Modern retailers are constantly tweaking their models, and oscillate from the big box format that global retail giants like Wal-Mart are known for to the small neighbourhood stores of the type Subhiksha is known for. Each retailer has a different format, related to its value proposition, but over the past five years, it would appear many of them are looking at a centralised purchase model with small neighbourhood stores. According to ICRIER's report on the retail sector, the Subhiksha model appears to be delivering the best results in terms of sales per square foot "" its realisations are more than double those of the country's top retailer Pantaloon. Not surprising then that, according to ICRIER, there has been a big change in the share of different formats in just the last five years. Department stores that require more space were around 23 per cent of all organised formats in 2001 and this fell to 16 per cent in 2006; supermarkets/convenience stores rose from 12 to 16 per cent. Hypermarkets, though, which typically need a lakh or more square feet, have also increased their share, from zero to 10 per cent in the same period. The way things are evolving, the model could well see another change or two before settling down.
THE RIGHT MODEL
(Subhiksha's model is the most successful) (Data for 2006-07) | | Subhiksha | Trent | Pantaloon | Spencer's | Mother
Diary | Total* | | Sales (Rs mn) | 8,000 | 4,979 | 19,336 | 5,400 | 27,000 | 64,715 | | Sales per sq foot | 13,333 | 6,036 | 6,108 | 7,714 | na | 8,298 | Area (sq ft)
* excluding ITC and Reliance | 600,000 | 825,000 | 3,165,000 | 700,000 | na | 5,290,000 | | Source: Impact of Organised Retailing on the Unorganised Sector, ICRIER, May 2008 |
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