jaipur. The company is also creating its own private label and is currently conducting testing on products.
Source: The Hindu Business Line
Reliance Fresh opened nine stores in the National Capital Region (NCR) taking the total number of stores to 50. Now the company will be opening 100 additional stores in the NCR in the next 4 months. Fifty of these stores will be in Delhi and the remaining will be in surrounding areas of Noida, Greater Noida, Faridabad, Ghaziabad and Gurgaon.
Reliance aims to have 1,000 Reliance Fresh stores by the end of the year in 35 cities, covering a total space of 4 million sq ft. According to Raghu Pillai, President and CEO of Reliance Retail (operations and strategy), “ It will be very hectic for us till March. We are planning to open 250 Reliance Fresh stores in Punjab, Delhi, Karnataka ( Bangalore), Kerala, Gujarat, and Maharashtra (Pune and Mumbai).”
Between April and June, the company will also launch its hypermarket and specialty store formats. Specialty stores will include consumer electronics, apparel, pharmaceuticals and healthcare items. The first hypermarket is likely to come up in either Delhi or Ahmedabad.
Source: Business Standard
US based retailer Wal-Mart is reportedly considering several models of acquiring space for its stores, including a rental model due to the high prices and lack of availability of retail space. The company is also in talks with several real estate developers to sign up space as anchor tenants in malls, whereas Wal-Mart’s stores usually are standalone stores.
Bharti-Wal-Mart have begun acquiring real estate and has already got close to 150,000 sq ft in cities such as Delhi, Noida, Gurgaon, Hyderabad, Bangalore, Ahmedabad and Chandigarh. The company will be operating on two strategies, one for small cities where they would own hypermarkets and one for large cities where they would go for long lease due to shortage of retail space.
Source: The Economic Times
Bharti Enterprises is well on its way to set up things to start operations by August 15, 2007 and has started looking for property across the country. At the World Economic Forum, Sunil Bharti Mittal, Chairman and managing director of the Bharti Group, said "Our desire is to start the retail trade and cash-and-carry business by August 15, but it will definitely be done before the end of this year."
Bharti Enterprises will be setting up a retail chain under a franchise agreement with Wal-Mart. It will also be setting up a cash-and-carry business with Wal-Mart it has set up a new equal partnership company has been formed, which will take care of transportation, cold chain and back end work.
Source: The Hindustan Times
Reliance Retail opened 12 Reliance Fresh stores in Chennai, its third city after Hyderabad and Jaipur. The company is marketing its Fresh stores as neighborhood stores, which will stock fresh fruits and vegetables, food staples and grocery and dairy products. Fresh stores will stock roughly 150 products and target approximately, 3,000 households in the immediate vicinity of 1-2 kms.
At the opening of the stores, Gunender Kapur, Head of Reliance Retail addressed a press conference, where he said that, "We are developing the Reliance Fresh chain as a neighbourhood food store, with each store coming up between 2,000 sq ft to 4,000 sq ft of space. We will be relevant for all income groups in a neighbourhood." The company is also introducing its own private label products under the Reliance Select brand, which is at present only for stapes and will be added for other categories too.
In total, the company now has 40 stores in three cities. Reliance Retail will be opening stores in Vijaywada and Vishakapatnam also this week. Procurement centers have been established in Thiruvallur, Maduranthakam, Oddanchatham and Kodaikanal for agricultural produce such as vegetables, which are then taken to its processing centre at Puzhal, which is located north of Chennai.
Source: The Economic Times, Nasdaq.com
Not all kirana store owners are worried about their future, some are quite overjoyed at the rise in real estate prices that the retailing boom has brought about and are all to happy to lease out their premises to modern format stores. One of the biggest problems that the fledgling retail industry is facing is the severe shortage of retail space within cities, especially in central areas, where the kirana stores are already established.
So instead of competing with the organized retailer, kirana storeowners are opting to lease space to them, giving them a readymade market and local customer base. Food and grocery retailers like Subhiksha, Spinach and Spencer’s are signing long leases with kiranas that are over 1,000 sq ft in space.
Source: The Economic Times
Retailers in India are said to be the most aggressive in pursuing real estate transactions as a method of expanding operations. According to the 3 rd annual Jones Lang LaSalle Retailer Sentiment Survey-Asia, which was conducted in three Asian sub-regions, India, greater China and South East Asia, 45% of Indian retailers were expanding rapidly, followed by 27% in greater China and 6% for South East Asia.
Almost two third of retailers surveyed responded that their overall trading would improve in the course of the year, while only 5% felt their business would weaken. Home furnishing, sports apparel, department stores, jewelry stores and food retailers were the most confident on expansion plans.
Source: Business Standard
The top six retail companies in the country reported an increase in net sales by 46% for the quarter, while net profits only rose 29% for the period. Top line growth was 59% for Pantaloon, 29% for Shoppers’ Stop, 28% for Trent and 43% for Titan, but profits were not as impressive due to rising staff and real estate costs.
Pantaloon Retail reported sales growth of 63% for its value retail segment and 37% for its lifestyle retailing segments, adding Rs. 270 million with its home furnishings concept segment. Interestingly, the growth came from new stores, while older stores growth rates stood at 14% for value retail and 15% for lifestyle retail.
Source: The Economic Times
India’s organized retail sector is expected to cross $22 billion by 2010, a significant increase from its current value of $4 billion. The increase in size of the organized retail sector will also require over 220 million sq ft of space. These results were reported according to industry organization Assocham. The total retail industry in India is worth $16 billion at present, of which the organized retail sector accounts for only 25%.
The organized sector is expected to grow in large part due to the fast pace of growth in small towns, where it is growing at 50-60% as compared to 35% in larger cities. There are close to 600 malls coming up in metros and large cities. Another 1000 malls are being planned for smaller towns where land is available and consumers have access to increasing incomes. The big sellers in small towns are food and grocery items, FMCG, sportswear, eye wear, watches, footwear, tailored clothing and outerwear.
Source: The Economic Times
Retailers such as Pantaloon, Reliance and Bharti-Wal-Mart will soon be launching their own private labels for beauty products. The companies are in talks with VLCC, a fitness, health and beauty products company to manufacture private label beauty products.
Pantaloon Retail are already in the health and beauty business, with a service format of beauty salons, called Star and Sitara and have also started retailing beauty products through its new outlet called Turmeric. The company is waiting VLCC to take care of manufacturing its private labels for them.
Source: The Hindu Business Line
It is estimated that 11 retailers are gearing up to offer IPOs this year, raising approximately Rs. 20 billion. According to market monitoring firm, Prime Database, retailers such as Vishal Retail, Ebony Retail, Great Wholesale Club, Hidesign, Hotspot, Koutons, Landmark, Maheshwari Mega Ventures, Multiple Zones, Radhakrishna Foodland and Talwalkars are all planning IPOs.
The domestic retail sector is so attractive and full of opportunity that retailers just cannot afford to give it a miss. In the 2006, besides Gitanjali Gems and Kewal Kiran Clothing, there weren’t any major IPOs. In 2005, there were several mega IPOs including Shoppers’ Stop, Provogue, Piramyd, Bombay Rayon Fashions and Celebrity Fashions.
According to Arvind Singhal, Chairman of Technopak Advisors, “ Smaller players now have to compete with bigger players entering the market. When they realise their own funds and bank credit is insufficient for expansion, they go for IPOs. The existing retail companies are giving handsome returns. That would be another driving factor.” Source: Business Standard
Farmers in Punjab are expected to significantly increase their incomes with the arrival of large retailers on the agri-scene, who are creating a huge demand for fresh fruits and vegetables. Several companies such as ITC, Reliance and Subhiksha have signed agreements with farmers to source products directly from them. According to an official at Subhiksha, “ As there are less intermediaries between us and the farmers they get higher returns on their produce.”
Around 70 farmers in Sangrur, Hoshiarpur, Fatehgarh Sahib and Ropar have turned to net-house cultivation to produce high-value and off-season crops that are in high demand with the retailers, with technical help from the Punjab farmer’s commission and financial help from the State Bank of India. In Nawashahar and Jagraon, Centurion Bank of Punjab has teamed up with Chambal Fertilizers to finance 200 farmers to grow potatoes.
Source: Business Standard
Several small and independent supermarket and grocery stores are fighting back against being taken over by larger retail chains. One of the early entrants to the organized food and grocery retail phenomenon, KD’s Loprice Supermarket in Andheri (W) has noticed the difference in traffic since Food Bazaar and Spinach have opened within a 1 km radius. Once the lowest prices in the region, the standalone store has felt a serious threat to its USP.
By reducing their catchment area from 4km to half a kilometer, the store began to target their immediate neighbors as customers. KD’s also increase their stock of high-margin items from 65% to 72% and saw an increase from Rs. 300 to Rs. 375 per customer ticket in just a year. In Maharashtra, there are a number of retailers who have set up standalone organized retail stores that are neither kirana stores nor wholesalers.
Sarvodya Supermarket, located near Dadar station redid its entire format, from store layout to investing in technology when Magnet Hypermarket opened nearby in Matunga in 2005. The store has seen customer sales increase 10% per customer despite the proximity of Magnet.
Source : The Economic Times
With several retailers adding the word ‘Fresh’ in their brand names, the word is no longer unique in the food and grocery sector. Reliance Fresh was the most high profile brand that seems to have spawned a chain reaction. Besides the word ‘fresh’, several retailers are even using the red and green colors that Reliance Fresh uses. Is it just a coincidence or rival companies trying to make use of subliminal ways to attract customers?
ITC has Choupal Fresh and Heritage Foods has Fresh@, with the location name of the location added at the end. Subhiksha doesn’t have the word ‘fresh’ in its brand but does use the same shade of red and green in its signs and logos. Source: The Economic Times
Speaking at a discussion on “Innovation at Retail” at the World Economic Forum, the Secretary for the Commerce and Industry ministry, Ajay Dua said that global retailers must adapt different business models to be successful in developing countries. He added that each country required a “unique country characterization” instead of using the same strategy that has worked elsewhere.
On the peaceful co-existance of organized retail and mom and pop stores, he said, “ While organised retail formats in all the emerging markets are growing, given the rise in disposable incomes and rapid additions to the middle class, they will have to co-exist with the traditional mom-and-pop stores which have their own place.”
Source: The Economic Times
The Future Group’s hypermarket division, Big Bazaar is pulling out all the stops for its annual ‘Sabse Saste 3 Din’ promotion from Jan 26-28. Products from categories such as apparel, furniture, electronics, food etc will be sold at their lowest possible prices. The company netted Rs. 430 million from 24 Big Bazaar outlets during its three day sale last year. This year the company is expecting one million footfalls in the Big Bazaar and Food Bazaar stores.
Due to the large number of customers who come for the sale, Big Bazaar will be getting some help in crowd control by the police. To ensure that no one is waiting in lines at cash counters, the company has set up 250 cash counters in each of its 43 Big Bazaar stores. It has also widened the aisles to de-congest them and moved certain products that are not on special offer.
Source: The Hindu Business Line
Provogue India Ltd announced that it had raised Rs. 1.46 billion in preference shares with 6 investors at Rs. 450 a share. The six investor companies are New Vernon, Blackstone, Fidelity, Genesis Capital, Artis Capital and Liberty International, who have bought 3.25 million shares of the company. According to a statement released by the company, the shares will be locked in for a year.
Provogue has recently tied up with Liberty International to set up a retail infrastructure venture, where Liberty had bought 25% of Prozone, a division of Provogue, for Rs. 2.02 billion. According to Mark Rubin, CFO of New Vernon Capital, “ Provogue with its brand strengths and the knowledge and experience from its strategic partners is ideally poised to lead growth in the branded retail and shopping mall development space.”
Source: The Economic Times
Russia ’s largest mobile handset retailer will be opening its outlet in India by end of February. Euroset plans to set up 5,500 retail stores across Indian in the next two years. The company is reportedly in talks with real estate development company Ansals to partner with for its operations in India, although Ansals spokesperson declined to confirm any finalization of agreement between the companies. Source: The Telegraph
Bharti Enterprises will be going ahead with its joint venture with Wal-Mart, despite getting mixed signals from the government on account of Congress President Sonia Gandhi’s letter of caution an FDI in retail to the Prime Minister. According to Sunil Mittal, Group Chairman of Bharti, “Bharti’s retail venture has no plans for FDI… Current policy allows wholesale and we are following it.”
Source: DNA India
Congress leader Sonia Gandhi’s letter cautioning the Prime Minister on opening retail FDI too soon, might have deep repercussions on the retail industry in India. Reportedly formulation of rules and policy consultation on FDI in retail in specific sectors such as stationary, sports goods, building equipment and electronics has now been halted for the present. A senior government official said that until there is further communication from senior leaders, additional sectors will not be added. Source: The Economic Times
French retailer Carrefour is likely to sign a deal with an Indian company to start operations in the country, according to India’s commerce and industry minister, Kamal Nath. He added that the company was in talks with the Wadias of Bombay Dyeing, one of the top business families of the country. Neither Carrefour nor Wadia Groups spokesperson was available for comment.
The competition to enter India’s booming retail market is hotting up, with Wal-Mart recently tying up with Bharti Enterprises. Other retailers such as Tesco and Metro are also pushing to enter its retailing front. Metro has been operating in India via its cash-and-carry wholesale stores.
There are reports that Carrefour is also holding talks with other Indian companies and not just the Wadias. According to Ajay Dua, Secretary in the department of Industrial Policy and Promotion, "The information we have got is that they are talking to various companies to look for a partner but they are yet to finalise its name." Source: Reuters, The Economic Times
UK’s home improvement retailer Kingfisher is looking to join India’s retail sector with an initial investment of $250 million. According to reports, a team from Kingfisher is in India looking for partners as well as locations for its stores. The Indian government had recently announced that it would consider allowing FDI in specialty retail, which is where Kingfisher would fit in, as they sell appliances, tools, hardware, garden supplies and DIY (do-it-yourself) products.
Source: The Economic Times
The Anil Dhirubhai Ambani Group (ADAG) is reportedly holding talks with three major global retailers in an effort to form a partnership. The three companies are Tesco and Carrefour, which are both food and grocery retailers and Radio Shack, which is a consumer electronics, focusing on mobile equipment and accessories, which will tie in nicely with ADAG’s current chain of Reliance shops (formerly known as Webworlds).
Source: The Economic Times
UK based retail firm Tesco is reportedly interested in tying up with an Indian company to start operations in the country. Tesco’s global chief, Sir Terry Leahy will be coming to India later this month, and according to market buzz, he will be meeting with Tatas and the Landmark Group. Tesco’s rival companies are either in the country or will soon be in the market; Wal-Mart has recently tied up with Bharti Enterprises and Carrefour is on the verge of tying up according to media reports.
Source: The Economic Times
With its tie up with Starbucks almost complete and talks on with US fast food giant Burger King, Pantaloon is now keen on forming some joint ventures in the apparel segment. The company is looking to establish joint ventures with European firms for the menswear and kids wear segments. If a JV deal cannot be reached at, then a licensing deal will be explored with the companies who are all well established brands.
The company has already formed a JV with French retailer ETAM to form ETAM Future Fashions India for the 22-30 age bracket women’s wear segment. The company will be opening 42-50 standalone stores in the next 18 months with the company. In the meantime, Pantaloon has launched its lingerie line in three of its stores.
According to Susil Dungarwal, a retail analyst, Pantaloon is possible going to become the leader in multi-segment retailing, adding that, "In the last 2-3 years, Pantaloon has tried every option in multi-segment retailing either directly or through acquisitions. Before FDI was allowed in single brand retailing, the company was lobbying with the government to give higher preference to domestic retailers. After that, they are trying to form JV with foreign brands in every possible category. They are already present in more than 25 categories. Multi-segment retailing will definitely add to their topline and bottomline growth."
Source: Rediff Money
Starbucks coffee will be entering India via a partnership with New Horizons Retail Pvt. Ltd, a newly formed Indian company, where Kishore Biyani, MD of Pantaloon Retail will hold 49% of stake. The remaining stake will be held by P T Mitra, Chief Executive of Indonesian specialty retailer Adiperkasa. The JV states that the company would develop and manage a chain of Starbuck Cafés in India.
Starbucks will form a JV via its Singapore based division, Starbuck Investor and initially hold only 18% stake in the company. The company has applied for approval from the FIPB to invest $1.12 million, for the 18% stake, with an option to increase its state to 51% at a later time.
Source: The Hindu Business Line
The search for retail talent is making retailers look deep in the rural areas of the country. While there are no specific figures on the number of people required, the requirement is huge. An average 50,000 sq ft store requires a minimum of 250 people to run it, while at least 10 are required to run a food and grocery supermarket format store. Reliance Retail is planning to have 100 million sq ft of space by the year 2010-11 and the Future Group is planning to double its 30,000 headcount by next year. Future Group prefers to select local population due to knowledge of language and consumer preferences. For its operations in Delhi and Mumbai, the company is looking for talent in the North-East, where knowledge of English is good.
One popular source of talent has been the Livelihood Advancement Business Schools (LABS) that are run by Dr Reddy’s Foundation, which train poor rural high school students in employable skills. McDonald’s, Big Bazaar and Reliance Fresh have all hired manpower from here. Another source of talent is call centers where middle level employees who have good customer service and English skills and do not want to work night shifts. Source: The Economic Times
Shopper’s Stop will be tying up with business schools such as Symbiosis and Manipal Institute, so that its ground level staff can earn professional degrees. According to Govind Shrikhande, CEO, Shoppers’ Stop, "All this time we have had upgradation programmes, but now we intend offering them on a bigger scale. There is a proposal to even offer two-year MBA programmes and we are talking to universities and B-schools such as Symbiosis and Manipal to structure the course and the financing options.''
The company has been doing salary corrections in an effort to retain its staff, with most salaries increasing by 20-35%. As part of the retention plan, the company will be offering career development options to its employees. The company will be investing between Rs. 60,000-80,000 for a graduation program of three years and Rs. 150,000-170,000 for an MBA degree. Source: The Hindu Business Line
Even though everyone is going crazy about the retail boom in India, just as there are several Indias, there are also several sides to the retail boom. While specific segments such as the value and discount retail are thriving, other segments such as middle to high end retail are not doing so well. Walk into any mall during the week and you will see stores with barely any customers at all, while stores such as Big Bazaar are busy at all times of the day.
This is the paradox that is India. While real estate developers have been going crazy setting up malls, there aren’t enough takers as yet, and definitely not enough buyers. A great shake-out awaits the Indian retail industry. According to Deepankkar Sanwalka, KPMG’s executive director, "If the spending power of consumers is high in a locality, it could sustain two-to-three large players."
Organized retail only accounts for 3% of the total retail industry as yet and is estimated to grow to $64 billion by the year 2015. As a result, the retailing space in the country will also rise by 15-20% by 2010. Source: Rediff Money
With the rapid growth of the retail sector in India, logistic companies in India are looking for significant investments to increase their services. At present, this is one area that is lacking in infrastructure and chain components. According to Edelweiss, the 6 main companies in this area: Concor, Gateway Distriparks Ltd (GDL), Allcargo, SICAL, Transport Corporation of India and Gati, are likely to spend more than Rs. 34 billion in the next three years to gear up for the opportunities.
Concor and SICAL are focusing on cold chain logistics, GDL and SICAL are looking towards container trains and TCI and Gati are focusing on warehousing. Edelweiss estimates that the container train segment will receive Rs. 16 billion in the next three years, while warehousing will get Rs. 2 billion, offshore logistics will get Rs. 2.5 billion and trucking will get Rs. 3.8 billion. Source: The Hindu Business Line
The concept of rural malls is picking up and retailers are all rushing to set up stores in rural areas. Consumers in rural areas spend an estimated Rs. 8000 billion each year. In some areas, there is no electricity or drinking water, but villagers are tracking commodity indexes via the ATM. Companies such as DCM Shriram Group are setting up 50 rural retail outlets called Hariyali Kissan Bazaars seeing this vibrant demand.
ITC has set up 12 Choupal Sagars in three states and Reliance is also making plans to enter the sector. Hariyali Kissan Bazaar’s have 400 walk-ins a day, with a 70-80% repeat visitors and generate Rs. 140 million annually. While most products are farm related, soon stores will add construction items, automotive and telecom products due to demand from local customers. Source: CNN-IBN
As major retailers such as Wal-Mart, Tesco and Carrefour make plans to come to India, a US retailer My Dollarstore is already in India and is doing unexpectedly well. While US dollar store chains are located in low-rent strip mall, My Dollarstore lets up shop in prime locations and targets big spenders. Prices at My Dollarstore are higher at $2 instead of $1charged at US stores.
My Dollarstore opened in Mumbai in 2004 and is run by Sankalp Retail Value Stores. Its customers are people who are already familiar with American brands, from bringing home products such as Alberto VO5 hair conditioner, Kellogg’s Pop Tarts and Doritos chips. Source: The Wall Street Journal
The Alpha-Pantaloon JV will be opening its first duty free shop at Delhi's Indira Gandhi International Airport this week. The store will be fully operational by 18-20 January, 2007. The company decided to open its first store in Delhi as the city has higher international arrivals and the amount spent is also of a higher amount. The duty free store at the airport will be located at the arrival terminal and will cover 2,000 sq ft initially, expanding to 7,000 sq ft in a month's time. A store will also be opened at the departure terminal by the end January 2007.
Alpha Airports Group Plc has designed over 140 retail stores in over 40 locations in UK, Europe, USA and South Asia. Alpha runs three duty free stores in Cochin Airport. Its store in Delhi will feature some of the leading brands of the world, such as Gucci, Armani, Christian Dior, Calvin Klein, Nike, and Swatch among others. Source: Indiaretailing.com
Delhi’s most famous fast food chain, Nirula’s is shaking things up. The company that has long been the leader for fast food in north India, will be launching three new formats to connect with niche customers. Nirula’s Express will be its takeaway format and will be in outlets of 200 sq ft, located in airports, railway stations, malls and metro stations. The first of these outlets opened at the Delhi Airport earlier this month.
Nirula’s food courts will on average be 400 sq ft and will be located in malls, movie complexes and large commercial complexes. The first of these is slated to come up in Gurgaon soon. The third new format are Nirula’s ice cream kiosks that will be located in air-conditioned locations and would sell sundaes, shakes, sodas, tea and coffee, besides ice creams.
Nirula’s currently has 42 outlets, all in north India. The company was acquired last year by Navis Capital Partners, a Malaysian based private equity firm, and Mr. Kuckreja. The company also operates hotels and restaurants under the Nirula’s name and casual dining outlets under the Pot Pourri name. Source: The Economic Times
Supermarkets and hypermarkets such as Food Bazaar, Spencers and HyperCity have been pushing their private labels, leading to these lesser known brands to become acceptable by the consumers and even preferable to some consumers. Retailers are now keeping 20-40% of shelf space for private labels. Once only in the food section, private labels are now appearing on other aisles for items such as jams, sauces, soaps, home ware among other items.
Subhiksha has private labels only for its food and grocery section, where it accounts for 20% of its total sales. Another south based retail chain, Trinethra Super Retail, on the other hand, has 70% private goods for goods such as apparel and home linen. Source: The Hindu Business Line
Starbucks will be focusing on Delhi and Mumbai as its starting points for its India operations with Pantaloon. A company official said that Starbucks will be opening outlets by the end of 2007 either in Delhi or Mumbai. While media and other reports have said that Starbucks has already tied up with Pantaloon, there is yet to be a confirmation from either of the companies. Starbucks will be targeting young adults in the metros and hope to catch the trend of coffee drinking in a traditionally tea drinking country. Source: Business Standard
UK companies that are part of a 150 member business delegation have committed to invest in the food processing, agri-retail and manufacturing. The delegation was led by Karan Bilimoria, chief of Cobra Beer, and met several high leaders of the government including Finance Minister P. Chidarmbaram and Planning Commission deputy chairman Montek Singh Ahluwalia.
The delegation was accompanied by UK trade and industry secretary Alistair Darling and is a precursor of the UK Chancellor of the Exchequer and future Prime Minister Gordon Brown's visit to the country. The delegation also met with Bhupinder Singh Hooda, the chief minister of Haryana on investing in some Special Economic Zones (SEZ) in the state. Source: The Economic Times
In an unprecedented move, Congress President Sonia Gandhi has reportedly sent a letter to the Prime Minister Manmohan Singh cautioning him on opening the foreign direct investment (FDI) for retail. The main reason for the concern is based on small-scale operators who are likely to be affected by large international retail firms entering the market. So far, the government has been planning to ease restrictions in FDI in specific sectors, such as sporting goods and electronics. Source: Telegraph, Reuters, The Economic Times
Sonia Gandhi’s letter of concern regarding easing FDI regulations in retail has got support not only from other congress workers but also from the Left party. The primary concern is that opening FDI in retail would render millions of small shopkeepers and their employees as jobless. Source: The Economic Times
The Indian government will be continuing opening up FDI in retail, despite Congress President Sonia Gandhi’s letter to the Prime Minister, giving mixed signals about easing FDI restrictions. A commerce ministry official said, "The FDI policy is not frozen and we are going ahead with our plans." The ministry has reportedly circulated a draft note to increase FDI to 51% for certain categories, such as consumer electricals and electronic goods, sports good and accessories. Source: Rediff Money
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