Organised retailing would witness a boom time in the next four years with sectors such as food & grocery, entertainment and infotech leading the pack, a Federation of Indian Chambers of Commerce and Industry (Ficci) commissioned study has said.
"The largest growth in retailing is expected to occur in the field of entertainment driven by consumer preferences towards integrated complexes with a variety of eating and entertainment preferences," the study titled 'Developing India's Capability for Organised Retailing' carried out by consultancy firm KSA Technopak, said.
According to KSA Technopak's projection, food and grocery sectors in retailing would witness a business worth Rs 6,000 crore by 2005. The entertainment and health & beauty sectors would achieve business worth Rs 4,000 crore and Rs 1,000 crore, respectively, the study said.
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Wholesale and retail trade have gainfully employed nearly 2.1 crore in mid-90s, constituting 7 per cent of the total employment generated in the country. According to the study, retailing contributes more than $170 billion to the national income and constitutes about 39 per cent of gross national income.
India has the highest retail outlet density in the world. However, most of these outlets are basically small in size and unorganised. The study said value added at the retailing was low due to huge losses resulting from unorganised industry and the presence of a long chain of middlemen.
"The shift towards organised formats has been happening in all segments of the retail industry such as food & grocery, apparel or furniture. As the Indian markets become more sophisticated, consumer demand would drive the appearance of new formats in non-traditional segments such as car retail and rental, information technology and telecom," the study said.
It also said organised retailing would increase job opportunities in the country over the next ten years with big retail companies entering semi-urban and rural areas.
"Even while automation has severely cut down workforce in the developed countries, retailing has expanded in the country and creating new job opportunities."
"Retailing, after agriculture, is one of the largest creators of employment in the country. However, the share of employment in the retailing remains far below its true potential compared with other developed and developing economies," the study said.
The emergence of the organised retail formats has predominantly been an urban phenomenon. The top 15 cities in the country cater to 33 per cent of the total urban population.
Many retailers are looking at the second level cities as a part of their network expansion. Foodworld, one of the largest food & grocery retailers, is present in Coimbatore and Pune. Nilgiris, another supermarket chain from the southern India, is present in Erode.
Globus, a departmental store chain, is present in Indore and Pantaloon and others are planning to open outlets in Kanpur and Lucknow.