Shop till you drop

RETAIL:The boom has set in the organised retail sector and there is no stopping it, says a FICCI study.

There might be people crying hoarse about how malls will kill small mom and pop stores. But, before you reach any conclusion, think again. The malls have been around for some time now and they don't seem to be making a dent.

According to FICCI's Retail Report 2007, "The size of Indian retail sector is $328 billion with the unorganised retail accounting for the lion's share."

Organised retailing contributes to around 4 per cent of the entire market "" so, mom and pop shops don't need to worry just yet!

The retail market is expected to grow to $427 billion by 2010 and organised retail could account for 20-22 per cent of the market by then, says Technopak.

With more than $30 billion investment being planned by both domestic and foreign players in the space in the next 5-7 years, one can be certain to see huge growth in the organised retail sector.

India's unique market topography ensures that internationally successful formats cannot be replicated in India as such. They need to be tweaked. What India needs is a good mix of different formats and we can see that being reflected in the expansion plans of retailers.

Pantaloon, Big Bazaar, Reliance Fresh and many other similar concepts are changing the way people shop. Of the investments being made in urban India, hypermarkets will see the biggest share at 38 per cent followed by supermarkets at 28 per cent, speciality stores at 22 per cent and cash 'n' carry at 16 per cent, says the Technopak analysis.

Now, a peek at some expansion plans "" Big Bazaar has 36 stores as of today, which it plans to increase to 80 by 2008 and 225 by 2010; Spencer's plans to take their count to 60 hypermarkets from seven at the moment.

Reliance Retail should be up from 100 hypermarkets to 1,000 and 2,300 supermarkets in the next three years; Subhiksha has 450 supermarkets today and plans to take it up to 1,000 by 2008. Many of these players are working on developing multiple formats to tap the growing Indian market.

All of these need space. The FICCI study reveals that India needs to generate at least 110 million sq ft of additional retail space a year for many years to meet the growing demand from this segment. The primary focus for supply of retail space remains the metropolitan regions of Delhi and Mumbai.

According to industry estimates, eight large Indian cities will see a supply of 66 million sq ft of new retail space through over 200 proposed retail centres by the end of 2008. The smaller cities too will not lag behind. The next seven cities will get 13 million sq ft by end-2008. By 2010, mall developments are anticipated to spread across 60 Indian cities.

FICCI has raised issues in its study "" like industry status for the retail sector, incentives for investment, permitting FDI and, of course, single window clearance.

While the industry hopes these will be addressed soon, as of now there is a shortage of quality retail space and rants are high for what is available. But, there is no stopping the Indian shopper.