Retail space seen surging 180% by '07: report

The total retail space in India is set to grow 181 per cent from 32 million sq ft as of August 2005 to 90 million sq ft by 2007, according to a report 'Malls of India' released by Images Multimedia at the India Retail Forum today.

This increase would require an investment of around Rs 40,000 crore. The organised retail industry is growing at an average of 30 per cent per annum and by 2010 is expected to stand at $ 24 billion, around 10 per cent of the estimated size of the overall retail industry, the report said. It is also expected that at least two or three of the Indian players would have crossed the $1 billion mark by then.

Although there is a great deal of bullishness and optimism about the future of the industry, there was a note of caution sounded by BS Nagesh, MD and CEO of Shopper's Stop at the India Retail Forum. "India is set to achieve in five years what other countries did in 25 years, and the process cannot be as smooth as we expect it to be," he said. "Although there is a lot of innovation and enthusiasm in the sector, what is missing are quality assurances and caution and risk elements."

While there will be a large number of jobs created in the sector (2 per over 150 sq ft of retail space) there are not enough trained people which is one of the immediate areas of concern.

"In the enthusiasm to meet consumers' demand, the retailer's demand for both quality personnel as well as a better organised back end is being ignored," he felt.

On the positive side though, it was noticed that there was a lot more depth in organised retail today compared with even a few years ago with newer categories such as petroleum and healthcare also entering the organised retail space in a big way.

Today, the fastest growing categories are food and groceries at about 33 per cent and books and music, which is growing at 24-25 per cent.

Industry representatives will send some recommendations to the government based on the discussions at the forum, the key among would be to allow FII and private equity investment in unlisted companies.