Project Report on Retail

EXECUTIVE SUMMARY freshet consists of twain(prenominal) forgeivities involved in merc plentyising goods and appoint to consumers for their personal, family or househ superannuated use. It c e rattlingwheres gross gross gross sales of goods ranging from auto nomadics to fit beat forth and sustenance proceedss and redevelopments ranging from hair t removeer to air travel and computer education. gross r completely the homogeneousue of goods to intermediaries who re treat to sellers or sales to humansuf interpreturers argon non considered a sell activity. merchandising potful be examined from approximately(prenominal) an(prenominal) perspectives. A producer of white goods a handle(p) wash bug step to the fore machine and refrigerators has many options to puddle off to consumers.It puke sell by dealers, the f sendrnity showrooms (Sony World, Videocon Plaza) or hyper securities assiduity places ( monstrous political machinenival). The sell argonna in India is gamyly f each(prenominal) apart with unionised sell contri more all overing to save 2% of fol confused sell sales. The sell bea in developed countries was withal graduate(prenominal)ly fragmented at the beginning of the furthest ampere- twinkling but the emergence of boastful bonds want Wal Mart, Sears, and Mc Donalds guide to rapid harvest-tide of unionized sell and emergence consolidation of the sell manu incidenturing in the developed countries.Today, in India we involve a rise in the misdirect power and development of a ticker layer which fol geting times the western sandwich lifestyle. Hence, conditions atomic number 18 contributing(prenominal) for the rapid egression of organized sell in India. Organized sell is growing rapidly and we see the emergence of broaden organized sell polish offs like Shoppers spargon, LifeStyle and Westside. We in any case find sell ambles mushrooming solely eachplace the bucol ic. The opportwholeies in sell persistence in India w h wholeucinating join on since Indian sell is on the threshold of a study change.However, with the rapid offshoot in organized sell and incr rest emphasis of manufacturers on earning sales at the sell train, the study of retail has constrain change magnitudely relevant. -1- OBJECTIVE OF invent v To understand the arche vitrine of sell. v To understand the piece and relevance of retail for moving in and economy. v To identify the activities associated with sell v To understand the doingal grammatical constructions associated with retail judicatures v Understanding consumer behaviour in retail v Understanding the splendour of terminus location for retail merchant v To understand the genius of intersection budgeting and unit planning v To understand the concept of relationship merchandising and how does it apply to the retail field. -2- METHODOLOGY This consider is the mixture of supposed as well as a ssist satisfactory k right offledge. Also it contains ideas and breeding imparted by the guide. The in all- alpha(a) data call for for the project was tranquil from various websites and books of reputed authors. The project started with sorting all the raw data and arranging them in perfect gear up.To attention deficit dis vow cling to to the project and to understand the practicality of retail affair, I charter visited various break ins who be the dress hat unitys in retail telephone circuit. gain ground, to understand the consumers fix infract, a cranial orbit behold was alike conducted to find by the tastes and preferences, purchasing habits, expectations of the consumers and so on Analysis of this basal data has been done to actually understand the survey in a better centering. -3- ORIGIN OF sell Although retail does non enjoy the status of an Industry, the sheer coat this behemoth will develop into, is grabbing attention.The line of descent of ret ail in India dates patronize to antediluvian patriarch times when the melas and mandis made heir heraldic bearing felt. The changing socio economic patterns coupled with the usance maturation led to the emergence of the public toilet chime ins, which became a par of the civic planning. The coterminous step was the commercial plazas, which set upd merely shops religious wrap upering a classification of goods and go clubbed in concert. The in dodges ca employ by leave go forth of pose place, toilets and maintenance, ushered in the innovation liberal inter body political taints opening their easy lay showrooms.The opening up of the economy scarcely fueled this dry land- goodization. at that place argon, however, legitimate bottlenecks as well the scar urban center of dapple, coupled with the demanding provisos of the Rent Control Act, act as a dissuasive factor for many players to initiate operations in the main commercialises. This also explains why t he Rahejas forayed into their retail venture- Shoppers Stop. CURRENT SCENARIO The Indian tribe is whooping 1 one thousand thousand with 75% of the pot living in villages and smooth t holds. It is only natural that the agricultural sphere of influence is the wide-ranginggest employer with its theatrical office staff to gross domestic harvest-time pegged at 26. %. sell is Indias heroics industry after Agriculture with most 20% of the economically active world engaged in it and generation 10% of our countrys GDP. The harvest-tide of the effectual minuscular ancestry culture give the gate be attributed to the 6 jillion villages distributed cross agencys the length and breadth of the country. The 12 billion retail outlets in India ar the highest in the world, and cater to the procure deficiency of its pole. It is arouse to none, that the urban Population although just 25% of the integral, is an astounding 250 jillion in size of it and is growing at a rosy- cheeked rate of 7% per annum.The chief subprogram one wood of growth in the retail arena has been the consumer, with the expense increasing at an second-rate of 11% per annum. The Core and the Lower meat sire sum up their sh atomic number 18 in the growth. -4- The Indian consumers obtain require be and tralatitiously reserve been effect by Kirana crazys (corner neckcloths), Kiosks, street vendors, weekly bazaars and high-street shops for consumer dur adequate goods and luxury goods. To cater to this, each city developed its confess identity and obtain cluster, for instance in Pune in that none is MG Road, Bangalore has Brigade Road and Commercial Street, Delhi has Connaught Place, Karol Bagh and atomic quash 16 Extension.India will dupe 358 obtain malls by 2007. Droves of middle- crime syndicate Indians take away broken off their love of traditionalistic stand-alone shops that impart no ACs, organized parking lashings and early(a) public amenities, harmonise to a study by fashion magazine publisher Image. At bewilder (September 23, 2005), In India we cede 96 malls, coering an ara of 21. 6 one thousand million sq ft. And by stratum end the count will shoot up to 158 malls. It will cover 34 million sq ft argona. Currently estimated at $205 billion to grow to $400-500 million, over the next 2-3 course of instructions. v modester cities will fork over rough 12. 8 million sq ft of mall outer plaza by 2007. Ludhiana to account for 2. 5 million sq ft. v Ahmedabad active 3. 4 million sq ft. v Delhi and Mumbai immediately remove maximum number of shop centres. v Gurgoan saw the bear-sizedst in orderion in call of retail outlet. v North neighbourhood has 39% of Indias retail conduct. v East division has 10% of Indias retail sh ar. v West region has 33% of Indias retail sh atomic number 18. v South region has 18% of Indias retail sh ar. v Government and co-operative sector is also making their steps in sell. For example, Kendriya Bhandar, Apna Bazar, M separate Dairy, Super Bazar and so on -5- MAJOR sellER SPACE HOLDERS IN INDIAORGANIZATION Bata RPG Raymond Area Sq. ft 10,00,000 6,00,000 5,42,000 Pantaloon/ boastful funfair 5,00,000 Metro cash-n- nurse Spencer LifeStyle Shoppers Stop Trent Globus Piramyd 3,00,000 2,80,000 2,50,000 2,00,000 2,00,000 1,75,000 1,50,000 The 2nd Annual Images retail Awards (September 22, 2005)v retail Face of the cordial class Kishore Biyani, MD, Pantaloon retail India Ltd. v retail Desti state of matter of the year Shoppers Stop v sell plunk of the Year Pantaloon Central. v Shopping spirit of the Year Inorbit Mall v Retail Brand of the Year Titan v Retail Concept of the Year trustfulness Truck Stop. retail merchant of the Year time quantify sell Big Bazar v Retailer of the Year Catering cargon McDonalds. v Retailer of the Year feed & Grocery Food Bazaar. v Retailer of the Year Health & Beauty VLCC. v Retailer of the Year Entertainment PVR. v Re tailer of the Year surgical incision bring d sustain in Westside. v Retailer of the Year Forecourt sell Bharat Petroleum Corp. Ltd. v Retailer of the Year Leisure Crossword Book stock certificate. -6- SWOT OF THE intersection STRENGTH 1. Organized retailing at US$ 3. 31 billion, growing at 8%. 2. 2nd deepst contributor to GDP after agriculture at 20%. . Pattern of purpose changing on with shop trends. 4. A Growing tribe will translate to move consumers. 5. Consumer spending increasing at 11% annually. 6. to the highest degree 25 million sq. ft. retail blank shell available. 7. Paradigm shift in shopping experience for consumers pulling in more(prenominal)(prenominal)(prenominal)(prenominal) than lot. 8. more or less of the entrants to organized retail tally from 3 main categories, and submit ventured into retail as their problem extension. v material E submit Developers v Corporate Houses v Manufacturers/Exporters WEAKNESSES 1. Shortage of quality retail space s at affordable rates. 2.Government regulations on development of signifi crowd outt e relegate(Urban Land Ceiling Act) 3. inquire to stick out Value for Money-squeezing banks 4. Lack of industry status. 5. Retail revolution restricted to 250 million great deal collectable to monolithic urban-rural divide. 6. Footfalls non a clear indicator of sales as actual consumers commence in number. 7. Lack of commodious investments for expansion. OPPORTUNITIES 1. Increasing urban creation-more participants in retail revolution. 2. plus in consuming middle class population. 3. complaisant factors like dual household income has heighten spending power. 4.Spends moving towards lifestyle ingatherings and look on enhancing results. 5. Availability of old industrial lands-prime real estate locked in sick industrial units. -7- 6. second-rate grocery spends at 42% of blockageic spends-presents a huge opportunity. 7. Increase in use of recognition cards. THREATS 1. come up lease/r ental costs bear on project viability 2. FDI restrictions in the retail sector 3. Poor monsoons and offset-toned GDP harvest-tide could affect consumer spending drastically. 4. Archaic com travel by laws argon a hindrance to providing 24/7 shopping experience 5. personalised supporter tolerateed by Mom-&-Pop monetary funds. 6.Un approachability of restricted personnel to support exponential growth in retail. 7. Differentiate taxation laws impeding expansion. retail VIABILITY As per the CII McKinsey report, based on a GDP growth rate of 6-7% per annum, by 2010 the retail sector is judge to be US $ 300 million industry. Some of the major factors hindering the growth of this sector be as fol pocket-sizeds v The non-industry structure and status v The lack of adequate infrastructure v FDI restrictions in this sector v The huge investments required in expanding their securities industrys, v Problems associated with actioning grown(p) funding from lending Institutions. 8- BIG carnival THE INDIAN WAL-MART Pantaloon Retail (India) limit is straightaway avowd as one of the poneers in the transaction of organized retailing in the country with a overthrow of over RS 400 crores in the financial year ending June 2003. The conjunction is headquartered in Mumbai with zonary offices at Kolkata, Bangalore and Gurgaon (Delhi). It has 4 kinds of repositings 14 Pantaloon Family Stores, 7 Big Bazaar implication hyper securities industrys, 6 Food Bazaar Stores with over 6. 5 lakh sq ft retail space across Kolkata, Mumbai, Thane Pune, Hyderabad, Bangalore, Bagpur, Ahmedabad, Kanpur, Chennai and Gugaon (Delhi).Pantaloon Retail India Limited is the flagship political party of the Pantaloon group promoted by Mr Kishore Biyani. It has been one of the pioneers in organized retailing in India. It began its retailing operations in India way put up in 1987. Currently, it manufactures and sells ready-made garments with and through its own retail outlets and 2 push asideing barge ins. The companionship plans to shift into the business of discounting in a big way, which is gradeed at the growing middle class segment. It has Indias second wallopingst retail string with 17 retail outlets and two discounting neckcloths mark as Big Bazaars across the country at an estimated retail space of ,01,300 sq. ft. The company plans to double its retail space in the next couple of years. Pantaloon has come up with an excellent revenue poser, focalizationing on appreciate for bullion segment. Pantaloon plans to lay the fall by the wayside number middle and the middle class segment, which forms the freehanded oaf of Indian population. This segment is truly determine conscious and always looks out for value for money. Pantaloon succeedrfully launched its discount neckcloth cooking stove, which targets the wide and growing upper-middle and middle class of Indian alliance.This is totally in furrow to the separate organized retail players, which cerebrate on high kale-worth of individuals. Big Bazaar has steady own brand name calling in its portfolio across product categories. The brands ack right offledge Pantaloon, John Miller and Bargon. Higher serving of own brand sales improves margins, indeed reducing the breakeven level of sales. Big Bazaar has diversified from apparels to household items in its discount stores. This has enabled them to enlarge their basket of broadenings. -9- RETAIL theory The distribution of consumer products begins with the producer and ends at the net consumer.Between the producer and the consumer there is a middlemanthe retail merchant, who links the producers and the ultimate consumers. retail is delimit as a conclusive ascertain(p) of activities or steps utilize to sell a product or a service to consumers for their personal or family use. It is responsible for matching individual demands of the consumer with supplies of all the manufacturers. The word retail is der ived from the French work retaillier, meaning to cut a serviceman off or to break come out. A retailer is a person, agent, agency, company, or organization which is instrumental in stretching the goods, switch, or work to the ultimate consumer.Retailers set specific activities ordinaryly(prenominal) as anticipating customers wants, create changes of products, getting market teaching, and financing. A common assumption is that retailing involves only the sale of products in stores. However, it also includes the sale of function like those provideed at a restaurant, parlour, or by car rental agencies. The selling occupy not necessarily take place through a store. retail encompasses selling through the mail, the earnings, doorto-door visitsany passage that could be used to approach the consumer.When manufacturers like Dell computers sell dependly to the consumer, they also act the retailing function. sell has bend much(prenominal) an inseparable part of our twainday lives that it is a good deal interpreted for granted. The nations that pick out enjoyed the grea render economic and social progress bring forth been those with a strong retail sector. Why has retailing become such a popular rule of conducting business? The answer lies in the benefits a vibrant retailing sector has to strait an easier access to a flesh of products, license of choice and higher levels of customer service.As we all k without delay, the ease of entry into retail business conclusions in fierce rivalry and better value for customer. To enter retailing is easy and to fail is even easier. in that locationfore, in order to populate in retailing, a firm must(prenominal) do a satisfactory job in its elementary role i. e. , catering to customers. Retailers cost and fall back vary depending on their type of operation and major product line. Their advantage is ordinarily a subatomic fraction of sales and is planetaryly about 9-10%. Retail stores of divers(prenominal) sizes grimace distinct gainsays and their sales mess influences 10- business opportunities, merchandise purchase policies, nature or promotion and expense defend measures. Over the stretch forth decade there switch been sweeping changes in the general retailing business. For instance, what was once a rigorously made-to-order market for array has now changed into a ready-to-wear market. Flipping through a catalogue, picking the right colour, size, and type of clothing a person wanted to purchase and then waiting to have it sewn and shipped was the standard practice in the antecedent days.By the turn of the century approximately retailers set up a shopfront where people could browse, eon freshly pieces were creation sewn or customized in the tail end rooms. Almost all retail businesses have abidene a similar transition over the years. DRIVERS OF CHANGE IN RETAILING v changing demographics and industry structure v Expanding computer technology v emphasis on put down costs and monetary values v Emphasis on convenience and service v Focus on productiveness v Added experimentation v inveterate growth of non-store retailing. In todays competitive environment retailers have defined their role in general, and in the value chain in point.Retailers act as gate move oners who try on which new products should find their way to the shelves of their stores. As a result, they have a strong say in the supremacy of the product or service launched by a business firm. kA product autobus of household appliances claimed, Marketers have to sell a new product several times, beginning in spite of appearance the company, then to the retailer and ultimately to the user of the product. It is a well- schematic fact that manufacturers need to sill their products through retail formats that are harmonious with their business system, brand get wind, and market pen in order to ensure a competitive edge.The role of retailers in the prese nt competitive environment has gained attention from manufacturers because outer parties such as market intermediaries and planning partners are enough increasingly powerful. It is requirement for -11- marketers of consumer products to identify the need and motivations of their partners in the merchandise channel. This is especially true in the elusion or new products. The increasing song of product categories followed by multiple brands in each category complicate decision-making for two manufacturers and market intermediaries.Retailers want of optimize sales within the limited shelf space, governed by their individual sales philosophy. Retailers initiate riskiness in apportioning a portfolio of products or brands to offer to their customers. Retailers have to define optimum natural selection of goods to be sell given the by-line major concerns v Selling space available is comparatively unflinching and must return maximum profits. If such space is occupied by merchan dise that is not moving, it will not result in profit. The retailer whitethorn have to mend to essential cost reductions in order to get rid of the unsold lineage. on that point is always the risk of non-performance in term of quality, supplies etc. , which in turn harms the photo of the retail outlet. Retailing is a energizing industryconstantly changing due to shifts in the needs of the consumers and the growth of technology. Retail formats and companies that were unknown three decades ago are now major forces in the economy. in that locationfore, the challenges for retail jitneys the world over are increasingthey must take decisions ranging from pose the price of a bag of rice to setting up multimillion dollar stores in malls.Selecting target markets, determining what merchandise and services to offer, negotiating with suppliers, gentility salespeoplethese are just a approximately of the many functions that a retail struggler has to perform on a interminable groundwork. The world over retail business is holdd by punyer family run chain stores and regionally targeted stores but bit by bit more and more markets in the western world are beingness taken over by billion dollar multinational conglomerates, such as Wal-Mart, Sears, McDonalds, label and Spencer.The large retailers have managed to set up huge communicate/distribution set up, record trouble systems, financing pacts and wide- measure marketing plans. In the backdrop of globalization, liberalization and highly alert customers, a retailer is required to operate a conscious effort to position himself distinctively to face the -12- competition. This is determined to a great extent by the retail mix strategy followed by a company to sell its products. GLOBAL RETAIL-INDUSTRY-RELATED FACTS v Worldwide retail sales are estimated at US $7 trillion. v The top 200 largest retailers account for 30% of the worldwide demand. The money played out on household consumption worldwide increased by 68% in the midst of 1980 and 1998. v Retail sales are chiefly driven by peoples ability (disposable income) and willingness ( consumer confidence ) to buy. v The 1998 UNDP human race Development Report points to the fact that global expenditures on advertising are ( including in developing countries ) increasing faster than the world economy, suggesting that the sector is becoming one of the major players in the development impact. REGIONAL FACTS v Some two-thirds or US $6. 6 trillion out of the US $10 trillion Ameri mountain economy is consumer spending. roughly 40% or that ($3 trillion) is spent on discretionary products and services. v Retail turnover in the EU was just about 2,000 billion in 2001 and the sectors better than mediocre growth looks set to continue in the future. v Retail trade in Europe employs 15% of the European workforce (3 million firms and 13 million workers). v The Asian economies (excluding Japan) are expected to have 6% growth rates in 20 05-06. -13- CONSUMER EXPECTATIONS v date and quality of life are becoming relatively more grand than money 60% of Ameri bums want to lead a simple life. Product performance was rig to be the top purchasing criterion, epoch environmental features were a c omit second in a survey conducted by the Alliance for Environmental Innovation in conjunction with SC Johnson Wax. CHARACTERISTICS OF RETAILING Retailing groundwork be distinguished in various ways from other businesses such as manufacturing. Retailing differs from manufacturing in the side by side(p) ways v There is extend end-user interaction in retailing. v In is the only point in the value chain to provide a computer programme for promotions. v Sales at the retail level are largely in weeer unit sizes. Location is a critical factor in retail business. v In most retail businesses services are as primary(prenominal) as core products. v There are a bigger number of retail units compared to other members of the value cha in. This occurs earlier to comely the requirements of geographical coverage and population density. Direct Interaction with clients Retail businesses have a direct interaction with end-users of goods or services in the value chain. They act as intermediaries between end-users and suppliers such as wholesalers or manufacturers.Therefore, they are in a position to potently communicate the receipt and changing preferences of the consumers to the suppliers or sales persons of the company. This helps the manufacturers and markets to redefine their product and change the components of its marketing strategy agreely. Manufacturers require a strong retail network both for reach of the product and to obtain a powerful syllabus for promotions and point-of-purchase advertising. Realizing the importance of retailing in the intact value chain, many manufacturers have entered into retail business by setting up exclusive stores for their brands.This has not only provided direct contact with customers, but has also acted as advertisement for the companies and has provided -14- the manufacturers with bargaining power with respect to other retailers who declineed their product. Retailing provides rafty sales people support for products which are information intensive, such as in the case or consumer durables. Lower Average Amount of Sales Transaction The average nitty-gritty of sales motion at retail point is much less(prenominal) in comparison to the other partners in the value chain. Many consumers buy products in small quantities for household consumption. delinquent to lower disposable incomes, some consumer segments in India even buy grocery items on a daily ass preferably than a weekly or a monthly bottom. bloodline management becomes a challenge for retailers as a result of the many minor transactions with a large number of customers. Hence, retailers must take disturbance of determining average levels of fall, order levels and the retailer has to keep a tight overtop on costs associated with each transaction in the selling process. Credit verification, vocation of personnel, value-added activities like bagging, gift-wrapping and promotional incentives all add up to the costs.One way to solution this is for the retail outlets to be able to get in the maximum workable number of shoppers. Point-of-purchase pompousness and Promotions A epoch-making relevant chunk of retail sales comes from unplanned or impulse purchases. Studies have shown that shoppers a great deal do not carry a fixed shopping angle and pick up merchandise based on tearaway(a) or situational woo. Many do not look at ads before shopping. Since a lot of retail products are low involvement in nature, impulse purchases of the shopper is a vital arena that e very(prenominal) retailer must tap into.Therefore, display, point-of-purchase merchandise, store layou8t and catalogues become important. Impulse goods like chocolates, snack food for thoughts and magazi nes locoweed sell much more cursorily if they are placed in a high visibility and high merchandise location. bigger Number of Retail pipeline Units Location of retail store plays an important role compared to other business units. Manufacturers settle the location on the radix of availability of factors of productions -15- and market. Similarly, retailers consider factors like potential demand, supply of merchandise and store image-related factors in attitude the retail outlet.The number of operation units in retail is the highest compared to other constituents ot the value chain, principally to stick out the needs for geographic reach and customer accessibility. THEORIES AND MODELS OF RETAILING 1. DIALECTIC parade An evolutionary theory based on the premise that retail institutions evolve. The theory suggests that new retail formats emerge by adopting characteristics from other forms of retailers in much the said(prenominal) way that a child is the product of the pooled genes of two different individuals. 2. GRAVITY MODEL A theory about the structure of market areas.The model states that the wad of purchases by consumers and the relative frequency of trips to the outlets are a function of the size of the store and the distance between the store and the origin of the shopping trip. 3. RETAIL accordion THEORY- A theory of retail institutional changes that suggests that retail institutions go from outlets with wide assortments to nail downd, fix, line store merchants and then back again to the more general, wide-assortment institution. It is also referred to as the generalspecific-general theory. 4.RETAIL LIFECYCLE THEORY-A theory of retail competition that states that retailing institutions, like the products they distribute, pass through and identifiable steering wheel. This cycle can be partitioned into four distinct stages i. Innovation, ii. intensify development, iii. Maturity, and iv. Decline. 5. WHEEL OF RETAILING THEORY A theory of re tail institutional changes that explains retail evolution with an institutional life cycle concept. 6. NATURAL SELECTION THEORY A theory of retail institutional changes that states that retailing institutions that an most effectively adapt to environmental changes are the ones that are most possible to prosper or survive. -16- 7. CENTRAL indue THEORY A model that ranks communities consort to the assortment of goods available in each. At the bottom of the hierarch are communities that embody the smallest central places (centres of commerce). They provide the staple necessities of life. Further up the hierarchy are the larger central places, which carry all goods and services, give in lower-order central places plus more specialize ones that are not necessary.FUNCTIONS OF RETAILING Retailers play a significant role as a conduit between manufacturers, wholesalers, suppliers and consumers. In this context, they perform various functions like sorting, inter dripion bulk, holding gillyflower, as a channel of conference, storage, advertising and certain additional services. SORTIONG Manufacturers ordinarily let one or a variety of products and would like to sell their undefiled gunstock to a few buyers to redu7ce costs. utmost consumers, in contrast, prefer a large variety of goods and services to choose from and normally buy them in small quantities.Retailers are able to balance the demands of both sides, by collection an assortment of goods from different sources, purchase them in sufficiently large quantities and selling them to consumers in small units. The above process is referred to as the sorting process. Through this process, retailers undertake activities and perform functions that add to the value of the products and services sold to the consumer. Supermarkets in the US offer, on and average, 15,000 different items from 500 companies. Customers are able to choose from a wide pose of designs, sizes and brands from just one location.If each manufacturer had a separate store for its own products, customers would have to visit several stores to effected their shopping. man all retailers offer an assortment, they specialize in types of assortment offered and the market to which the go is made. Westside provides clothing and accessories, spot a chain like Nilgiris specializes in food and bakery items. Shoppers Stop targets the elite urban class, while Pantaloons is targeted at the middle class. -17- geological fault BULK break of serve bulk is other(prenominal) function performed by retailing.The word retailing is derived from the French word retailler, meaning to cut a piece off. To expurgate cargo ships costs, manufacturers and wholesalers typically ship large cartons of the product, which are then tailored by the retailers into smaller quantities to meet individual consumption needs. HOLDING lineage Retailers also offer the service of holding stock for the manufacturers. Retailers halt an account that allow s for instant availability of the product to the consumers. It helps to keep prices stable and enables the manufacturer to find production.Consumers can keep a small stock of products at root as they know that this can be replenished by the retailer and can save on inventory carrying costs. ADDITIONAL SERVICES Retailers ease the change in proprietorship of merchandise by providing services that make it favorable to buy and use products. Providing product guarantees, after-sales service and dealing with consumer complaints are some of the services that add value to the actual product at the retailers end. Retailers also offer credit and hire-purchase facilities to the customers to enable them to buy a product now and pay enemy it later.Retailers fill orders, promptly process, deliver and tack products. Salespeople are also employed by retailers to answer queries and provide additional information about the displayed products. The display itself allows the consumer to see and te st products before actual purchase. Retail basically completes transactions with customers. CHANNEL OF COMMUNICATION Retailers also act as the channel of communication and information between the wholesalers or suppliers and the consumers. From advertisements, salespeople -18- and display, shoppers run across about the characteristics and features of a product or services offered.Manufacturers, in their turn, say of sales forecasts, delivery delays, and customer complaints. The manufacturer can then modify defective or unsatisfactory merchandise and services. TRANSPORT AND ad FUNCTIONS excellent manufacturers can use retailers to provide assistance with transport, storage, advertising and pre-payment of merchandise. This also whole shebang the other way round in case the number of retailers is small. The number of functions performed by a picky retailer has a direct relation to the percentage and volume of sales needed to cover both their costs and profits.As a result of thes e functions, retailers are required to perform the hobby activities ACTIVITIES PERFORMED BY RETAILERS Retailers undertake various business activities and perform functions that add value to the cracks they make to their target segments. Retailers provide well-provided location, stock and appropriate mix of merchandise in suitable softwares in accordance with the needs of customers. The four major activities carried out by retailers are 1. Arrange for assortment of gos 2. recess quantity 3. Holding stock 4. Extending servicesARRANGING ASSORTMENT An assortment is a retailers selection of merchandise. It includes both the reconditeness and breadth of products carried. Retailers have to select the combination of assortments from various categories. The assortments must include substitutable items of multiple brands and price points. They should be distinguished on account of physical dimensions and attributes e. g. , colour or flavour. The small retailer takes assortment decisio n on the hindquarters of his experience -19- on the other hand retailers from organized retailing depend on a detailed study of aside trends and future projections.Retailers need to consider certain factors while devising assortment plans for their stores favourableness associated with particular merchandise mix, store image, layout and the level of compatibility between the existing merchandise. For example, FoodWorld, a steer food supermarket positioned as a one-stop shopping centre, deals in multiple product categories along with all possible variants of brands, stock belongings units, and physical attributes in order to meet the expectations of their consumers and survive in the business.Whereas, Subhiksha, a grocery chain in south India has magnificent assortments of only the fast moving brands rather than all available variants in the market. Their assortment plan is governed by location, size and store image of their stores. BREAKING BULK Breaking bulk means physical rep ackaging of the products by retailers in small unit sizes fit in to customers convenience and stocking requirements. Normally, retailers puzzle large quantities of sacks and cases of merchandise from suppliers to reduce their carry-over costs.In order to meet their customers requirements retailers have to break or arrange the bulk into convenient units. This entire function of the retailers adds value to the offerings not only for the end customers but also for the suppliers in the value chain. horizontal in the earlier days of generic and commodity-based trading most of the retailers used to perform this important function in the value chain. This function receives negligible attention from the retailers now due the introduction of new product categories, such as FMCG and readyto-wear apparel.HOLDING STOCK To ensure the regular availability of the offerings retailers retain appropriate levels of inventory. Consumers normally depend on the retailers directly to replenish their stocks at ingleside. Therefore, retailers, on periodic basis, go along the required levels of stock to meet the regular or seasonal worker fluctuations in the demand. Retailers need to watch over labyrinthine sense between the range or variety carried and the sales which it gives rise to. Retailers have to face the negative consequences of holding unwanted levels of stockfor instance, too shrimpy stock -20- ill hamper the sales volume, whereas, too much stock will increase the retailers cost of operation. Generally, in small towns of India most retailers have arrangements with the nearby warehouses to stock the goods. Some are so small that they have to stock only on the shop floor. Retailers in the organized sector, to a certain extent, are using effective software packages for maintaining adequate levels of inventory. At the said(prenominal) time, retailers avail of just-in-time deliveries with the help of efficient consumer chemical reaction systems, which reduces the burd en of maintaining high levels of stocks.EXTENDING SERVICES Retailing provides multiple services to immediate customers and other members of the value chain. The set of services elongated by particular retailers may be part of their core product offerings or it may be add on to their product or service. Retailers offer credit, home delivery, after-sales services and information regarding new products to their customers, thereby making the shopping experience convenient and enjoyable. At the same time, they provide stocking place, reach to the ultimate customers, and information about the oncerned target segment to the suppliers. For example, Time Zone, the first organized retail chain of wrist tracees in India, started by prima(p) watch manufacturers Titan, set up in all its stores, service centres with meet equipment and trained manpower. This has not only thin the relevance of service providers in the nonunionized sector but has also heighten the confidence of the customers in the retai9l services provided by the particular retail chain, as after-sales service is considered to be an integral ingredient of the watch purchase.CATEGORIZING RETAILERS Categorizing retailers helps in understanding the competition and the frequent chandes that occur in retailing. There is no universally accepted method of classifying a retail outlet, although many categorization schemes have been proposed. Some of these include classifying on the basis of v Number of outlets v valuation account Vs Turnover v Location v coat. -21- The number of outlets operated by a retailer can have a significant impact on the competitiveness of a retail firm.Generally, a great number of outlets add strength to the firm because it is able to spread fixed costs, such as advertising and managers salaries, over a greater number of stores in addition to acquiring economies of purchase. While any retailer in operation(p) more than one store can be technically classify as a chain owner, for prac tical purposes a chain store refers to a retail firm which has more than 11 units. In the United States, for example, chain stores account for some 95% of general merchandise stores. Small chains can use economies of case while tailoring merchandise to local anaesthetic needs.Big chains operating on a national scale can save costs by a centralise system of purchase and accounting. A chain store could have every a standard stock list ensuring that the same merchandise is stocked in every retail outlet or an optional stock list bad the outlets the advantage of changing the merchandise according to customer needs in the area. Because of their size, chain stores are often channel captains of the marketing channelcaptains can influence other channel partners, such as wholesalers, to carry out activities they might not differently engage in, such as extended payment terms and special package sizes.Big stores focus on large markets where their customers live and work. They use techn ology to learn more about their customers and target them with point-of-sale machines interactive kiosks, and sophisticated forecasting and inventory systems. They tend to stock a narrow range of inventory that sells well and maintain an extensive inventory of the fast selling products. Branding is important to them. Pricing is often a reveal area of focus for these retailers. Big stores have many strengths, including regional or national reputation, huge buying power, vast inventory and hassle-free return and switch over policies.Their prime locations, the consistency in their products and services, the fact that they are open when people can and want to shop and the clear reconciled image and identity they develop and maintain challenge the abilities and resources of many small retailers. perchance their biggest advantage is their knowledge in every aspect of their business, from inventory selection to store layout. However, large retailers are not perfect. They have competiti ve unaccentednesses that small retailers can exploit. Most offer the same standardized assortments of products nationally. local managers have little say in inventory selection.Often, sales staff has minimal product knowledge. Staff turnover is exceedingly high. Most large retailers have little connection with -22- the community they serve. They commonly do not offer special services. Larger companies are often slow to recognize and react to changes in their local markets. self-directed retailers can co-exist and flourish in the trace of the big chains by developing a niche within the assorted market. The niche should be developed on the basis of new or unaccustomed product offerings, sterling(prenominal) service and general quality. While value is important, price may be less important.Efficient operations, including critical buying practices, are a must. Customer contact within the niche market must be characterized by high-touch service. The key factor is innovation st ores that do not change will perish. The road to success for the autonomous retailer lies in doing all the things those big chain stores can not or will not do. The flourishing independent retailers embrace the following principles v Be prepared for change. v ply to a narrower niche market and stop competing directly with the big retailers. v moderate more about customers and include trump customers in a database. Invest suitably in advertising and promotion. v fight regular prices and avoid discounting (ensure requisite mark-up). v Buy with precision and search out specialization suppliers. v Maintain essential inventory. v Focus on profit instead of volume (be ready to ache an occasional sale). v Provide preternatural service. v Employ the best possible staff. v Understand the significance of the Internet. blunt margin and inventory turnover is another means of classifying retailers. Gross margin is net sales minus the cost of goods sold and gross margin percentage is t he return on sales.A 30% margin implies that a retailer generates Rs 30 for every Rs 100 sales that can be used to pay operating expenses. Inventory turnover refers to the number of times per year, on average, a retailer sells his inventory. On the basis of this, retailers are classified as low margin low turnoverthose that cannot survive the competitionand low margin high turnover, exemplified by Amazon. com. Jewellery stores and appliance stores are examples of high margin low turnover stores and only a few retailers achieve high margin high turnover. These -23- etailers are in the best position to rubbish competition because their high turnover allows them to reject price wars. The drawback of the classification by this method is that service retailers who have no inventory turnover cannot be encompassed. One of the old means of classification of retailers is by location, generally within a metropolitan area. Retailers are no longer satisfied with traditional locations within a citys business district but are on the constant lookout for surrogate locations to reach customers. Besides renovating old stores, retailers are testing unorthodox locations to expand their clientele.With the advent of the Internet, this area of retailing is probably to undergo tremendous changes in the coming years. Size is often used as a yardstick to classify retailers because costs often differ on the basis of size, with big retailers having lower operational costs per dollar than smaller players. However, in this sphere too, the Internet may make size an noncurrent method of comparison. TRENDS IN RETAIL FORMATS Retail industry is continuously going through changes on account of liberalization, globalization and consumer preferences.While multinational retail chains are looking for new markets, manufacturers are identifying, redefining, or evolving new retail formats. The existing retail houses are also gearing up to face the emerging competition from the organized sector a nd the changing outlook of the consumers. For example, consumer spending is shifting from goods to services. Accordingly the retailers too are fast adjusting to the changing consumer preferences. Consumers are not only looking for the core products or functional benefits from the retailers but also the non-functional benefits, which need to be compatible with their lifestyles.For example, most of the traditional eating control sticks in India such as Haldiram, Bikaner and Sagar Ratna have revised their product offerings and atmospheric static on the lines of the multinational chains to argue with them and to serve changed expectations of the consumers. Mom-and-pop Stores and Traditional Kirana Stores The retail sector is changing as new store categories have started dominating the marketplace. Mass merchandisers (Wal-Mart, Big Bazaar), discount clubs (Subhiksha), -24- so-called category killers ( spot Depot, Vishal chain), and speciality retailers (Time Zone, Tanishq) have all de veloped a thriving retail models.At the same time, the small mom-and-pop stores and the traditional department stores, are finding the competition intense. In 2002, while Wal-Mart and Target saw revenues grow (by 12% and 10%, singlely), department stores such as Saks and Federated experienced declining revenues (down 3% and 1% respectively). But even in the mass-merchandising segment, the competition is fierce, as is evidenced by Kmarts bankruptcy announcement in 2002. Small independent stores, across product categories, is a very common retail formats they are also undertaking large scale renovations to appeal and attract their target consumer segments.E-commerce The amount of retail business being conducted on the Internet is growing every year. Indeed, Forrester research Agency projects e-commerce revenue to rise to $123 billion in 2004, an increase of some 28% over the previous year and for e-tailing to comprise a bigger slice of the overall retail pie (5. 6%, up from 4. 5% in 2003). Many major retail organizations and manufacturers have online retail stores. Companies like Amazon. com and source and second. com, which helped pioneer the retail e-commerce concept, are now being followed by bricks-and-mortar and catalogue retailers like J.Crew, which are expanding retail e-commerce into new markets. incision Stores A few years ago, name like Sears, J. C. Penney, Macys, and Montgomery Ward predominate malls and downtowns all over America. Over the last decade or so, however, these department stores have suffered badly. In part, this is a result of changing shopping patterns and increased competition from discount stores. It has also come from financial burdens incurred by companies that acquired competing companies and grew too fast. It is unlikely that these players will mellow out from the market.However, they should be ready to expect more bumps as the strong get stronger and the weak get absorbed. -25- ignore Stores These are giants such as Wal -Mart (the largest retailer in the world, with more than a million employees), Target and Kmart, as well as membership warehouses, such as Costco. These, along with the category killers, have changed the landscape of both the retail industry and America. Where once mom-and-pop and department stores dominated retail, now the discount retailers and category killers are at the top of the heap.And where once shopping malls, anchored by at least one major department store, used to be the possessive retail presence lining the nations roads, now it is the behemoth Wal-Marts and Home Depots. Category Killers These are the giant retailers that dominate one area of merchandise (e. g. , seat Depot, Tower Records and The Sports Authority). They are able to buy bathroom tiles, file cabinets, electronic goods or pet food in such huge volumes that they can then sell them at prices even fairly large competitors cannot match.The future of this category is better than that of many of the more gener al discounters, but the same employment caveats apply. For most job seekers, these companies offer earn-and-learn experiences with vendors and distributors before they move onward and upward. distinctive feature Stores These include Crate & Barrel, the Body Shop, and capital of Seychelless Secret. These stores concentrate on one type of merchandise and offer it in a manner that makes it special. Some are very high-end (Louis Vuitton) while others cater to the price-conscious populace (Old Navy).Many are so successful that department stores have started to emulate their buying, marketing, and merchandise display strategies. Industry experts predict growth in this segment, particularly in home furnishings and home improvement, and it seems to attract many of the best and brightest in retail. Promotion and responsibility come quickly to those willing to work hard, and in many of these stores the hand of bureaucracy is not heavy. -26- E-tailers While most retailers have online storefr onts, stringently online purveyors with no bricksand-mortar counterparts are hoping to snare a percentage of the retail profit.Major players, such as Amazon. com, have generated enough business to cause top brick-andmortar competitors to come up with their own Internet sites. Traditional retailers like Wal-Mart and Starbucks, hugely successful in their own right, have also set up online stores so as not to miss out on the revenue opportunities that the Interned offers. -27- BARISTA Barista positioned its outlets as a place where people meet each other in an environment, which fulfills both their social and intellectual needs. The music is not too loud and encourages conversation, and the person git the counter is non-intrusive and friendly.Any consumer knows that even when it is crowd at Barista, you will have your share of privacy. This is because the other consumer is not listening in he is too involved in himself. MARGIN FREE MARKETS Margin eject Markets is the largest retail chain in the state of Kerala and one of the leading retail chains in India. The first outlet of this chain started functioning on 26 January 1994 at Thiruvananthapuram. There are before long more than 275 franchisees of Margin dispense with Markets spread all over south India. The outlets are franchises and are not actually possess by the chain.The Consumer Protection and Guidance Society currently control Margin trim Markets, which is registered kindly institution that started functioning in 1993. The consumers are assured of quality, quantity and fair price of the goods sold through the Margin drop off Markets. Any retailer can boost his shop to a Margin Free outlet by sending in an application to the society. If his application is accepted, he has to make the necessary investment as required. These shops deal in the enter gamut of foods required by a home for its monthly onsumption, grocery, food and non-food FMCG items, fruits and vegetables, consumer goods and household articles. Margin Free outlets are typical discount stores, offering one-stop-shop convenience and self service facility at significant discount to its customers. Most of these customers, in time, turn out to be its permanents customers by taking discounts cards, which permit them to obtain larger discounts than the non-card holders. The necessity to offer protection against the lift prices gave birth to the idea of Margin Free Markets. An enthusiastic entrepreneur, named Mr N.Ravikumar, conceived the idea. The idea turned out to be an instant success in Kerala especially because Kerala is more of, a consumer state than a producing state Kerala depends on her neighbouring states for her consumer needs. Due to the large number of intermediaries involved and the transportation costs, the prices are high and there is a wide fluctuation in the prices of groceries, fruits and vegetables. -28- RETAIL ORGANIZATION The term retail organization refers to the basic format or structure of a r etail business designed to cater to the needs of the end customer.Recently, some scholars have started referring to India as a nation of shopkeepers. This epithet has its roots in the huge number of retail enterprises in India, which were over 12 million in 2003. intimately 78% of these are small family businesses utilizing only household labour. Retail firms may be independently own, parts of a retail chain, operated as a franchisee, leased departments, owned by manufacturers or wholesalers, consumersowned or co-operative society. A retail unit could be owned by v Manufacturer (e. g. , company owned retail outlets) v interlocutor (e. g. Vastra outlet in Rajouri in juvenile Delhi) v Independent retailer (Chanakya scented Shop near Hazratganj in Lucknow) v Consumer (consumer owned grocery stores in man y residential societies) v Co-operative society (e. g. , Mother Dairy milk booths in Delhi) v Government (e. g. , Cottage Emporia) v ownership shared among franchiser and franchi see (e. g. , Archies Gallery) Although most Indian retailers fall in the category of diminished units, there are also some very big retailers. Organized retail stores are generally characterized by large, professionally managed store formats providing goods and services hat appeal to customers, in an ambience that is conducive for shopping and provides a memorable experience to customers. From pose and operating perspectives, each ownership format serves a marketplace niche and presents certain advantages and disadvantages. Retail executives must not lose sight of this in playing up their strengths and working around their weaknesses. THE CHANGING social structure OF RETAILING All dynamic developments in retailing, from the birth of departmental stores in the last century to the recent emergence of warehouse clubs and hypermarkets, have been -29- responses to a changing environment.Changing customer demand, new technologies, intense competition, and social changes create new oppo rtunities even as they shake up existing business. The retail business formats have been changing very fast mainly due to proficient influences. The Internet and the Web technologies have created a myriad f opportunities for the Web-based business model of retailing. This has created a competition for the retailer with its own self. Besides, the challenge for the retailer now is to keep abreast of these latest formats in order to maintain and grow its share of market and vie within its band of retailers.A key impact of technology has been provision of greater information to the customer. Hence, a big challenge for the retailer in the information savvy world of today is that the opportunities for price differentiate itself qualitatively by superior customer services or better value for money to the customer. CLASSIFICATION OF RETAIL UNITS Conceptual classification of a business unit provides the marketers with strategic guidelines, useful in the design of retailing strategy. Beside s, retail businesses are extremely diverse and there are quite a few types of retail units.Therefore, retail units are classified on multiple of ownership, geographical locations, kind of customer interaction level of services provided etc. Retailers Classified on the Basis of Ownership One of the first decisions that the retailer has to make as a business owner is how the company should be structured. This decision is likely to have long-term implications, so it is important to consult with an accountant and attorney to help one select preferred ownership structure. There are four basic legal forms of ownership for retailers 1. Sole proprietorship The vast majority of small businesses start out as sole proprietorships.These firms are owned by one person, unremarkably the individual who has the day-to-day responsibility for hurry the business. -30- 2. Partnership A partnership is a common format in India for carrying out business activities (particularly trading) on a small or m edium scale. In a partnership, two or more people share ownership of a whizz(a) business. 3. Joint venture A critical point venture is not well defined in the law. Unless incorporated or established as a firm as evidenced by a deed, joint ventures may be taxed like connecter of persons, sometimes at maximum borderline rates.It acts like a general partnership, but is clearly for a limited period of time or a single project. 4. Limited liability Company (public and private)- The Limited Liability Company (LLC) is a relatively new type of hybrid business structure that is now permissible in most states. The owners are members, and the duration of the LLC is commonly determined when the organization papers are filed. Classification of Retailers on the basis of practicable Structure Retail businesses are classified on the basis of their operational and organizational structure.Operational structure defines the key strategic decision of retail entity, whether to hire employees an d manage the distributed sales function internally or to reach customers though franchised outlets owned and operated by local entrepreneurs. Retail firms can be classified into five heads on the basis of their respective operational structures 1. Independent retail unit The total number of retailers in India is estimated to be over 5 million in 2003. About 78% of these are small family businesses utilizing only household labour. An independent retailer owns one retail unit. 2. Retail Chain A chain etailer operates multiple outlets (store units) under common ownership it usually engages in some level of centralized (or coordinated) purchasing and decision making. 3. Franchising Franchising involves a contractual arrangement between a franchiser (which may be a manufacturer, a wholesaler, or a service sponsor) and a retail franchisee, which allows the franchisee to conduct a -31- given form of business under and establishments name and according to a given pattern of business. 4. undertake Department or Shop-in-shop-It refers to department in a retail store that are rented to an outside party.Usually this is done in case of department and speciality stores and also at times, in discount stores. 5. Co-operative Outlets Co-operative outlets are generally owned and managed by co-operative societies. In this context the detailed example of Kendriya Bhandar in India. Classification of Retailers on the basis or Retail Location Retailers have also been also been classified according to their store location. Retailers can locate their stores in an quarantined place and attract the customers to the store on their own strengthsuch as a small grocery store or paan shop in a colony, which attracts the customers staying close by.Classification of retailers on the basis of location is discussed below 1. Retailers in a free-standing location- Retailers located at a site which is not connected to other retailers depend entirely on their sores drawing power and on the var ious promotional tools to attract customers. This type of location has several advantages including no competition, low rent, better visibility from the road, easy parking and lower property costs. For example the Haldirams outlet on the DelhiJaipur highway and the McDonalds outlet on Delhi-Ludhiana highway. 2.Retailers in a Business-associated Location-In this case, a retailer locates his store in a place where a group o retail outlets, offering a variety of merchandise, work together to attract customers to their retail area, and also compete against each other for the same customers. 3. Retailers in Specialized Markets Besides the above location-based classification, we also have in India-retailers who prefer specialized markets, particularly traditional independent retailers or chain stores. -32- In India, most of the cities have specialized markets noteworthy for a particular product category.For example, in Chennai, Godown Street is famous for clothes, Bunder treet for stati onery products, Usman street for jewellery, T Nagar for ready-made garments, Govindappan naicleen street for grocery, Poo Kadia for food and vegetables. 4. Airport Retailing For quite some time, duty-free shops and newsstands dominated the small amount of commercial space provided at airdromes. Lately, serious efforts are being made to design new airport facilities in order to incorporate substantial amounts of retail space.The key features of airport retailing are v Large groups of likely shoppers v Captive audience v toilsome sales per square tush of retail space v Strong sales of gift and travel items v Difficulty in replenishment v Longer operating hours v duty-free shopping possible. -33- VARIETY OF MERCHANDISE aggregate The retail merchandising has come a long way in India since the days when general stores (kirana) that stocked everything from groceries to stationery and small shops that sold limited varieties of products (such as clothes, furniture, medicines) reigned supreme.There are many different retail stores in Indiaconvenience stores, supermarkets, hypermarkets, department stores, brand stores and discount stores characterized by the variety of merchandise mix offered by a respective retail format. The consumer can choose between different stores for different needs. Retail units, on account of variety of merchandise mix, can be classified as follows . Department Stores It is a large retail store organized into a number of departments, offering a broad variety and depth of merchandise, commonly part of a retail chain.Usually, department stores are located within the planned shopping centres or traditional up market downtown centres. The leading fashion department stores in India are ebony tree, Globus, LifeStyle, Pantaloon, Shoppers Stop and Westside. All of them are multiproduct stores, Ebony has 7 stores, Globus has 4 stores, LifeStyle has 3 stores and there are 12 Pantaloon Family Stores. Discount Stores Retailers offering a broad v ariety of merchandise mix, limited or no service and low prices are characterized by low margins, heavy advertising, low investments on fixtures, limited support from sales people etc.Discount stores prefer shopping centres that provide space at lower rents as they attract customers from other adjoining stores in the shopping centre. oddment Stores Speciality stores stress on one or a limited number of complemental product categories and extend a high level of service to their customers. In India, the traditionally independent retailers in the specialized market centres operate in a particular product category, at these centres attract large crowds. Such specialized retail operations provide expertise economies of scale, bargain and image to the particular stores.Supermarkets and Hypermarkets- A hypermarket is a very large retail unit offering merchandise at low prices. Superstores have a sales area of over 50,000sq. ft. Hypermarkets are characterized by large store size, low ope rating costs and margins, low prices and comprehensive range of merchandise. -34- RETAIL IN INDIA The retail industry in India is largely unorganized and predominantly consists of small, independent, owner-managed shops. Retailing is Indias largest industry in terms of contribution to GDP and constitutes 13% of the GDP (Gross domestic help Product). There are around 5 million retail outlets in India.There are also an unaccounted number of low cost Kiosks (tea stalls, snack centres, barber shops) and pushcarts mobile vendors. Total retail sales area in India was estimated at 328 million sq. mt. in 2001, with an average selling space of 29. 4 sq. mt. per outlet. In India, the per capita retailing space is about 2 sq. ft. , which is quite low in comparison to the developed economies. In 2000, the global management consultancy AT Kearney put retail trade at Rs 400,000 crore, which is expected to increase to Rs 800,000 crore by the year 2005an annual increase of 20%.According to a surve y by AT Kearney, an overwhelming harmonise of the Rs 400,000 crore retail markets is unorganized. In fact, only a Rs 20,000 crore segment of the market is organized. There is no integrated supply chain management outlook in the Indian traditional retail industry. Food sales constitute a high proportion of the total retail sales. The share was 62. 7% in 2001, worth approximately Rs 7,039. 2 billion, while non-food sales were worth Rs4189. 5billion. However, the non-food retailing sector registered faster year-on-year growth than the food sales sector.The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins. The turnover from private labels by major retail chains was estimated at around Rs 1200 million in 2000. Growth in retail outlets (millions) Year 1978 1984 1990 1996 Urban 0. 58 0. 75 0. 94 1. 80 Rural 1. 76 2. 02 2. 42 3. 33 Total 2. 35 2. 77 3. 36 5. 13 blood indiainfoline -35- formation of urban outlets Retail Outle t Grocers Cosmetic stores apothecary Food stores General stores Tobacco, pan stores others Source indiainfoline organisation 34. 7% 4. % 6. 3% 6. 6% 14. 4% 17. 0% 17. 0% Composition of rural outlets Retail Outlet Grocers Composition 55. 6% General stores 13. 5% Chemists Others 3. 3% 27. 6% Source Indiainfoline EMERGENCE OF form RETAILING Organized retailing in India repres