Retail is the sale of goods and services from individuals or businesses to the end-user.It explains about Retail sector growth and how it will help in increasing GDPA of a country,Explain how it will grow in Future.. .

1. Retail Sectors
By
S.Prakash

2. Introduction
 Barter System was known as the first form of retail.
 As time passed currency was exchanged with goods and
services.
 The Indian retail industry is the fifth largest industry in the world.
 With growing market demand, the industry is expected to grow
at the rate of 25-30 percent annually.
 Organized retail in India is expected to grow 25-30 percent
yearly and is expected to increase from Rs 35,000 cores in
2004-05 to Rs 109,000 cores by 2010.
 Second Largest Employer after Agriculture(8%)

3. Overview
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4. Importance
 Largest and fastest growing sector in India.
 Modern retailing forms one point stop for all shopping.
 Consumer gets a large product variety of brands to choose from
one roof.
 First it was a sellers market and now its changing to buyers
market.
 By 2012 Indian retail sector would be generating 11 million
employment opportunities.

5. Industry Description
 Indian retail Industry is Fifth
largest in the world.
 The current penetration
pegged at 5-7 per cent.
 Accounts for 24% of
country’s GDP and 8% of the
total employment.
 Food is the largest segment
in terms of its.
5
1200 1213
1380
1729
1842
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2008 2009 2010 2011 2012
GDP(in
Billion $)
Retails
Sales(In
Billion $)

6. Tax Impacts and Regulatory Environment
 The retail sector has not been conferred an industry status till now. Hence, there
are no specific rules and regulations governing the sector.
 However, there are certain laws pertaining to the establishment of stores and
conduct of activities, which retailers need to follow:
 The Shop and Establishments Act
 The Standards of Weights and Measures Act
 The Provisions of the Contract Labor(Regulations and Abolition) Act
 The Income Tax Act
 The Customs Act
 The Companies Act
 In addition to the above law: Retail companies have to follow certain regional
rules and regulations on the basis of their stores location; different states have
different laws to regulate the retail trade.
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Reference: www.retailexecutive.com.au/industry_diversity/retail_industry_areas

7. Regulatory Environment
FDI Policy with regard to Retailing in India:
 FDI up to 100% for cash and carry wholesale trading and export trading
allowed under the automatic route.
 FDI up to 100 % with prior Government approval (i.e. FIPB) for retail trade of
Single Brand‘ products.
 India allowed FDI of up to 51% in ―multi-brand sector.
 Single brand retailers such as Apple and Ikea, can own 100% of their Indian
stores, up from previous cap of 51%.
 The retailers (both single and multi-brand) will have to source at least 30%
of their goods from small and medium sized Indian suppliers.

8. Retail Growth In India

9. Porter‘s Five Force Model
Source:http://www.mindtools.com/pages/article/newTMC_08.htm

10. Threat of New Entrants Power of Suppliers
95% of the market is made up of
small, uncomputerised family run stores.
The ability to establish favorable supply
contracts, leases and be competitive is
becoming virtually impossible.
The vertical structure and centralized
buying gives chain stores a competitive
advantage over independent retailers.
On the whole threat from new entrants in
retail industry is high.
Historically, retailers have tried to exploit
relationships with supplier.
In retail industry suppliers tend to have
very little power.
Following example:
Wal mart places strict control on its
suppliers.

11. Power of Buyers Availability of Substitutes
Customers have comparatively high
bargaining power in unorganized sector
than in organized sector.
As the customer will demand products
from organized units he will be more
focused towards quality aspect
The tendency in retail is not to specialize
in one good or service, but to deal in wide
range of products and services.
What one store offers is likely to be same
as that offered by another store.
The threat from substitutes is high.

12. Competitive Rivalry
Retailers always face stiff competition and must fight with each other for market
share and also with unorganized sector.
They have tried to reduce cut throat pricing competition by offering frequent flier
points, memberships and other special services to try and gain the customer‘s loyalty.
Thus retailers give each other stiff but healthy competition which is evident from
their aggressive marketing strategies and segment policies.

13. SWOT Analysis
Strengths
High Employment Generator
Low Labor Cost
Rising disposable income
Shopping convenience
Changing consumer habits and lifestyles
High availability of quality retail space
Weakness
 Lack of industry status for retail.
 Numerous license, permits and registration requirement.
Lack of detailed region specific customer data.
Lack of Skilled Labor
Underdeveloped supply chain
 Underdeveloped logistics infrastructure &absence of national cold chain
networks.
Lack of basic infrastructure like power, transport and communication.

14. Opportunity
 Untouched rural market.
 Investment opportunities
 Fast evolving shopping mall formats
 Upcoming international players
Threat
 The tax structure in India favors small retail business
 Lack of adequate infrastructure facilities
 High cost of real estate
 Low retail management skill

15. Company Name Net Sales(Billion $)
Pantaloon Ret 0.79
Shoppers Stop 0.37
Trent 0.16
Brandhouse 0.14
REI Six Ten 0.11
Provogue 0.11
Koutons Retail 0.10
Kewal Kiran 0.05
Cantabil Retail 0.03
Arunjyoti Enter 0.01
Prozone Capital 0.00
Reference: Source Moneycontrol.com
EXAMPLE OF RETAIL STORES

16. Major Players
Reference: Source Moneycontrol.com
PantaloonRet
43%
ShoppersStop
18%
Brandhouse
8%
Trent
7%
Others
12%
Provogue
6%
KoutonsRetail
6%
Pantaloons Retail India Ltd. is market leader with 43% of the market share in
terms of turnover
Followed by Shoppers stop, Brandhouse, Trent, Provogue

17. Cost Structure
70.9
1.45
4.56
3.82
17.06
2.22 0
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
Selling and Administration Expenses
Miscellaneous Expenses
Less: Pre-operative Expenses
Capitalised
Reference: Source Moneycontrol.com

18. Organized Retail Examples

19. Unorganized Retail Examples

20. Thank you !!!