'Address key issues for retail sector growth'

Even as the Indian market is considered the most attractive global retail destination, there are some core issues which need to be addressed to sustain the growth, according to a report on 'Retail in India: Getting organised to drive growth' by the Confederation of Indian Industries (CII) and AT Kearney.

While the organised retail still accounts for 6 per cent of the overall sales in the country, it is expected to grow at a compounded annual growth rate of 35 per cent by 2010.

The report highlights the key issues which stand in the way of overall retail development in India and how the industry and government needs to address the issues.Hemant Kalbag, principal, AT Kearney said,"the government should give retail industry status and should also set up a regulatory body to legislate on industry norms and other aspects."

Simultaneously, it is equally important for the industry to organise itself and work together on aspects such as development of cold chain and cadre of mid-management staff.

"On aspects like gaining consumer insight and developing the markets, it is the retailers who will have to take the initiatives and not the government," he added.

To boost the growth, the government should relook at some of the inconsistencies in the octroi and entry tax structures which vary according to the state. Additionally, lack of proper town planning has resulted in bad retail infrastructure.

High real estate prices also act as stumbling blocks.The report states that these factors have resulted in real estate costs forming about 10-20 per cent of net sales in certain cases, which most people feel is not sustainable.

On the manpower front, some retailers have taken initiatives like having pact with training institutes. But, it is not enough to meet the demand generated by the sector and a more active role is required.