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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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54 .IMAGES RETAIL.APRIL 2013
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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cover story
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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56 .IMAGES RETAIL.APRIL 2013
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
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