cover story hypermarket priyankadas gupta

8/10/2019 Cover Story Hypermarket Priyankadas Gupta

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cover story

52 .IMAGES RETAIL.APRIL 2013

IN INDIA, HYPERMARKET IS AN AMALGAMATION

OF MODERN RETAIL AND REASONABLE PRICE

OFFERING. THUS, THE FORMAT HAS A HIGH APPEAL

WITH THE MIDDLE AND UPPER MIDDLE CLASSES

OF THE COUNTRY, WHO SEEK A HIGHER LEVEL OF

SHOPPING EXPERIENCE WHICH COMES WITH A

LOT OF CONVENIENCE AND VALUE, ADDRESSING

ALL THEIR NEEDS IN ONE PLACE. BEGINNING LAST

ISSUE, WE STARTED A SERIES ON RETAIL FORMATS

IN INDIA AND IN THIS ISSUE WE ARE TAKING A STEP

FURTHER TO BRING YOU A DETAILED COVERAGE OF

THE EVOLUTION OF THE LARGEST RETAIL FORMAT

HYPERMARKET AND HOW IT HAS BECOME A

SIGNIFICANT GROWTH DRIVER FOR ORGANISED

RETAILERS IN THIS COUNTRY

By Priyanka Dasgupta

With information support from Wazir Advisors

A hypermarket is a big-box store that combines

the attributes of a supermarket and a department

store. It is usually bigger than a supermarket, with

size of around 150,000-300,000 sq.ft. Hypermarkets

retail a wide range of products including groceries

and general merchandise under one roof. The ideaof this type of market is to satisfy the diverse needs

of a customer in one shopping trip. The merchandise

mix of a hypermarket includes all items that are

required to manage a household. Usually, there is a

heavy focus on private label brands too. Generally,

hypermarkets have more than 200,000 different SKUs

of merchandise available at any given time. Globally,

in terms of location, these are usually located in

suburban areas that allow for larger store space and

easy accessibility to vehicles.

The Big-Box FormatThe Big-Box Format

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APRIL 2013 . IMAGES RETAIL. 53

According to an independent

analysis by Wazir Advisors for Images

India Retail Report 2013, in India,

hypermarkets contribute to almost

2.50 percent of the total organised

retail sales. As space crunch is anissue in this country, hypermarkets

here tend to be smaller than global

standards, average store size being

around 40,000 sq.ft. Lack of large

retail space at reasonable prices has

been a big deterrent to the rapid

expansion of this concept in metros.

HISTORY OF EVOLUTION

In 1962, Meijer opened their rst

hypermarket Thrifty Acres in Grand

Rapids, Michigan, and in Europe

Carrefour launched their rst store in1963 at Sainte-Genevive-des-Bois,

France. The hypermarket concept

started spreading in the US in 1987

with the introduction of stores by

Carrefour and other major American

chains. In the early 1990s, the three

major discount store chains in

the US (Wal-Mart, Kmart and Target)

started developing discount stores in

the hypermarket format. Wal-Martintroduced Hypermart USA in 1987

and later Wal-Mart Supercenter, and

Kmart developed Super Kmart.

In 1991, Dayton-Hudson

Corporation (now Target Corporation)

expanded their Target Greatland

discount store chain in Columbus,

Ohio, where they learned that their

general merchandise superstores

were unable to compete against

the Meijer hypermarket chain. In

response, Dayton-Hudson entered

the hypermarket format in 1995 byopening their rst Super Target store

in Omaha, Nebraska.

On the other hand, modern retail

itself is not more than a decade old in

India. The concept of hypermarkets

started taking shape in this country

hardly seven to eight years back.

Some prominent hypermarket chains

in India include Big Bazaar, Spencers,

Reliance Mart, Star India Bazaar,Bharti Easy Day Hyper, HyperCity,

More, etc. Large organised retail

players such as Future Group, K

Raheja Corp, Aditya Birla Group,

and recently rechristened RP

Sanjiv Goenka Group have started

experimenting with this format.

Almost all the players tried to bring

in innovation and customisation to

suit the diverse Indian market place.

Initially, the focus was more on

supermarket format as that amounted

to rapid expansion. But after a year

and a half of expanding in wrong

locations coupled with high rentals

made them realise that hypermarket

is the more protable format in

India provided the location, product

assortment and sourcing are right.

Hence, the retailers increasinglystarted focussing on strengthening

their back-end in order to make their

hypermarkets more protable.

GLOBAL STANDARDS

Globally, large-format hypermarkets

have been most successful. Carrefour

Planet is one of the most prominent

examples of hypermarket regeneration

in Europe and the rollout of the

concept. Planet emphasises category

excitement and fresh food in a big-

box format. Each store has a zonedapproach with a strong focus on

partnerships with branded suppliers.

The Mostoles store in Spain is the

most recent version of the format,

which forms the basis for a wider

rollout of the concept.

Also for global players, mastering

Twitter and Facebook is becoming

as crucial to success as standard

retail skills such as implementingpricing strategies and curbing out-

of-stocks. Enormous amounts of

online connections are taking place

among retailers, consumers and

manufacturers. Web reviews, feedback

panels, dedicated fan clubs and user-

created content are emerging as new

communication channels. Shoppers

are giving their opinions and smart

companies are using these to improve

their products and services.

Co-op Schweiz, one of the largest

retail groups in Switzerland, has a

club initiative called Hello Family

Carrefour Planet is a prominent example of hypermarket regeneration in Europe and the rollout of the concept




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that offers substantial discounts. Club

members can vote online for offers

they wish to see become a Promotion

of the Month and they can also

download money-off vouchers.

Further benets of the service for clubmembers include a dedicated Internet

platform with contests and free advice

on hot topics such as health and

childhood nutrition.

Retailers across the globe are doing

some great experiments using social

media. Some are even getting shoppers

involved in product creation. For

instance, British supermarket chain

Waitrose has set up an online panel

WaitroseKitchenTable.co.uk where

customers can, as the website says,

have a chance to tell us what you lovethe most and where we can improve.

Asda, the UK subsidiary of Wal-Mart,

created AsdaChosenByYou.com, which

lets customers give their take on Asdas

recently launched mid-tier private label

brand Asda Chosen By You. The

3,500-SKU line was created with input

from customers. Some 40,000 people

did 2,00,000 taste tests.

Internet has already had a profoundimpact on how people shop for

groceries. In Europe, for example, it

is an established sales channel and a

key information source for shoppers.

Until recently, its growth had been

driven by people ordering products

from computers but thats now being

eclipsed by smartphones.

The application of smartphones

in a grocery context is profound.

Apps have been devised to drive

brand engagement and in some

cases, draw shoppers into stores.

Furthermore, the smartphone has

the potential to inuence purchasing

decisions by providing consumers

with much greater information

when they are standing in the aisles

ready to make a purchase. Shoppers

at ICA supermarkets in Swedencan nd extra sustainability and

nutritional information about dairy

products through their phones.

In the Netherlands, grocer Albert

Heijns Appie application allows

shoppers to scan product barcodes,

build a shopping list and reorder the

products.

In the UK especially, mobile

phone is transforming grocery. Tesco

had launched the countrys rst

transactional barcode scanner app

in October 2012, enabling shoppersto scan items at any time and add

them to their shopping list. Retailers

such as Waitrose and Tesco are also

building so-called dot-com stores

where orders are taken and personal

shoppers put together the items that

are then delivered to the customer.

Waitroses rst dot-com store is

going to serve the London area. The

outlet will be staffed by Waitrose

employees who will pick products by

hand, thereby allowing the retailer

to replicate its strength in customerservice.

Pricing seems to be the issue that is

on top of everyones mind. However,

price is not the only factor on grocers

minds. Businesses have been taking

a number of steps to reinforce value

since the start of the nancial crisis

in 2008, and many of these do not sit

within the price camp. Companies

are nding their own, unique ways to

be innovative. But the best are doing

it in such a way that ts nicely into

their business model and customer

expectations of the brand.

INDIAN SCENARIO

A booming economy and an

upsurge of young and aspirational

consumers have made every retailer

in this market revisit their strategies.

Hypermarket players are no exception.

In fact in a new ecosystem, wherein

the acceptance of modern retail is

growing, hypermarket stores are

accommodated in a far better way.

While the segment has taken time

to take off, retailers are now plugging

into the hypermarket opportunity.In India, any retail outlet occupying

over 50,000 sq.ft. space is termed

as a hypermarket. Such stores are

normally within metro and city limits,

whereas in the West, hypermarkets

are typically outside city limits.

According to the industry experts,

for a retailer, any metrics in a large-

format store automatically translates

to more prots. Such stores are more

efcient because of scale and area.

Various industry reports suggest that

while hypermarkets in India havegrown from 116 in 2008 to 307 in

2012, supermarket and smaller format

stores have actually come down by

604 outlets in the same period.

In fact the notion that large-format

stores take more time to break even is

a myth. At an operational level, most

professionally run, big group stores

break even from two months onwards.

In India, any retail outlet occupying over 50,000 sq.ft. space is termed as hypermarket

Asda launches 3,500-SKU line of private labels

with the help of inputs from customers




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An investment worth `4-4.5 crore

is required for setting up one such

store. Also, there is a trend where

consumers prefer the hypermarket

because of a combination of best

prices and destination shopping.

The immediate benet of shopping

at any of these hyper outlets is that

you instantly become the king. The

ambience is good and there are better

deals across categories with morechoice and you get everything under

one roof. For retailers, in most cases,

large-format stores are anchor outlets

and are able to negotiate lower rents,

often getting free rents for the rst

few months. The topline is higher and

owing to larger volumes, retailers are

able to manage their supply chains

better.

The gestation period for large

hypermarket stores is anywhere

between three and ve years.

Compared to a supermarket store,the average billing at a hypermarket

is usually ve times higher. Modern

retailers, who have played with

various formats and at times burnt

their ngers, are beginning to look

more keenly at the hypermarket

opportunity and the next wave of

expansion, say experts, will see a

growth in hypermarket stores.

THE NEXT LEVEL

As the leading players in

the hypermarket format are

consolidating their position, they

have undertaken the most tried and

tested route for success - innovation

and rationalisations to improve

protability. Lets see what certain key

players in this space have kept in their

sleeves.

BIG BAZAAR

Austerity measures seem to be the

key word for Indias largest retail

company Future Group and theirbiggest format Big Bazaar. To improve

protability, the Kishore Biyani-led

group shut nine Big Bazaar stores in

2012 and revamped some existing

ones. According to Kishore Biyani,

Chief Executive, Future Group, as

the company had opened 18-20 Big

Bazaar stores during the last year,

net store addition stood at 10. The

group has got rid of unviable stores

and rebooted existing ones to make

those more relevant to customers.

The stores in Pune, Kolkata, Gwalior,

Jabalpur, Indore and Ludhiana,

among others, were relocated. Big

Bazaar is the largest and one of

the oldest hypermarket chains in

India. Starting operation in 2001, it

popularised organised retail in the

country. Currently, it has 166 outlets.The number of Food Bazaar stores

stands at 43. Biyani informs that the

group had revamped about 90 Big

Bazaar shops, which now have a

better look, increased cash counters,

improved visual merchandising, etc.

The chain has also launched a project

called Seva in their Rajaji Nagar store

in Bangalore, where it has grinders

for wheat, soya or ragi and helps

make multi-grain oor. It also helps

shoppers get cut vegetables at no extra

cost. The store also has counters that

help shoppers with payment of utility

bills. Big Bazaar plans to expand these

services across all their outlets. These

stores are now recording double-digit

growth in same-store sales. In the

coming quarter, the company expects

same-store sales growth at high teens.

SPENCERS

World class, full-edged, sprawlinghypermarkets, like the ones in

advanced countries that offer the

universe, are yet to debut in India. RP

Sanjiv Goenka Group-led Spencers

Retail is planning to change that

at least in a certain sense. In select

hypermarkets, the company will

expand offerings on the service

side, bringing them closer to what is

actually offered in the West, in terms

of the wide range of products and

services. Apart from food, apparel

and other goods, the store will offer

an array of services such as orist,

At an operational level, most professionally run, big group stores break even from two months onwards




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pharmacy, in-store cafe, barber shop,

laundry, and so on. Spencers plans

to make that list of services longer

with small bookstores and QSRs to

trigger impulsive purchases among

consumers. Spencers Kolkata branchwill lead the pack, to be followed by

similar hypermarkets elsewhere.

While in-store cafe and bakery

have by now become integral to some

new-age supermarkets, other offerings

such as electronics, car accessories

and jewellery are slowly making the

scene exciting. Andhra Pradesh, Tamil

Nadu, Karnataka, West Bengal, Delhi-

NCR, Uttar Pradesh and Maharashtra

are among the states that will host

Spencers hypermarkets. Besides state

capitals and major cities, Spencerswill foray into tier II and III towns.

The company links this move to high

double-digit same-store sales growth

of some stores in the non-metros.

Spencers will also sharpen focus on

private label (or in-house) brands

which now account for only

15 percent of their sales. The target

is 25-30 percent as private label

brands give hypermarkets control

over pricing, which is important in a

regime of maximum retail price.

MORE

Aditya Birla Group has taken a new

strategy with the More hypermarket

format. The aim is to open more

stores but only those that work with

customers. More, which closed nearly

150 supermarkets in the last 4 years,

is planning to open 100 supermarkets

every year in the next 3 years to

bolster its retail presence. The chain

is also aiming to launch half a dozen

hypermarkets this nancial year. Morecurrently has 496 supermarkets and

14 hypermarkets. The group had made

a big bang start to its retail foray by

acquiring the 172 store-strong South-

based retail chain Trinethra Super

Retail in 2007. Though Birla had plans

to set up 1,000 stores at an investment

of `9,000 crore by 2010, the slowdown

upset all its calculations.

As a part of the new strategy, for

hypermarkets, the company is doing

catchment surveys among focus

groups in the 1-5 km radius of thestores to nd out what exactly the

consumers in that area are looking

for. These surveys also help the

chain to differentiate the stores from

each other. For instance, the store at

Bangalores Mahadevpura, which has

a cosmopolitan crowd, offers more

non-vegetarian and bakery products

in the day-to-day needs category. But

the store at Bull Temple in the same

city, where the majority of customers

are traditional Kannadigas, keeps

puja owers, rice and local fruitsand vegetables. The oor space of

the recently opened Jayanagar store,

which is 3 km away from the one in

Bull Temple, spreads across 30,000

sq.ft., as against the 50,0000 sq.ft.

stores at Mahadevpura and Bull

Temple. Its offering comprises grocery

and general merchandise, unlike the

other two stores that house consumer

durables and apparel as well. The

company is trying to map the needs

of the customers and offer what theywant. However, More has an edge in

apparel, a high margin business, due

to its association with Madura Fashion

& Lifestyle which has brands such as

Louis Philippe and Van Heusen.

STAR BAZAAR

Star Bazaar, a part of the Tata Group-

owned Trent Hypermarket, will

focus on food services as the next

big business opportunity. Since they

already have a bakery within their

premises, the company has decidedto expand their food offerings and

even offer home deliveries through

websites such as Zomato.com which

lists restaurants in a particular city.

The Star Bazaar bakery has steadily

extended its services and offers

vegetarian and non-vegetarian hot

meals, apart from ready-to-eat snacks.

In future, the company might look

at sourcing food from the other Tatacompanies, but at the moment most

of the food is cooked at the store

itself. The contribution from bakery

operations is 3-4 percent of the

companys total revenues. At the same

time, Star Bazaar is also extending the

foods category with chocolates being

the next private label offering.

Treating it as an extension of their

bakery services, confectionery will

be the new offering under their own

brand. With almost 32 categories

under private labels, Star Bazaars

largest category is staples and home

More is doing catchment surveys among focus groups in the 1-5 km radius of the store to find out what exactly consumers in that area are looking for




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care. Almost 10 percent of the chains

revenues come from private labels

and the company hopes to double it

in the next ve years. Even products

of their back-end supply chain and

infrastructure provider Tesco aregetting extended at Star Bazaars 15

hypermarkets. At present the company

sells about 100 products from Tesco

but intends to take it up to 500 with

new categories such as plastics,

hangers and toys, apart from their

regular food and home products range.

Star Bazaar is also bringing in the

Tata connect for its private label

products displaying the message A

Tata Product with the Star private

label brand below it. The idea is to

bring in the Tata brand name on theprivate label packs to assure customers

about the quality of the private label

products in spite of the price being

10-15 percent lower than the regular

brands. Star Bazaar also has live

kitchens and is also looking at having

community foods at their stores .

HYPERCITY

The K Raheja Group rm Shoppers

Stop is changing business model for

their loss-making hypermarket stores

Hypercity as the format has taken

longer than expected to become

protable. With an eye on improving

protability, the company is changing

the business model for Hypercity and

will focus more on apparel range for

better margins apart from changing

the trading model for sourcing. The

overall apparel share will go up to

14 percent as the category gives

more margins compared to food and

grocery. Currently, food and grocery

accounts for about 60 percent of

Hypercitys retail items. The company

is also bringing down the percentage

of the food and grocery items.

On the sourcing side, the company

is replicating the consignment-basedmodel in Hypercity as is being

done with their departmental store

Shoppers Stop. In a consignment-

based model, the retailer pays for the

goods only after completion of sales

and unsold items are returned to the

supplier. The group has been steadily

reducing the proportion of bought out

goods while increasing the proportion

of non-bought ones, which are on

consignment basis. The company

is also looking at concession model

that involves sharing space with

manufacturers in return for rent or

share of revenue. Hypercity will open

two stores every year but only in theexisting cities.

TOTAL

Total is a prominent regional

hypermarket chain that is on a

signicant growth trajectory. Based

out of Bangalore, Total is owned

by Hari Bhartia controlled Jubilant

Retail. The company plans to open

eight new Total hypermarkets in

Hypercity is changing the business model, will focus more on apparel range

Leading International Hypermarkets

Retailers Country of Origin No. of Outlets No. of Countries Typical Store Size

Range (sq.ft.)

Wal-Mart USA 4,000 17 100,000-250,000

Carrefour France 1,300 20 60,000- 80,000

Tesco PLC UK 230 14 60,000-80,000

Auchan Group SA France 639 12 150,000-2,00,000

Target Corp US 251 2 100,000-180,000

Data Source: Company reports, Media articles and Wazir research

Indian Hypermarkets

Retailers Indian Group No. ofOutlets

No. ofCities

Typical Store SizeRange (sq.ft.)

Big Bazaar Future Group 160 90 40,000-50,000

Spencer's Hyper RPG 29 22 25,000-40,000

Reliance Mart Reliance Retail 17 4 30,000-40,000

More Megastore Aditya Birla 14 11 50,000-60,000

SPAR Landmark Group 13 8 40,000-50,000

Star Bazaar Tata Group 12 3 40,000-50,000

Hypercity K Raheja Group 12 9 50,000-70,000 (Large Format)

20,000-25,000 (Small Format)

Total Jubilant Bhartia 5 1 100,000-160,000

Easyday Hyper Bharti-Wal-Mart 1 1 55,000-60,000

Data Source: Company reports, Media articles and Wazir research

Bangalore as it attempts to focus on

its home market to gain a larger share

of the customers wallet. According

to the companys website, Total has

ve stores in the city. The group is

investing around `450 crore per city

and wants to focus on catchments

that they understand well and

prioritise those markets. The company

also believes that opening eight more

stores in the city will help them break

even faster on a companywide basis.They also claim that their stores have

already started generating prot,




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which has emboldened the Bhartias

to fund the rollout of more Total

hypermarkets in Bangalore with fresh

equity infusion.

Jubilant Retail claims to be the

second largest value-for-moneyhypermarket chain in Bangalore. The

group also takes on lease the entire

mall to provide family entertainment

options and ensure a tenant mix and

activities that encourage consumers to

visit the malls. The integrated strategy

also helps the rm to ensure lower

lease rental costs for the hypermarts

giving greater control over the success

of the malls. The retailer also claims

to have a strategy of farm to fork

to source produce from farmers at a

lower price which enables it to offeraffordable pricing.

According to media reports, the

promoters have so far invested

`400 crore in the business with

around `225 crore as equity. Total

hypermarkets carry an assortment

of 95-100 lines of products, spread

across fast moving consumer goods,

groceries, and fruit and vegetables.

The existing stores have been seeing

same-store sales growth of 60 percent.

RELIANCE MART

Reliance Retail, the retail arm of

Reliance Industries, has targeted

revenues of `40,000-50,000 crore

over the next three to four years.

While Reliance Retail has traditionally

focussed on smaller format stores,

the company is now stepping up on

big-box stores or hypermarkets that

are built on about 60,000-80,000 sq.ft.

and stock everything from food and

apparel to furniture.

So far, the company does not even

have half-a-dozen hypermarkets. Butunder the leadership of two retail

veterans from China - Rob Cissell,

Former Chief Operating Ofcer of

Wal-Mart China; and Shawn Gray,

Former Vice-President In-Charge,

Store Operations of the same company

- Reliance Retail has been buying real

estate for big-box format expansion.

EASYDAY HYPER

Bharti Retails Easyday Hyper has

opened their rst outlet in Mumbai

offering a destination shoppingexperience that caters to all household

needs of every family. They bring

together a wide range of high-

quality products and a great in-store

experience. The product assortment

includes jams, spreads, religious

requirements, spices, our, biscuits,

ethnic sweets, oils, ready to fry,

chocolates, candies, and frozen food

products. Additionally, the store offers

electronic items such as 3D and LED

televisions, refrigerators, washing

machines, mobile phones, laptops,

cameras and tablets.

AUCHAN

Last year, Max Hypermarket India,

part of the Dubai-based Landmark

Group, had signed an agreement

with French retailer Auchan Group to

develop the hypermarket business in

India. The existing Max Hypermarket

stores have already been rebranded

Auchan and will operate under the

franchise agreement. The deal will

help strengthen back-end supplychain and processes of both the

companies. One of the focus areas

for the company will be to strengthen

the value proposition, which means

a steady increase of promotions and

improving the brand communication.

Max Hypermarket and Amsterdam-

headquartered Spar Internationaldecided to discontinue their licence

agreement in May to pursue separate

strategies in India. Max operates 13

hypermarkets in India. The Auchan

Group is the worlds 12th largest

food retailer with operations in 13

countries. Max Hypermarkets and

Auchan plan to open 12-15 new stores

in a year across various geographies

in India.

COMPACT HYPERMARKET:

A PROBABLE GROWTH DRIVER

The concept of compact hypermarkets

has been widely discussed among

retail industry experts. They believe

that with the right location and

operating strategy this concept can

emerge as a winner. The compact

hypermarket is a cross between

the large hypermarkets and small

neighbourhood stores called

supermarkets, a format that has

become widely unprotable for Indian

retailers because the local merchants,

called kiranas, continue to dominate

the more populated urban areas.

Reliance Retail has traditionally focussed on smaller format stores, but the company is now stepping up on big-box stores that are build on 60,000-80,000 sq.ft.




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Industry experts feel that compact

hypermarkets are just the right size

to tap into Indias signicant urban

retail opportunities. These stores

can be of 4,000- 6,000 sq.ft. in size,

offering the amenities of hypermarkets

but are smaller and easier to

navigate, and they can competehead-to-head with the kiranas. In fact

neighbourhood stores cannot offer the

same consistent supply of goods

from food to kitchen and household

items which hypermarkets can.

While people in major cities want the

advantages of modern retail, research

nds that they are rarely willing to

travel more than 15 to 20 minutes

from home to shop. Proximity will

always be a major differentiator.

Hypermarkets cannot penetrate

every urban area protably, andneighbourhood stores do not carry

enough goods to satisfy shoppers, so

a smaller hypermarket the compact

hypermarket is the obvious answer.

Being the single provider of all

basic home consumption goods will

allow retailers to better meet their

customers needs and generate higher

gross margins. This means expanding

beyond food to categories such as

apparel, kitchen and household items.

The neighbourhood store format is

not large enough to do this, but the

compact hypermarket is.

Since, Indian retailers are not

shying away from experimenting

with formats and closing down

unviable ones something that we

have seen frequently happening with

neighbourhood supermarket stores in

the last four to ve years a tweak

in size and location to embrace anew concept can emerge as a game

changer.

THE HURDLES

Some of the key hurdles faced by

Indian hypermarket players are as

follows:

Underdeveloped supply chains,

lack of cold chains, poor

warehousing facilities, bad

roads, etc, have been a deal

breaker for the steady expansion

of hypermarket formats. Andfortunately retailers have realised

that and are steadily investing

behind back-end supply chains.

They are also taking the help of

global best practices to improve

this aspect of retailing.

The supply base is also highly

fragmented with a number of

intermediaries squeezing the

margins of all involved including

the retailers.

As hypermarkets are large-format

stores, sky rocketing rentals are a

strong deterrent. Retailers have no

option but to look at smaller cities,

the saving grace being the number

of aspirational customers. Poor

choice of location also hampers the

growth.

Still struggling to offer servicesprovided by neighbourhood kirana

stores.

Over reliance on debt funding had

led to nancial risks. However,

retailers are learning form their

experience.

THE SILVER LINING

As the Union Government has opened

the FDI ood gates in multi-brand

retail in India, industry watchers feel

that organised retail, now estimated

at $500 bn, will grow at 15 percentannually. The major advantage of the

entry of private companies, including

domestic and foreign, into the

retail sector is the enhanced ow of

investments in overall infrastructure

and the establishment of new supply

chains. This will in turn boost theexpansion of hypermarkets, which are

already gaining momentum after a

period of lull.

India being the one of the largest

markets, but it is certainly not

the easiest, is poised to become a

competitive market that will have

some of the best retail players

providing products and services on a

par with global retail standards.

To be continued

In the May issue, we will analyse another fastest

growing format in Indiadepartmental stores...

Compact hypermarkets (around 4,000-6,000 sq.ft. in size) are just the right size to tap into Indias significiant urban retail opportunities


cover story hypermarket priyankadas gupta

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