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2 Retail : Derived from the French word Ơretaillierơ

2 Means : To cut off a piece or to break bulk.

2 Retailer : Defined as a dealer or trader who sells goods in

small quantities, or
one who repeats or relates
2 Retailing : The last stage in movement of goods or services to
the consumer.

2 Retailing can thus be defined as consisting of all such activities

involved in the marketing of goods and services directly to the
consumers for their personal, family or household use
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2 argest private industry in the world, total sales of US$ 6.6 trillion
2 In Western economy it accounts for 8% of the GDP

2 Has generated an 19% return for the shareholders between 2004- 2004-
06
2 In comparison banks generated 9% and insurance generated

15.2% return.
2 argest corporation in the world ƛ Wal-
Wal-Mart is a retail chain
2 Almost 50 retail organizations in the world feature in the list of

Fortune 500 companies.

2 The world over retail is not only the oldest but also one of the most

advanced user of technology.

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2 From customers point of view, retailer serves by providing

goods that he needs in the required assortment and at the
right place and time.

2 From an economic standpoint the role of a retailer is to

provide real added value or utility to the customer.

2 This comes from five different perspectives

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2 First utility arises from the need of providing a finished goods

and services in the form that is acceptable to the customer

2 The retailer performs the function of storing the goods, and

providing us with an assortment of products in various
categories

2 The retailer creates time utility by keeping the store open when
the consumers prefer to shop

2 By being available at a convenient location he creates place

utility

2 Finally when he products are sold ownership utility is created

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All these are real benefits which the Retailer offers by

2 Being close to potential customers

2 Fully understanding the motivating factors that drive their

customers

2 By serving the consumers by way of functioning as a marketing

intermediary and creating time, place and ownership utility
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The Retailer also serves the manufacturers by

2 Performing the function of distributing the goods to the end

users

2 Creating a channel of information from manufacturer to the

consumer

2 By serving as a final link in the distribution chain

2 Recommending products where brand loyalty is not strong or

for unbranded products.

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2 D
 
cu
e
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2 India boasts of the worldƞs largest retail network, 12 million outlets
2 India being se ond largest onsumer market in the world stands
benefited
2 96% of total number of retail outlets have an area of les than 500 sq.ft.
and the per apita retail spa e in India is a mere 2 sq.ft.
2 Trade is highl fragmented and is known the world over as highl
unorganized and in nas ent form
2 However, the realit is that apart from agri ultural produ ts even
manufa tured goods are available in the remotest orners of India
2 As retail is not regarded as an industr in India it is diffi ult to get a
orre t pi ture of the size of this se tor
2 As per estimates given b the Central Statisti al Organization the total
private final onsumption ependiture in India was Rs.15,000 billion in
2001--2002
2001
2 Consumption patterns indi ate how mu h has been sold
2 In retail ontet it would indi ate the kind of retail outlets that are likel
to grow
 

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2 India Government set up public distribution system faced with the task
of providing basic grains to the mass populace ƛ ration shops

2 State run retail stores were set up such as Khadi & Village Industries
Commission stores (KVIC). As on date there are more than 7,000 stores
across the country.

2 The co-
co-operative movement was championed by the government, which
set up Kendriya Bhandars in 1963. As on date they operate from a
network of 112 stores and 42 fair price shops across the country.

2 Mother diary another early starter controls as many as 250 stores selling
foods and provisions at attractive prices

2 In Maharashtra, Bombay Bazaar, which operates stores under the label

Sahakari Bhandar and Apna Bazaar runs a large chain of co-
co-operative
stores

2 First attempts at organized retailing were noticed in the tetile sector

 
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2 In India, Retail Sector is classified into two broad

categories

1. Food
2. Non Food

2 Through this classification one can see a phenomenal

change that has occurred in retail in India

2 Key Players have emerged in various sectors over the past

ten years
 
 

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2 In India, organized retail is a little over a decade old
2 It is largely an urban phenomenon
2 However the pace of growth is still slow

Reasons for slow growth in retail

1. Retail not being recognized as an industry in India

- Hampering the availability of finance to eisting and new
players
- Hence affecting growth and epansion plans

2. High costs of real estate

- ease or rent of property is major area of ependiture
- This eats into the profitability of a project
  
 

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3. ack of adequate infrastructure
- Poor roads, lack of cold chain infrastructure
- Eisting supermarkets and food retailers have to invest substantially in
building cold chain infrastructure

4. Multiple and comple taation system

- Sales ta rates vary from State to State
- Organized players have to face multiple point control and ta system
- Ta evasion by small stores
- Hence it becomes epensive to transfer goods from one store to
another

5. Foreign direct investment

- FDI in pure retailing is not permitted
- One of the prime reason for slow growth of retail in India
- Global retailer can enter only by way of a franchise with Indian partner
or through technological alliances
 
 


2 Bright future ahead

2 What one sees today is only the tip of the iceberg
2 Epansion from urban to B Class towns will see the emergence of
region specific formats which will be scaled down
2 arge discount stores are bound to emerge as they will cater to mass
market
2 Thus penetration in the lower income groups
2 This is the format that is most likely to meet the consumerƞs demands
for Ơincreased value for moneyơ offerings
2 The new agreement on tetiles and clothing (ATC) will see large
number of international retailers setting shop in India
2 Indian retailers would have to become consumer-
consumer-centric in true sense
2 Retailers will have to reinvent themselves and have to go beyond the
traditional products and services