CHAPTER 1

INTRODUCTION

INTRODUCTION

The purpose of the Organization Study is to get an overall knowledge about an organization. We management students have already got a theoretical understanding of the working of an organization from our classroom studies and lectures .So in order to have an integrated view of the things , we needed to see things directly and as and when they are on process.

With this objectives in mind organization study has been included as a part of academic curriculum and it attempts to gain an insight into the functioning through the co-ordination of different departments .

The organization study was conducted at one of the leading retail company in Kerala , Aditya Birla Retail Ltd ; Ernakulam gave an insight into the working condition of all the departments of the company , its corporate objectives and the ways and means adopted by the company to achieve its set goals . The study covers the different aspects of the company’s commitment towards attaining social objectives.

The external environment analysis , consisting of the social , political ,economical , technological and competitive contexts , will lead to assessing the opportunities and threats. Where the internal environment analysis covering all the department , organizational structure ,existing strategies , work culture will help in assessing the strength and weakness of the company .

OBJECTIVES OF THE STUDY

To acquire knowledge about the Retail Industry To gain and acquire knowledge about the origin and history of the company To study the structure of Aditya Birla Retail Ltd (ABRL). To understand and study various functions of the departments in the organization To conduct SWOT analysis of ABRL .

SCOPE OF THE STUDY

The organization study aims at generating a practical awareness of the functions and management of the organization of the company ABRL . The study covers a general understanding of the organization , its culture , departments , and its business activities . The study covers retail industry in general and management functions of ABRL

METHODS USED FOR DATA COLLECTION

The methodology used for the this study is trough the collection of primary and secondary data.

PRIMARY DATA

The primary data is collected from the primary source that is formal interviews , discussion with the officers and also the direct observation .

SECONDARY DATA

Secondary data is collected from the annual reports , manual ,records and the journal of the company .

LIMITATION OF THE STUDY

Due to shift arrangement it is difficult to collect data from all employees . Majority of the employees are busy with their works Some of the answers found to be biased Due to year ending the data’s collected was of 2007-08 and made assessment

with 06-07 Management did not disclose confidential data.

CHAPTER 2

INDUSTRIAL PROFILE

RETAIL INDUSTRY

Retailing is one of the pillars of the company .It consists of the sale of goods or merchandise from a fixed location ,such as a department store ,boutique or kiosk , or post ,in small or individual lots for direct consumption by the purchaser.

Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a ‘’retailer ‘’ buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end –user.

Retail establishments are often called shops or stores. Retailers are the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. The term ‘’retailer ‘’is also applied where a service provider services the needs of large number of individuals, such as a public utility, like electric power.

Shops may be on residential streets, shopping streets with few or no houses or in a shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. online retailing , a type of electronic commerce used for business –to-consumer (B2C) transaction and mail order , are forms of non –shop retailing .

Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchases.

The pricing technique used by most retailers is cost – plus pricing. This involves adding a markup amount (or percentages) to the retailer’s cost. Another common technique is suggested retail pricing. This simply Involves charging the amount suggested by the manufacturer and usually printed on the product by the manufacturer.

In western countries, retail prices are often called psychological prices or odd prices. Often prices are fixed and displayed on signs or labels. Alternatively when prices are not clearly

displayed, their can be price discrimination, where the sale price is dependent upon who the customer is.

RETAILING INDUSTRY IN INTERNATION SCENARIO

The latter half of the 20 th century, in both Europe and North America, has seen the emergence of the supermarket has the dominant grocery retail form. The reasons why supermarkets have come to dominate food retailing are not hard to find. The search for convince in food shopping and consumption, coupled to car ownership, led to the birth of the supermarket. Has incomes rose and shoppers sought both convince and new tastes and stimulation, supermarkets where able to expand the products offered. The invention of the bar code allowed a store to manage thousands of items and their prices and led to ‘just-in-time’ store replenishment and the ability to carry tens of thousands of individual items. Computer operated depots and logistical system integrated store replenishment with consumer demand in a single electronic system. The superstore was born.

On the Global Retail Stage, little has remained the same over the last decade. One of the few similarities with today is that Wal- Mart ‘s was ranked the top retailer in the world then and it still holds that distinction .Other than Wal –Mart ‘s dominance, there’s little about today’s environment that looks like the mid -1990s . The global economy has changed, consumer demand has shifted, and retailers’ operating systems today are infused with far more technology than was the case six years ago.

Saturated home markets, fierce competition and restrictive legislation have relentlessly pushed major food retailers into the globalization mode. Since the mid -1990s, numerous governments have opened up their economies as well, to the free markets and foreign investment that has been a plus for many a retailer. However, a more near –term concern, has been the global economic slowdown that has resulted from dramatic cutback in corporate IT and other type of capital spending. Consumer themselves have become much more price sensitive and conservative in their buying, particularly in the more advanced economies. Concerns in 2003 have turned to deflation, lack of pricing power, global over –capacity, low interest rate, economic stagnation, slump in the world tourism and declining consumer confidence. But, even before the global economic slowdown that forced retailers into monitoring costs more effectively, technological advances were a way of life in retail into organizations.

Technology has become the real enabler for retailer over the last six years. Supply chain innovations for retailer were particularly strong in the second half of the 1990s and have continued into today. With all the emphasis on technology and cost –cutting, a major thrust of retailer continues to be demand based: finding new markets through globalization efforts. Four years ago, more than half (53 percent) of the top 200 retailers operated in only one country. Today, only 44 per cent remain single- country merchants.

This globalization trend can only intensify in the years ahead. The benefits of increased sales and greater economies of scale are too large to be ignored.

The global retail industry has traveled a long way from a small beginning to an industry where the world wide retail sales alone are valued at $ 7 trillion. The top 200 retailers alone account for 30% of worldwide demand .Retail sales being generally driven by people’s ability (disposable income) and willingness (consumer confidence) to buy , compliments the fact the money spent on household consumption worldwide increase 68% between 1980 and 2003 . The leader has in –disputably been the USA where some two- thirds or $ 6.6 trillion out of the $ 10 trillion American economy is consumer spending. About 40% of that ($ 3 trillion) is spending on discretionary products and services. Retail turn over in the EU is approximately Euros 2000 billion and the sector average growth looks to be following an upward Pattern.

The Asian economies (excluding Japan) are expected to grow at 6% consistently till 2005-06. Positive forces at work in retail consumer markets today include high rates of personal expenditure, low interest rates, low unemployment and very low inflation. Negative factors that hold retail sales back involve weakening consumer confidence.

The Far East Experience

The food Retail Industry in the Far East has evolved into what could be called ‘the breeding ground ‘ for emergency models with countries like Singapore being the home to some of the bi players in the industry in these parts of the world .The presence of all the major players in the industry is found in Singapore . Singapore has 2 hypermarkets, one run by Carrefour and the other by Giant Hypermarkets, part of Dairy Farm International . According to the government, there are slightly more than 11000 market stalls operating in 150 markets located all across Singapore Island.

The markets further spread to China , Thailand , and Malaysia thanks to the major support that the local government provided in creating the necessary regulatory framework in establishing their presence .Singapore , Malaysia and Thailand not only fueled the retail industry with in the country , but also attracted hordes of tourists to experience the shopping “experience” that they created in these islands . The markets are now saturated with no additional space for new entrant and expected to consolidate within the next few years.

Apart from Singapore, which is more recent development, Japan enjoys an active spot on the retailers’ map. The retail industry is a huge as US $ 1008 Billion , with a split of US$ 594.8 Billion in the non food segment and US $ 493.2 Billion in the food –retailing sector .The leaders in sale are Ito-Yokado , Aeon ,Daiei , Takashimaya ,and Uny , in that order . Several retailers, however, have made recent improvements in their warehousing and distribution technologies to make their presence felt in the Japanese market. Convenience stores, which are small and suitable in a country where land is very expensive, continue to do well.

Food, in fact, has been one of the few sectors that have experienced growth over the last several years. A period of shake up in the industry is likely now that Wal –Mart has entered Japan .Numerous smaller, less efficient retailers may become takeover targets .The entire Japanese retail sector will likely undergo some form of restructuring over the next decades as a result of overcapacity, dismal profits and the Wal –Mart factor . In Mainland china, the retail markets have mushroomed over the year of intense economic development to a very considerable size. The total volume of retail sales for consumer goods and food increased by 10.6 percent in china over the last couple of years which shows tremendous growth . Consumer spending has held strong.

A decade ago, the top five retail enterprises in China were all traditional merchandise companies, but now the top five are mainly supermarkets and chain stores. The world is enamored with China‘s potential and opportunities. But in medium –sized and small cities and rural areas, traditional retailing methods, such as department stores and local retailing networks, will be sufficient, as consumption is lower.

In Indonesia, Wet markets and supermarkets remained the major distribution channels for food products. Although these retail sub –sector also offered non –food products, such as household goods, food products remained dominant in terms of the number of items. Wet markets ‘distribution of food products tended to be much greater than non-food as these retail

channels mainly provided fresh produce. Conversely, supermarkets had an almost equal distribution, with food taking up the greater proportion. On the other hand, the distribution of non-food items, such as supermarkets, hypermarkets, and convenience stores. These retail outlets provided some basic non –food products, such as tooth paste, soap, or detergent. However, non –food retail provided food items, expect certain departments stores or druggists.

In Malaysia , a majority of food retailer outlets offer food and non-food items , with at least a 70:30 distribution systems in Thailand is through so called ‘wet markets ‘ which sell fruits , vegetables , meat and fish , together with small ‘mom and pop’ food stores which distribute dry goods . However, the rapid growth of the economy, particularly during the decade before the financial crisis began, has led to dramatic changes in the structure of the food –retailing sector. Modern supermarkets, superstores, hypermarkets and convenience stores developed at breakneck pace to service the growing middle class with their demand for more sophisticated food store and a greater variety of products many of which were imported.

RETAIL IN INDIA

Though with a population of a billion and a middle class population of over 300 millions organized retailing (in the form of food retail chains) is still in its infancy in the Country. India has been rather slow in joining the Organized Retail Revolution that was rapidly transforming the economies in the other Asian Tigers. This was largely due to the excellent food retailing system that was established by the kirana (mom-and –pop) stores that continue meet with all the requirements of retail requirements albeit without the convenience of the shopping as provided by the retail chains ; and also due to the highly fragmented food supply chain that is huge value loss and high costs . This supplemented with lack of developed food processing industry kept the organized chains out of the market place.

The correction process is underway and the systems are being established for effective Business –to – Business ( farmer-processor , processor –retailer ) solutions thereby leveraging in the core competence of each player in the supply chain .

Spread of organized Retailing in India

Organised retailing is spreading and making its presence felt in different parts of the country . The trend in grocery retailing , however , has been slightly different with a growth concentration in the South India such as Nilgiri’s as early as 1904 , the retail revolution happened with various major business houses foraying into the starting of chains of food retail outlets in South India with focus on Chennai Hyderabad and Bangalore markets , preliminarily . In the Indian context , a countrywide chain in food retailing is yet to be established as lots of Supply Chain issues need to be answered due to the vast expanse of the country and also diverse that are present .

Retail Models in India: Current and Emerging

The Indian food retail market is characterized by several co –existing types and formats. These are:

1. The road side hawkers and the mobile (pushcart variety) retailers. 2. The kirana stores ( the Indian equivalent of the mom – and – pop stores of the US ) ,

within which are: a. Open format more organized outlets b. Small to medium food retail outlets

Modern trade – the organized retailers

With in modern trade, we have:

1. The discounter ( Subhiksha , Apna Bazaar , Margin Free) 2. The value – for – money store ( Nilgiris)3. The experience shop ( Food World ,Trinethra) 4. The home delivery (Fabmart)

While the focus of this note is on modern organised retail trade, we hereunder present insights into the smaller, semi and unorganized retailers

Hawkers – ‘mobile supermarkets’

The unorganized sector is characterized by the lari –galla vendors (also known as “mobile supermarket”) seen in every Indian by lane and is, therefore, difficult to track, measure and analyze .But they do know their business – these lowest cost retailers can be found wherever more than 10 Indian collect – a rural post office, a dusty roadside bus stop or a village square. As far as location is concerned, these retailers have succeeded beyond all doubt. They have neither village nor city – wide ambitions or plans – their aim is simply a long walk down the end of the next lane. This mode of ‘’mobile retailers” is neither scalable nor viable over the longer term, but is certainly replicable all over India.

Most retailing of fresh foods in India occurs in Mandis and roadside hawker parks, which are usually illegal and entrenched. These are highly organised in their own way. Hawking of food products , cooked food and FMCG products is a very interesting model of retailing .Much has been written about these roadside “malls “ – from social security issues to their nuisance value . However , if put these hawkers together , they are akin to a large supermarket with little or no overheads and high degree of flexibility in merchandise , display , price and turnover . While shopping ambience and trust factor maybe missing, these hawkers sure have a system that works.

Kirana/ Grocers/ Provision / Mom –and- Stores

Semi –organized retailers like kirana (mom-and-pop stores), grocers and provision stores are characterized by the more systematic buying – from the mandis or the farmers and selling – from fixed structures. Economies of scale are not yet realized in this format, but the front end is already visibly changing with the tines. These stores have presented Indian companies with the challenge of servicing them ,giving rise to distribution and cash flow cycles as never seen elsewhere in Asia .

The model is very antithesis of modern retail in terms of the buyer (retailer) - seller (FMCG) equations. It is not unknown for MNC leaders to link the supply of one line of products to another slower moving line of products. These retailers are not organizes in the manner that they could challenge the power of the sellers, most protests have been in the form of boycotts, which really haven’t hit any company permanently.

INTERGATION OF FOOD INDUSTRY –THE KEY DRIVER OF FOOD RETAIL IN INDIA

India is the world’s second largest grower of fruits and vegetables after Brazil and China. While the agriculture sector has witnessed several leaps of innovation and technological advancements, the processing sector is still in its infancy. Even with less than 4% processing of fruits and vegetables, the Food Processing Industry sector in India is one of the largest in terms of production, consumption within India, export and growth prospects.

The government has accorded it a highly priority , with a number of fiscal reliefs and incentives , to encourage commercialization and value addition to agriculture produce ; for minimizing pre /post harvest wastage , generating employment and export growth . As a result of several policy initiatives undertaken since liberalization in early 90’s, the industry has witnessed fast growth in the most of the segments. In the following few paragraphs , it can be noted that the processed food market for India is vast and the amount of scope that retail chains would be exposed to is phenomenal taking into consideration the demographics and raise in standards of living .

Retailers could throng the market with all these processed and packaged foods with their private labels. With the emergence of the big private corporate, NGOs (Non –Government Organizations) and Government organizations into the food processing scene, India is making big in roads into the Food Processing Industry. These corporate and NGOs have reached out to the farmers and provided them with timely advice and help in the up gradation of farm practices with valuable inputs on various areas of farming from sowing to harvesting which includes quality seed procurement , manures , fertilizers and pesticides etc.

Some of the successful models are that of ITC‘s e –choupal a model that helps the soya bean farmers in contract producing for ITC for its commodity trading business. The PEPSI experimenting with Punjab farmers in growing the right quality tomato for its tomato purees and pastes. Some of the leading food retail chains working with farmers for contract growing greens for supply to their retail outlets etc. These successful models are being replicated with required changes all over the county and the food industry is getting integrated more strongly.

India has also seen a flurry of food chain major like Mc Donald’s, Pizza Hut and Kentucky Fried Chicken finding their place among the Indian consumes. The trend still follows for food chains in India to spread to almost all cities and towns.

These advancements have revolutionized the integration of the Indian Food Industry and have played a vital role in solving, to large extent, major supply chain issues that prevailed. The trend is that these successful institution intervention models be replicated and spread in all segments of the food industry far and wide through the country that benefit all the incumbents of the chain evolve. This finally helps the retailer as his supply chain becomes much leaner and vertically integrated. He is in a position to offer a wide variety and highest degree of convenience to his customer.

ECONOMY

Economic growth at over 5.5% over the last eight years, forex reserves of over $100 billion and a stable government has helped India to look more progressively towards future. The economic development was largely attributed to its dominance in the Information Technology Sector in the global market place and its large English speaking population that made it the ideal choice for back office operations for MNC’s world ove. The manufacturing sector also provided its might to the economic development by doing global hitherto restricting to export of raw materials or intermediaries that has not graduated to supply of end product be it Pharmaceuticals or Consumer Vehicles .

All this has translated in higher income levels and more surpluses for the middle class segment that is getting ploughed into the retail sector ; again fueling the economy to higher levels .The last five years have seen PPP of average Indian middle class (over 300 millions) go up several times unleashing the power of purchasing . The retail sector was the greatest beneficiary .The need for a shopping experience combined with the convenience of shopping for the upwardly mobile middle class has been on the major factors for retail boom in India.

THE INFORMATION CONSUMER

Over the years, the increasing literacy in the country and the exposure to developed nations via satellite television or by way of the overseas work experience, the consumer awareness has increased on the quality and the price of the product / service that is expected. Today more and more consumers are vocal on the quality of the products / service that they expected from the market. This awareness has made the consumer seek more and more reliable source for purchase s and hence the logical shift to purchases from the organised retail chains that has a corporate background and where the accountability is more pronounced. The consumer also seeks to purchase from a place where his/her feedback is more valued.

EVOLUTION OF ORGANISED RETAILING

Retailing, one of the largest sectors in the global economy, is going through a transition phase in India. For a long time, the corner grocery store was the only choice available to the consumer, especially in the urban areas. This is slowly giving way to international formats of retailing .The traditional food and grocery segment has been the emergence of supermarket / grocery chains, convenience stores and fast – food chains.

The traditional grocers, by introducing self – service formats as well as value –added services such as credit and home delivery, have tried to redefine themselves. However, the boom in retailing has been confined primarily to the urban markets in the country. Even there, large chunks are yet to feel the impact of organised retailing. There are two primary reasons for this. First, the modern retailer is yet to feel the saturation ‘effect in the urban market and has, therefore, probably not looked at the other markets as seriously. Second, the modern retailing trend, despite its cost effectiveness, has come to be identified with lifestyle.

In order to appeal to all classes of the society, retail stores would have to identify with different lifestyles. In a sense, this trend is already visible with emergence of store with an essentially ‘value for money ‘image. The attractiveness of the other stores actually appeals to the existing affluent class as well as those who aspire to be part of this class. Hence, one can assume that the retailing revolution is emerging along the lines of the economic evolution of society.

It was only in the year 2000 that the economists put a figure to it Rs. 400000 crore (1 crore =10 million) which is expected to develop to around Rs .800000 crore by the year 2005 – an annual increase of 20 per cent. Retailing in India is unorganized with poor supply chain management perspective. According to a recent survey by some of the retail consulting bodies, an overwhelming proportion of the Rs. 400000 crore retail markets are UNORGANISED. In fact, only a Rs. 200000 crore segment of the market is organised. As much as 96 per cent of the 5 million – plus outlets are smaller than 500 square feet area. This means that India per capita retailing space is about 2 square feet (compared to 16 square feet in the United States). India’s per capita retailing space is thus the lowest in the World.

Currently the retail landscape is filled with Supermarket chains with over 1000 outlets all over the evolution of hypermarkets in the country prominent among them are Giant, Metro, Big Bazaar models .While the average bill value at a supermarket is in the range of Rs. 300 per bill, the average bill amount at the a Hypermarket is in the range of Rs. 750-1000, indicating that the model is in the tune with the global models where the average spend is increasing with the shopping experience.

Impact of Organised Retail

Organised retailing is spreading and making its presence felt in different parts of the country. The trend in grocery retailing, however, has been slightly different with a growth concentration in the South. Through there were traditional family owned retail chains in south India such as Nilgiri’s as early as 1905, the retail revolution happened with the RPG group starting the Food world chain of food retail outlets in South India with focus on Chennai, Hyderabad Bangalore markets, preliminarily.

The experiment has reaped rich dividends and the group is now foraying into other territories as well. Owing to the success of Food world model of RPG group, several new models such as Trinethra, Subhisksha, Margin Free and others have made their foray into this sector albeit at regional levels. Today the food retail sector in India is about Rupees Ten Lakh Crores (USD 200 billions) of which the organised food retail segment is about 1 per cent and increasing at a pace of over 20% y-o-y.

To be successful in the food retailing in India essentially means to draw away shoppers from, the roadside hawkers and kirana stores to stores to supermarkets. This transition can be achieved to some extent through pricing, so the success of food retailer depends on how best he understands and squeezes his supply chain. The other major factor is that of convenience shopping which the supermarkets has the edge over the traditional kirana stores. On an average a supermarket stocks up to 5000 SKU’s against few hundred’s stocked at an average kirana stores.

Through with excellent potential, India poses a complex situation for a retailer, as this is a country where each State is a mini- Country by itself. The demography’s of a region vary quite distinctly from others. In order to appeal to all classes of the society, retail stores would have to identify with different lifestyles. Hence we may find more of regional players and it would take enormously long time before nationwide successful retail chains emerge. This is the main reason as to why the successful retail chains in the country today operate at regional segments only and are not aiming at nationwide presence, at least for the time being.

In the organised retail industry, the gestation periods are long, institutional finding is difficult, and there is none or little Government support. But the belief among top retailer chains in the country is that the industry will see large investments coming once the current ban on foreign direct investment is lifted. But that could be two –three years away. Food and grocery retailing is a tough business in India with margins being very low, and consumers are not dissatisfied with existing shops where they buy. For example, the next – door grocery shopkeeper is smart and delivers good customer service, though not value.

As of now , while Chennai has about five organised food and grocery retail chains , other big cities such as Delhi , Bangalore ,and Mumbai average only two –three such chains . Almost all food retail players have been region – specific as far as geographical presence is concerned in the country. To illustrate with examples , the RPG Group’s food World , Nilgiris , Margin Free , Giant , Varkey’s and Subhiksha , all of which are most or less spread in the south region ; Sabka Bazaar has a presence only in and around Delhi ; names such as Haiko and Radhakrishna Foodland are Mumbai –centric ; while Adani is Ahmadabad – centric . Industry topography in India is such that spreading presence across cities going is a tough call. As pointed out by many experts, organised food and grocery retailing chains going national requires significant

investments. Retailing within this sector is not just about the front –end, but involves complex supply chain and logistics issues well.

The trend and mindset of the present retailer chains in India can be understood by studying Food World as an example, which came in the first in the food and grocery retailing sector. The chain has no plans to venture beyond the southern markets and achieve saturation. The intention is that by 2005, they could look at the other regions. Subhiksha, a Chennai based discount chain, too wants to be the principal store of purchase for at least 40 per cent of all consumers living within 500-750nmeters of the store, that is, within walking distance.

This make the point very that the strategy among most existing retail chains of various formats is to completely saturate the markets where they are already established players and then move on to virtually untouched areas where the challenges of sourcing resource and extending their supply chain model to best suit the size and expense of the market would be challenging task.

Meanwhile, the RPG group plans to take its new formats such as Giant Hypermarkets national over the next three years. Grocery is large component of this format, but not the only one. To elaborate on the hurdles of going pan- Indian, fundamentally, the way a basic grocery retailing model works is that the high set – up costs in terms of setting up buying / distribution infrastructure is gradually amortized over a larger number of stores. The back – end costs without distribution centre costs, or what in retailing jargon is called retail administration casts, should stabilize at around 2.5 per cent of sales.

It can be explained that the obstacles of looking at a pan –India model for grocery are several. Given the federal nature of the country , the weak infrastructure and the major variances in eating habits in different parts of the country , one will have to replicate the retail administration costs for at least each region and therefore , if one is to attempt a pan –India grocery foray , it will have to be in the hypermarket format with its attendant investment numbers and risk profile .

It can be explained that the obstacles of looking at a pan –India model for grocery are several. Given the federal nature of the country, the weak infrastructure and the major variances in eating habits in different parts of the country, one will have to replicate the retail administration costs for at least each regional and therefore the gestation period of the project becomes huge. However, if a model is in place where the upfront store revenues scale very rapidly, then it is possible .Therefore, if one is to attempt a pan- India grocery foray, it will have to be in the hypermarket format with its attendant numbers and risk profile.

If a close look is taken at the nature of the Indian Retail Markets, it can be seen that there is so much potential to extract from individual regions that players are in no tearing hurry to spread out. Based on recent study by a renowned government institution in India, in the six major metros, Delhi has the highest per capita consumption of food and grocery, among supermarkets. Chennai, ‘’ the Mecca of retailing ‘’, comes at fourth place. This shows the high potential the sector presents .Chennai has some five supermarkets chain and each of these are doing well for themselves. So there is enough scope to expand even in one single city in India.

Sabka Bazaar, a supermarket chain restricted to Delhi alone, is now generating sale of about Rs. 11 crore from its 19 stores which best illustration the potential of each individual city. This explains the reason for delay in intention of retailers to spread far and wide.

Pantaloon Retail (India) Ltd, which operates two type of retail formats, made its maiden foray in food and grocery retailing in North India in mid – 2003. Big Bazaar, Pantaloon group’s discount store chain, has taken off to a roaring start in Delhi. The pantaloon Big Bazaar in Delhi is the sixth for the group, and the first in North India.

It has been found that existing Big Bazaar stores in cities such as Hyderabad, Bangalore and Mumbai attract average football of 20000 to 25000 per day, more so during weekends. While Big Bazaar is essentially a discount store retailing product categories ranging from food and grocery to appeal to footwear to home and interior products , food and grocery retailing forms a significant part of the chain’s business . Typically, while food and grocery retailing does well at the beginning of the month, the apparel sector sees maximum off take during festivals.

It can be observed that the most popular retail format in India is the ‘supermarket’, beside the corner shop/ grocery store / ‘mom and pop’ store. Hypermarkets have very recently come into being and negligible in number though most retail chains do intend to expand their presence through this format as well very soon. ‘Discount chains ‘are also substantial in number and are growing at a fast pace through the country, predominantly, in the southern region.

Given that organized Retail has been registering growth rate of approximately 40 per cent over the last three years, it is expected to grow to about RS. 35000 Crore in 2005, and close to Rs 70000 crore in 2010. If projections were to be made considering the current trends in food retailing in India , some years down the line , food and grocery stores will become dominating trade partners for the food industry , which , in turn , will be forced to offer special discount and trade terms for them to get the shelf space in such stores . Also ,once established , in – store label brands will become a real threat to the industry as manufacture will have to complete with store label brands that are generally very price- competitive .

As f or the spread geographically, strong chances stand that the major chains would spread to the next grade of cities in the country over the next 5 years or so and then progressively start covering every corner of the country. Most chains have already started developing their own unique supply chains that would suit their needs precisely. Replicating the success stories of the big names of the Western nations may still be a distant dream for Indian food and grocery retailers, but at least the winds are blowing in the direction of growth.

Decadal Analysis of the Food Retail Sector

Retailing is a sunrise industry in India with many challenges like exclusion of small farms, management of processing and distribution chains. Evolution of supermarkets and fast food chains is a recent phenomenon in India. Various demand and supply side factors have contributed towards this growth.

Supply side:

The liberalization of the economy in the 1990s led to a boon in the “consumer Goods” Industry with reductions in custom duties and shift from quota to tariff based systems. Entry barriers on multinationals were largely removed after which Food Industry majors like Kellogg’s, Heinz, Tropicana, etc., entered the Indian food industry. This gave rise to tremendous development of sophisticated supply chain & logistics which eventually and gradually has led to the growth in the food processing & packaging industry.

Demand side:

The increase in the income levels of middle and higher income groups in the 1990s coupled with the reduction in poverty levels was a major factor in contributing to the increasing in demand for high quality food retailing services. Changing consumer lifestyle with the steep increase in time value , wide spread change in the Indian family structure from vast Join Hindu families to more manageable nuclear families and increasing level of quality awareness has also helped the cause of the Food Retailing Industry considerably .Another major factor that has accelerated the growth of the Indian Food Retailing sector has been the advent of cable television and the increasing instances of overseas travel by Indians for various reasons .

Government Policy on Food Retailing – India

100% FDI in retailing in not allowed per say , foreign retailers can operate in India through joint venture , where the Indian partner is a export house , Franchising / Local manufacturing /Sourcing from small –scale sector ,cash and carry operations . The McKinsey report states FDI will help the retail businesses to grow from the present $200 billion to $460 -470 billion by 2010.

Growth of supermarkets in most developing countries (Brazil, China etc) took off in the 1990s after FDI was allowed in this sector which is not in the case in the Indian scenario. Retailing is not regarded as an industry very few banks are willing to invest in this sector. The shortage of warehousing facilities, cold storage and large scale processing units has obstructed the growth

of Food Retailing Industry in India. As supply chain is fragmented & marked by existence of large number of intermediaries, organised retailing has been a very tough proposition. India is still in the second and third party logistic provider mode while fourth party logistic models have become global standards for logistic providers.

Retailing is subject to a plethora of laws and regulations at central, state and municipal / local levels, some of which have listed below:

-Restrictive zoning legislation limits availability of land for retail / commercial purpose

-Restrictions on interstate movement of food grains deprive farmers from getting remunerative prices.

-Restrictive Labor laws

-Urban land ceiling regulation, restriction on shop opening timings requirements for shops to close once a week

- There is no uniform tax structure –multiple layers of taxes

Supplier Retailer Relationships

Traditionally the supplier – retailer relation in India comprised several layers such as the national distributor, the regional wholesaler and the end retailer. However this scenario is fast changing with the organised retail increasing its presence in the country where the relationship is directly with the manufacturer. However this new model has been affecting the relationships that the manufacturer enjoys with the traditional system which is still the most dominant in the entire retail sector.

The issue of differential pricing is being taken up at several forums and the growing dissatisfaction among the traditional retailers is being addressed by the manufactures. However

we see that in the long term, the role of a national distributor would slowly fade away or get restricted to the rural / upcountry regions.

The supplier – retailer relationship would come under severe pressure as each party would try to squeeze maximum margins out of the other.

Innovations in Transportation Logistics

The logistics service providers have been innovating several interesting formats and models for the retail sector. As of now, organised retail chains in India do not, by far, outsource logistical requirements, they develop their own network. This was basically due to the fact that the supply – chain was still in its infancy stage, which has begun to mature and the systems are being well defined. As retail chains begin to focus more and more on the retail end, the logistics support would begin to get outsourced.

The logistics service providers have begun to come out with innovative customized solutions for the retail chains such as GATI’s model for distribution of Alphonso mangoes throughout the country with the Information Technology support.

Formats

Currently the retail sector in India is populated with the traditional mom-and –pop stores and some 1000 odd supermarkets under organized retail chains. A daring few ventured into the Hypermarket segment will successful results and this format is being fast replicated by other players. This experience indicates that the Indian consumer has matured to the next level of

shopping experience. Given the Indian conditions and the vast diversity a single format may not be possible for the national presence, but region specific formats may evolve.

An interesting observation is that of lack of presence of organised retail chains in the rural /semi – urban centers as over 60% of Indian population is still in these parts. An ideal “no frills “model to start with , would to start with , would be ideal for the rural markets , this would help to take them to the next level of supermarket experience .

Social Trend

Social trends o a country have impact on the scheme of growth of food retailing in a country. India is country that is vast geographically and drives culturally. This has taken its toll on food retailing with retailers having to adapt to the local cultures and palates of the area in which they have established or plan to establish .This is a major reason for many or most retailing chains restricting their operations to a certain part of the country. But the trends now are slowly moving towards cultural integrations where people of all states and diametrically opposite culture tend to try out foods and materials of other states and communities. This movement towards social integration would make it very feasible in the near future for retailing chains and erstwhile local chains to spread across the country.

Increased income levels and more women willing to make use of their education by joining work as increasingly affected the shopping pattern that is moving towards fulfilling the need of convenience shopping in the form of supermarkets (now graduating to hyper format ) home deliveries . Indian consumer is quality and price conscious and this awareness would drive the retailers to rework their supply chain relationships.

A recent analysis shows that countries go through a distinct food consumption evolutionary pattern. In the first stage the focus is on obtaining basic dietary inputs, the second stage focuses on improving and building basic food, before moving to the third stage of adding premium food to the diet. Most of urban India has already moved to the third stage and it is a great avenue for food retailers, if they could slowly introduce the rest of India to it.

The future would witness creation of specific models / formats one for the upwardly mobile urbanite and other for the rural markets. Also since the taste habits change from place to place in India, there would emerge a leading.

Online Retailing

The single most important most evolution that took place along with the retailing revolution was the rise and fall of the dotcom companies. A sudden concept of “non store “shopping emerged, which threatened to take away the potential of the store. More importantly the very nature of the customer segment being addressed was almost the same. The computers –savvy individual was also a sub segment of the ‘store’ frequenting traffic .Internationally the concept of Net shopping is yet it be proven . And the poor financial performance of most of the companies offering virtual shopping has resulted in store –based retailing regaining the upper hand.

The forms of non store shopping including various formats such as catalogue /mail order shopping, directs selling, and and so on is growing rapidly. However, the size of the direct market industry is too limited to deter the retailers. For all the convenience that it offers, electronic retailing does not suit products where ‘look and see’ attributes are of important , as in apparel , or where the value is very high , such as jewellery , or where the performance has to be tested , as of consumer durables . The most critical issue in electronic retailing, especially in a country such as ours, relates to payments and the various security issues involved.

However, using the internet to be able to source products and also check for availability of stock among store of retail chains has been proven to be effective and cuts down on wastage by a vast amount. It makes logistical support very easy and efficient. The trend in India such that usage of the electronic medium for business purpose and integrating it into the systems is increasing. This would slowly spread into the retailing sector as well. It has already started in the case of some large retail houses where the affects has here to see. This again would result in the supply chain getting leaner and vertically integrated. Though the initial costs to implemented these systems are high, in the in the long run it results in cost reduction where as this privilege can be passed on to the final consumer.

Impact of Technology

The other important aspect of retailing relates to technology. It is widely felt that the key differentiator between the successful and not so successful retailers is primarily in the area of technology. Simultaneously, it will be technology that will help the organised retailer score over the unorganized players, giving both cost and service advantages.

Retailing is a ‘technology – intensive ‘industry. It is quoted that everyday at least 500 gigabytes of data are transmitted via satellite from the 1200 point – of –sale counters of JC Penney to its corporate headquarters. Successful retailers today work closely with their vendors to predict consumer demand, shorten lead times, reduce inventory holding and thereby, save cost .Wal –Mart pioneered the concept of building a competitive advantage through distribution and information systems in the retailing industry. They introduced two innovative logistics techniques –cross –docking and electronic data interchange. Today, online system link point – of –sales terminals to the main office where detailed analyses on sales by item, classification, stores or vendors are carried out online. Besides vendors, the focus of the retailing sector is to develop the link with the consumer.

‘Data Warehousing ‘is an established concept in the advanced nations. With the help of ‘data retailing ‘, information on existing and potential customers is tracked. Besides knowing what was purchased and by whom, information on softer issues such as demographics and psychographics is captured.

Retailing is at a nascent stage in India. Most organised players have managed to put the front ends in place, but these are relatively easy to copy. The relatively complicated information systems and underlying technologies are in the process of being established. Most grocery retailers such as Food World have started tracking consumer purchases through CRM .The lifestyle ‘retailers through their ‘affinity clubs ‘ and ‘reward clubs’ are establishing their process . The traditional retailer will always continue to exist but organised retailers are working towards revamping their business to obtain strategic advantages at various levels – market , cost , knowledge and customer .With differentiating strategies – value for money , shopping experience , variety , quality , discounts and advanced systems and technology in the back – end , change in the equilibrium with manufacturers and a thorough understanding of the consumer behavior , the ground is all set for the organised retailers .

Food safety Issues:

As awareness grows about food safety issues, the need for countries to provide greater assurance about the safety and quality of food also grows. The increase in the world food trade and the advent of the Sanitary and Phytosanitary (SPS) Agreement under the World Trade Organization (WTO) has also raised interest in food safety requirements. To ensure a strong presence in global markets, India realizes the need to meet these challenges and keep pace with international developments.

In India , it has come to the notice of general public of late that very “popular “ food companies could also go wayward as far as food – safety and public health is concerned . This has triggered off a drive by the public and the government to put more stringed food safety and public health measures in place while manufacturing, storing and packing of foodstuffs takes place. Most foodstuffs pass through the organised retail channels on their way to the purchase baskets of consumers and therefore the retailers are beginning to realize the need for food safety and security. Grading and standardization measures are being taken at various stages of the manufacturing, processing, packaging, and storing of all kinds of food materials.

To ensure food safety and maintain product integrity from the source to the customer (farm –to-plate) the Food Retailing Companies would have to establish a totally integrated infrastructure and service package. This connects and maintains the flows of food from the source (farmers/ food growers, farm service centers, market yards, processors, importers ) to the customer (foodservice outlets, food processing units, food retailers and food exporters). This package will help eliminate or prevent identified hazards or reduces them to acceptable levels. This trend is slowly beginning to take shape with the efforts to integrate and consolidate the supply chain in Indian Food Retailing.

The Codex, HACCP (The Hazard Analysis Critical Control point) and food – hygiene standards have been adopted by the Bureau of Indian standards, the national standard body in India .Food processing units are being encouraged to adopt these systems on a voluntary basis.

Organization like VOICE(Voluntary organized in the interest of Consumer Education ) have undertaken the responsibility to document the existing level to implementation of National Laws concerning labeling and packaging of imported food products , to analyses and compare with the Indian made food products and similar imported food products in terms of adherence of the National Laws , to prepare a well- documented camping kit for the consumer groups in India on the study to sensitize and build awareness among consumers on seeking and demanding mandatory information on all packaged food products .

India’s Top Food Retailers

Food world Hs become India’s largest and fastest growing supermarket chain. Today, over 89 stores offer customers a variety of brand at a reasonable price. Food world in India is an alliance between the RPG groups in India with Dairy Farm International of the Jar dines Matheson Group. Food world aims at establishing 100 stores all over Tamilnadu, Andhra Pradesh Karnataka and Maharashtra by mid – 2004 with a turnover of Rs. 500 crores

It is a supermarket chain that has predominant presence in the southern state of Andhra Pradesh with 66 stores spread over 8 districts of the state. Their turnover was Rs. 78.8 crores for the year 2002-03.This figure is expected to touch the Rs. 100 crore mark by 2003-04. The Trinethra group came into being as a single store in the year 1986. They plan to saturate their presence throughout the state of Andhra Pradesh before venturing into two more southern states of the country. The group plans to venture into the lower level regions like smaller towns and mandals by using the franchisee – model. They are also very clear that they would be setting up three hypermarkets in the state soon

Apna Bazaar , the Rs 140 - crore consumer co-operative society with a customer base of over 12 lakh , plan to Cater to an upwardly mobile urban population – a first for the 55-year-old chain that has mostly been identified with the ‘middle class ‘ . The plans include trimming and training the workforce , opening new outlets and focusing on the FMCG sector . Now , the co-operative has 80 outlets in Mumbai , Thane and the neighboring Konkan region . It has recently opened its first shop outside the state in Goa . The avenue target for 2003-04 is Rs .150 crore .

The chain plans to remain open all day of the week and this itself is expected to fetch about Rs 10 crore a year .

Big Bazaar -Pantaloons, After Bangalore , Hyderabad and Kolkata , BIG Bazaar , a division of pantaloon Retail (India ) Ltd has stretched its brand to Mumbai by opening three hypermarket in the city . Offering discount ranging from 5 per cent to 60 per cent , discount stores is still a nascent concept in India . Big Bazaar launched its stores in Bangalore , Hyderabad and Kolkata. Marking an investment of Rs 10 crore into this new division , Pantaloon is expects to record the highest turnover from its Mumbai stores to the tune of almost Rs 80 crore from Mumbai alone within the first year operations . But the turnover from its other Big Bazaar stores in Bangalore , Hyderabad and Kolkata is Rs 50 crore this year . Big Bazaar claims to be India’s first chain of hypermarket discount stores.

Margin Free – The Kerala based Margin Free disc ount stores , the ‘pure retail ‘ chain with arguably the largest presence in the country . The retail store is uniformly spread across the 240-odd Margin Free franchisees in Kerala , Tamil Nadu and Karnataka .Margin Free draws inspiration from the undying loyalty of its customers who have wholeheartedly welcome all its growth plans in the past . Margin Free palns to open huge hypermarkets (50.000sq.ft each ) in Ernakulam , Thivandrum , and Kozhikode in the immediate future .

Subhiksha The Chennai – based retail food and pharmacy chain subhiksha supermarket and pharmacy is in expansion model . It plans to go national and have 400 stores in the next two years . Currently , Subhiksha has a strong presence only on in Tamil Nadu and Pondicherry with over 150 stores . The decision to expand outside Tamil Nadu , is because the city has reached saturation and also , the purchasing power is high in large metros . Subhiksha stores sell households items and medicines at significant discount to normal prices. The retail chain earned a total revenue of Rs . 235 crore in 2002-03 . The first Subhiksha store was opened in Tiruvanmiyur in Chennai in March 1997 . Today, the chain has about 164 outlets in Tamil Nadu and Pondicherry . In 1997-98 Subhiksha was making a turnover of Rs 12 crore and a profit of Rs 10 lakhs . In 2003 it has grown to Rs 224 crores turnover and Rs 3 crores profit . Major plans are on in Karnataka to open 40 stores in Bangalore in the next nine months and another seven stores in Mysore in the same period . In all , it is intended to open at least 250 stores by 2005 . The group is looking at extending operations in Karnataka and also venturing into the Maharashtra , Andhra Pradesh and Gujarat markets .

Nilgiris Muthusamy Mudaliar opened a small bunk shop in Ooty That was in 1905 and the beginning of a long story in procurement and customer satisfaction . In 1936 , the shop moved to Bangalore with its registered office on Brigade Road, a small shop exactly where the huge mother store is now located . The first expansion happened when Muthusamy Mudaliar’ son Chenniappan , also the chairman , established Nilgiris as a modest store carrying Nilgiris’ own products , mostly dairy and bakery . Eventually , it evolved into a supermarket when Mr , Chenniappan visited the U.S. and Europe and was influenced by the old supermarket concept in the west . This chain has now blossomed to cover a vast region in South India with 26 outlets and annual sales of about Rs . 2300 Millions . They plan to open an additional 30 outlets in their next phase of expansion .

MTR –The MTR Group of companies promoted by the family of MAIYAS took birth in the year 1924 with the commencement of a Restaurant in Bangalore . Later In 1976 , MTR ventured into the business of retailing of Groceries and other household general items by opening a Department stores .MTR first bought a packaged , processed food product. Subsequently , efforts were made to extend the distribution of the above products to few other prominent Retail stores in Bangalore , such as Nilgiris , Vijaya Bakery , Shivananda Stores , Home Needs etc. The response was found to be very encouraging in terms of sales of the above products. Consequently , a major step with respect to marketing was taken by the group in the year 1983 . It was during 1983 that MTR appointed Distributors in Bangalore , Madras , Hyderabad and Vijayawada with a view to capture business opportunities in the said markets .

Janatha bazaars & HOPCOMS – Cooperative Departmental stores were started with Government patronage in the early 1960’s at a time when shortage of basic goods was the order of the day . Poor marketing strategies hindered their progress in the field . Total membership 11680 farmers , with 100 tonnes of horticultural produce being traded per day in eight districts . In 1998, each cooperative society was made independent , sixteen of which were subsequently federated at the state level , as members of the Karnataka Horticulture Federation .

Presence of MNC chains

Metro AG – opened its first Indian outlet in Yeshwanthpur , Bangalore on a sprawling 6500 square metres area . Proposed to open one more centre in Bangalore during November 2003 . Capital expenditure for these two centres in Rs 176 crores ( 35 million euros ). Employ 300 local people and head quarter will employ 750 local people .

Retailing In Kerala

Retailing in Kerala is a subject too subtle and relevant ; as Kerala is know of more as a consumer state rather than a producer state . The introductions of Margin Free Markets have turned out to be grand success resulting in it becoming one of the largest retail chains in the country .

Reliance Fresh

It is the convenience store format part of the retail business of Reliance Industries of India which is headed by Mukesh Ambani . Reliance plans to invest in excess of Rs 25000 crores in the next 4 years in their retail division . The company already has in excess of 560 reliance fresh outlets across the country . These stores sell fresh and vegetables , Staples , groceries , fresh juice bars and dairy products .

A typical Reliance Fresh store is approximately 3000-4000 square feet and caters to a catchment area of 1-2 km .

Varkeys Bakery and Supermarkets

It is the laeding supermarket chain in kerala , india . Keeping pace with the growing customer needs the first Discount Hypermarket- “V – Mart’ was started in 2004 at Cochin , Kerala ,India .

Both Varkeys Bakery and Supermarket and V –Mart , Hypermarket comes under the banner Varkey Retail Ventures Pvt .Ltd

The stores and its concept have played a vital role in revolutionizing the taste & shopping patterns of the people of Kerala . Providing all the needs of a households under one roof , it has made its mark as a “single stop shop “ for its customers . With an approach that beats the traditional stores .

This idea made itself big in 1984 when Mr. Ittiachan foresaw that the household shopping pattern would swing from traditional stores to Supermarkets. The stores provide a medium for the consumers to witness a wide variety of products available in the market , both manufactured as well as imported . Our network of supply chain and manufacture has grown gradually over the years with human resource , machinery and vehicles . The years of practical know –how sets apart in every manner we execute the details of the job . The stores follow a uniform “policy “ emphasizing importance on the Quality , Price , Service.

Margin Free Markets

Margin Free Markets is the largest retail chain in the state Kerala one of the leading retail chains in India .

The first outlets of this chain started functioning on 26th January 1994 at Trivandrum . Currently more than 275 franchisees of Margin Free Markets spread all over south

India . The outlets are franchises and are not actually owned by the chain Currewntly controlled by The consumer protection & Guidance Society

The consumers are assured of quality , quantity and the fair price of the goods sold through the Margin Free Markets . These shop deals with goods like grocery , food and non- food FMCG items , fruits and vegetables , consumer goods & households 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 permanent customers , by taking discount cards , which permit them to obtain larger discounts than the non – card holders.

The necessity of offer protection against the rising 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 ‘consumer ‘ state than a ‘producing ‘ state .

Kerala depends on her neighboring states for her consumer needs . Due to the large number of intermediaries involved and the transportation costs, the price are high and there is a wide fluctuation in prices of groceries , fruits and vegetables . Groceries and FMCG goods are brought directly from the production units of the neighboring states .

In the process of direct purchase from farmers and manufactures , the intermediaries are removed and a part of the margin or ‘profits’ earned is disbursed among the consumers. The distribution to the different outlets under the chain is taken as a collective responsibility and is done with the objective to reduce the total transportation costs .

Food World

Food World is one of the biggest retail chains in India .The RPG group opened the first Food World outlet on May 9th 1996 at Chennai . It is the only national chain , having Foreign Direct Investment to the extent of 49% that is permitted in India .

Food World , operates as a 51:49 joint venture with Dairy Farm International of the Jardine Matheson Group ,as US $ 4.5 billion retail giant operating in the Asia –Pacific markets with the requisite experience .

Food World has decided to concentrate more on local areas rather than to go for a nationwide presence in its expansion plans at the beginning .

Food World product Portfolio includes grocery of all kinds ,. Fresh foods via ., fruits and vegetables in fresh / chilled /frozen form , food that can be directly consumed , food and non – food FMCGproducts , general merchandise required in homes like buckets , cups , shelves etc. Indian Made Foreign .

To source its daily requirements of fruits and vegetables , Food World participants in the early morning autions at the major wholesale markets and has a set of suppliers who then grade , clean , packand label the products in the time for early morning dispatch to the stores . At peak season , the Fruit & vegetables shelf in a food world store stocks around 125 items ; making it the widest range available under one roof in this category .

Food World’s share of the organized retail market in the cities in which it operates is 62% clearly a dominant share . The firm expects the number of Food World stores to increase to 125 by the end of 2005 . A smaller version , Food World Express is also planned to be launched in future .

Supply Co

The kerala state civil supply corporation (supplyco) , is a statutory body established in 1974 .

Procures rice, wheat products , sugr ,pulses, vegetables and a range of consumer goods . It has a network of 663 retail outlets called Maveli stores, 11 supermarkets in district headquarters and 21 mobile Maveli vans operating on designated routes .

The Government decides the price of articles sold by Supplyco through these shops , and has used it as highly effective mechanism , cutting out middleman and controlling prices in the open market. Its effect on the market are most evident during the festival season s.

E tendering introduced by the Corporation , enables participation of more tenders from anywhere in the world , thereby increasing competition . This ensures the entry of genuine suppliers from the production centers of other States . The introduction of a payment system at the receiving depot itself spot pyment to suppliers . The suppliers will get ready payment on the same day as delivery of goods through a demand draft couriered to them . This reduces

unnecessary delay and complexity in payment procedure , which again results in the reduction of purchase cost

INFERENCE

Retailing is one of the pillars of the company. Retail establishments are often called shops or stores. Retailers are the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. . According to the government, there are slightly more than 11000 market stalls operating in 150 markets located all across Singapore Island. The retail industry is a huge as US $ 1008 Billion , with a split of US$ 594.8 Billion in the non food segment and US $ 493.2 Billion in the food –retailing sector .The leaders in sale are Ito-Yokado , Aeon ,Daiei , Takashimaya ,and Uny , in that order. The correction process is underway and the systems are being established for effective Business –to – Business ( farmer-processor , processor –retailer ) solutions thereby leveraging in the core competence of each player in the supply chain . India is the world’s second largest grower of fruits and vegetables after Brazil and China. While the agriculture sector has witnessed several leaps of innovation and technological advancements, the processing sector is still in its infancy. Economic growth at over 5.5% over the last eight years, forex reserves of over $100 billion and a stable government has helped India to look more progressively towards future. 100% FDI in retailing in not allowed per say , foreign retailers can operate in India through joint venture , where the Indian partner is a export house , Franchising / Local manufacturing /Sourcing from small –scale sector ,cash and carry operations . The McKinsey report states FDI will help the retail businesses to grow from the present $200 billion to $460 -470 billion by 2010.

CHAPTER 3

COMPANY PROFILE

ADITYA BIRLA GROUP

A US $28 billion premium conglomerate, the Aditya Birla Group is the League of Fortune 500. It is anchored by an extraordinary force of 100000 employees, belonging to 25 different nationalities .The Group has been adjusted “The Best Employer in India and among the top 20 in Asia “by the Hewitt-Economic Times and Wall Street Journal study 2007. Over 50 per cent of its revenues flow its overseas operations.

The Group operates in 25 countries –India , UK, Germany ,Hungary , Brazil, Italy ,France ,Luxembourg , Switzerland , Australia ,USA , Canada , Egypt, Thailand , Laos , Indonesia, Philippines , Dubai , Singapore, Myanmar, Bangladesh , Vietnam , Malaysia , and Korea.

Globally the Aditya Birla Group is

A metals powerhouse, among the world’s most cost –efficient aluminum and copper producers.

Hindalco –Novelis is the largest aluminum rolling company.

It is one of the 3 biggest producers of primary aluminum.

In Asia

No.1 in visoose slaple fiber The 4th largest producer of carbon black The 11th largest cement producer Among the world’s top 15 BPO companies and among India’s top 4

Among the best energy efficient fertilizer plants

In India

A premier branded garments player The 2nd largest player in viscose filament yarn The 2nd largest in the Chlor – alkali sector Among the top 5 mobile telephony companies

A leading player in Life Insurance and Asset Management Among the top 3 super market chains in the Retail business

Rock solid in fundamentals, the Aditya Birla Group nurtures a culture where success does not come in the way of the need to keep learning afresh, to keep experimenting.

Beyond business –The Aditya Birla Group is:

Working in 3700 villages Reaching out to 7 million people annually through the Aditya Birla Centre for

Community Initiatives and Rural Development , spearheaded by Mrs.Rajashree Birla

Focusing on : health care , education , sustainable livelihood , infrastructure and espousing social causes

Running 41 schools and 18 Hospitals.

Aditya Birla Retail Ltd

Retailing consists of the sale of goods or merchandise from a fixed location , such as department store, boutique or kiosk , or by post , in small or individual lots for direct consumption by the purchaser . Retailing may include subordinate service , such as delivery .

Purchasers may be individuals or business . In commerce , a “retailer “ buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler , and then sells smaller quantities to the end –user .Retail establishments are often called shops or stores.

Retailing are at the end of the supply chain . Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy .The term “retailer’’ is also applied where a service provider services the needs of a large number of individuals , such as a public utility , like electric power .

Shopping generally refers to the act of buying products . Sometimes this is done to obtain necessities such as food and clothing ;sometimes it is done as a recreational activity .

Recreational shopping often involves window shopping (just looking , not buying ) and browsing and does not always result in a purchase.

ABRL , the nation’s biggest retail company now operates 640 more supermarkets and 2hypermarkets all over India .

After years of commitment & passion to turn around they now have an incredible position in Indian retail industry . They become the pioneer in this sector by beating its competitors . The company has around 11000 employees and pan India presence .

Largest industry in India Employment of around 8% Over 10% of the country’s GDP 5th largest retail destination globally

Company Overview

1987- Mr . Anjaneyalu founded Trinethra super retail 1999-Foundation of Fabmall 2004- india value Fund acquire Trinethra and Fabmall and established Trinethra Super

Retail Private Ltd . 2007- Aditya Birla group entered into retail business ,established Aditya Birla Retail ltd

and they acquire Trinethra Super Retail Pvt LTD . 2007- Aditya Birla group launched its first supermarket ‘more for you’ 2008 – The company has set up 640 supermarkets and two hypermarkets . All the

supermarkets (including the former Trinethra stores) are now branded MORE and hypermarkets are branded MORE Mega store . The company has around 11000 employees and has a pan India presence .

DEPARTMENTS

BUYING AND ADVERTISING

SUPPLY CHAIN MANAGEMENT

BUSINESS DELOPMENT AND PROJECT

HRCOMMERCIAL MARKETING LOSS PREVENTION

DISTRIBUTION CENTER

LOGISTICS QUALITY CONTROL

ACCOUNTS

IT OPERATION EXCELLENCE

ORGANISATIONAL STRUCTURE

INFERENCE

The Aditya Birla Group has been adjusted “The Best Employer in India and among the top 20 in Asia “by the Hewitt-Economic Times and Wall Street Journal study 2007. Over 50 per cent of its revenues flow its overseas operations. The Group operates in 25 countries –India , UK, Germany ,Hungary , Brazil, Italy ,France ,Luxembourg , Switzerland , Australia ,USA , Canada , Egypt, Thailand , Laos , Indonesia, Philippines , Dubai , Singapore, Myanmar, Bangladesh , Vietnam , Malaysia , and Korea. Beyond business –The Aditya Birla Group is: Working in 3700 villages .Reaching out to 7 million people annually through the Aditya Birla Centre for Community Initiatives and Rural Development , spearheaded by Mrs.Rajashree Birla .Focusing on : health care , education , sustainable livelihood , infrastructure and espousing social causes, Running 41 schools and 18 Hospitals. ABRL, the nation’s biggest retail company now operates 640 more supermarkets and 2hypermarkets all over India.The company has around 11000 employees and pan India presence .

Largest industry in India Employment of around 8% Over 10% of the country’s GDP 5th largest retail destination globally

CHAPTER 4

FUNCTIONAL AREAS OF ADITYA BIRLA

RETAIL LIMITED

BUYING &MERCHANDISING

ABRL implement ‘best in class’ buying and merchandising . They work with our clients to

Sell more through local range and space optimization Reduce stock holding and improve availability Implement product lifecycle and category management Integrate ecommerce and retail merchandising Make better decisions through business intelligence Select , design and implement B&M systems

INVENTORY MANAGEMENT AND CONTROL

Inventory is the reservoir of stocks in anticipation of future sales . The efficiency of logistics management depends on how it manages inventory because the companies’ investment is lying in the form of finished goods .Overt stocking of inventory will leads to increasing carrying cost and the same time , running out of stock will result in loss of customers .

So it should maintain a balanced inventory which would be ready to meet a customer order immediately . Therefore , the objective of inventory management must be to maintain a balanced stock which would keep the inventory carrying costs minimum .

Inventory Levels can be divided into three types ;

Working cost Lead –Time cost Safety stock

Working cost This is the required to meet customer orders before the next order is place.

Lead – time cost

This is the stock required to meet orders expected between the times that the new order is placed and new supply is received .

Safety stock

This is the stock required to meet orders in the event of any error in estimating the proper level of working stock .

Economic Order Quality (EOQ)

EOQ is the size of the order to be placed at any time for a given product in the company Accepting the supply of the product less than EOQ size is not economic and will mean operating in loss .EOQ is the size of an order which gives maximum economy in procuring materials and ultimately contributes towards maintaining materials at a minimum cost.

Storage (Inventory location and warehousing)

Warehousing – It is designed and operated by a firm for long term storage of finished products .

Distribution centers – It operates essentially to consolidate the finished products and arranges the dispatch of products to customers .

Materials handling ,quality checking , packaging and labeling

Materials handling is the important activity in the physical distribution . It involves receiving , moving , storing and assembling of products to customer requirements . Certain products need almost care to avoid damage . Products that are packaged in bottles cans and other soft materials must combine into larger units to protect them by corrugated boxes , plastic or wooden containers to avoid damage during the logistics process.

Quality control is a process employed to ensure a certain level of quality in a product or service . It may include whatever actions a business deems necessary to provide for the control and verification of certain characteristics of a product or service . The basic goal of quality control is to ensure that the products , service , or processes provided meet specific requirements are dependable , satisfactory ,and fiscally sound .

Packaging – Its major function is to protect the product inside it , but at the same time it must be attractive . Like a product design , style aesthetic appeal , the packaging of the product must also look attractive . An intact and stylish package design may draw the attention and instant recognition of buyers at showroom shelves . The attractive package design my have high self impact

Following are the important features of packaging ;

To protect the product inside from the damage

Be convenient to handle and durable for repeat uses Attractive design and stylish look Create a feeling of pride in owing the product / brand Have a label which provides detailed information about the product

Labeling – It is a part of packaging . Everyday packaged product must have a label pasted or printed on it . It carries the brand name of the product and provide information about its contents and features. It may even provide instruction to the users .

Following are the features of labeling

Provide detailed information about the contents and features of the including exact net weight if it is processed food or health drink item

It should mention the item Warnings , legal restrictions in using the product and safety of the product in use

should be mentioned It should note life of the product , product price , product quality , warranty and

service after sales . It may provide information about any other benefit such as gifts or rebate at the

retail point Any information that is valuable to consumers should also be mentioned .

Transportation and customer delivery

It is an important function in the physical distribution . The logistical system must be designed in such a way as to minimize the transportation cost . It includes fifty per cent of the products price . An efficient logistical management must balance two things

Minimizing transportation cost Speed delivery to satisfy the consumer

ABRL using private carriage for transportation purposes to the different supermarkets

What will more . for you deliver to it’s shoppers?

The more. for you advantage is it promise a world – class pleasurable shopping experience to Indian consumers in their very own neighborhood

Delivery cornerstone of more ?

More . Quality

Every product at more. Goes through a through quality check process ensuring 100 per cent more. Satisfaction

More . Variety

Apart from a large range of national brands , shoppers will also find a section called the Best of India , which is an assortment of unique products sourced from across India . The wide range of fresh fruits and vegetables along with private label offering under brand names value , select and premium ensures that more . Variety is a promise delivered across the store

More . convenience

Convenient locations within easy reach of consumers and a neat , cheerful and friendly layout , enough isle space , signage that speaks the consumer’s language aiding in identifying what she has come to shop for easily , all go a long way in ensuring more. Convenience

More . value

More . promises best in market pricing . Linking up directly with farmers to source fresh fruits , vegetables and staples ensure great quality as well as great price . Add ti this, the membership program Clubmore , which provides convenience , customized shoppingSolutions and savings ,’and the more.value promise becomes all the more evident.

More supermarket

More . for you – conviently located in neighborhoods , more. Supermarkets cater to the daily . weekly and monthly shopping needs of consumers . The product offerings include a wide range of fresh fruits and vegetables , groceries , personal care , homecare , general merchandise and a basic range of apparels . Curently , there are over 600 more . Supermarkets across the country .

More . Hypermarket

More . hypermarkets – is a one –stop shopping destination for the entire family . Besides a large range products across fruits and vegetables , groceries , FMCG products , more. MEGASTORE also has a strong emphasis on general merchandise apparels and CDIT .

SUPERMARKET

With a vision is to be among the leading retail players in India Aditya Birla Retail launched its first supermarkets, more. For you in May , 2007. Since its launch , the more. For you has as aggressive roll out , reaching a total count of over 600 stores across India today .more . for you is a neighborhood supermarket to customer which take care of very day household needs and more . Spread across a wide range of fruits and vegetables , staples , personal care , home care , household care products , general merchandise , and dairy products .

More . for you provide a onestop solution for you grocery shopping needs , Also in store are essential such as , innerwear , kids essential , and a pharmacy , bakery and a mobile store. With a range of over 4000 products , they are able to fulfill the customers daily shopping needs all under one roof , at a convenient location .

The more . for you promises a world class shopping experience , with a modern store layout , easy to shop with friendly staff at hand to provide assistance , electronic billing facilities and a colorful ambience . At more . for you they offer branded food and grocery products sourced from the leading brands from all over India , along with

private label brands from their own portfolio – available in a broad selection for customers always giving the best possible value for money .

Product and services

At more, for you they are committed to deliver quality & value to customers and have a range of private label brands as well as commercially branded products , offering -100% satisfaction on the quality of the product & services offered.

More. For you hosts a range of private label brands across various categories that follow stringent quality norms , and are available in attractive prices and packaging . Its premium products give the customer the opportunity to enjoy the difference and quality that is equal to or better than the market’s leading , but at competitive prices.

Recently their private label brands received the coveted “ The Most Admired Private Label “ Golden spoon award at the Food Forum India .

More. for you offer a wide range of assortment of over 4000 products , ranging from fresh food to beverages , grocery to households care products . Their range covers everything , from day –to –day essentials to traditional favorites , from delicious treats , to healthy alternatives

To ensure the freshest supply of fruits and vegetables for customers ,they have built direct linkages with the farmers for daily supplies of farm fresh produce .

The stores are built with a modern and comfortable ambience , air conditioned and with speedy automated cashiering to help shop better . They also have friendly in –store policies on exchange and returns that help shop with ease and comport .

To make shopping experience more rewarding , at more . for you a membership program Clubmore. Which reinforces their commitment to consistently add value to shopping experience .As a clubmore . Member , customers are entitled to special benefits ,besides the regular offers and promotions at more . for you . Club more. members will also have the benefit of receiving exclusive SMS alerts for special offers on their products and service . Currently Clubmore has over 1 million members enrolled for its loyalty program .

The table below is the product categories available in more stores :

Bakery Beauty concepts Beverages Basic Apparels Cutlery &cookware Fruits & vegetables Frozen & Dairy products FMCG Products Grocery General Merchandise Home care products Home Needs& Home Upkeep Home Decor products Mobile store Personal Care & cosmetics Processed food Ready to Cook/ Prepared Food Small White Appliances Staples Stationery Women’s Accessories

What is unique about more?

Modern retail design Private label brands Loyalty programme to customers called Club more Attractive incentives schemes to frontline staffs Customer centre organization Unique employee engagement programmes for all staff

Store experience

Good ambience Neat , cheerful and friendly layout World class shopping experience Private label brands Enough space Very clean and well organized stores Customers takes their to browse the store Create attraction

STRATEGIC INTENT

Vision

“To consistently provide the Indian consumer complete and differentiated shopping experience and be amongst India’s Top retailers , while delivering superior returns to all stakeholders’”.

Mission

To change the way people shop and given them more

Quality policy

ABRL is committed to assure consumers of quality of products and services on a consistent basis and earn consumer trust and recognition of ABRL as India’s premier retail organization . The above will be achieved by :

1. Ensure that the products available at the stores meet the regulatory and statutory requirements through implementation of best practice (Good Manufacturing Practice , Good Hygienic Practices, Good House Keeping etc)at every stage and in every operation.

2. Ensuring that for ‘Own Brand ‘ the products meet stringent specification requirements ; while at processing sites and extended supplychain , the manufacturing practices and processes meet the highest standards of GHP & GMP at every stage andin every operation .

3. Ensuring that manpower resource are committed , competent , fully trained and working in a seamless manner .

4. Ensuring that different functions including buying & merchandising , supply chain , management , operations and business partners understand and share concern for quality .

5. Implementing a rigorous , credible & efficient assessment , inspection , testing & certification system.

6. Striving for continuous improvement through dynamic review process .

ABRL is also committed to respecting our Corporate Social and Environment responsibilities

Values

People contribute when they relate to an organized and they relate , when they understand the organization . People understand an organized through its value , by experiencing the culture that values create and by using the systems and processes that the values define. In large organizations , such shared understanding cannot be created through leadership of individuals alone ; it requires leadership of principles , of beliefs , of conviction . These together constitute what they call “ Value” . It comprises;

Integrity commitment passion seamlessness speed

INTERGRITY

At Aditya Birla Group , Intergrity is defined as :

Acting and taking decisions in a manner that these are fair , honest , following the highest standards of professionalism and are also perceived to be so . It is not only financial and intellectual integrity , but in all other forms as are commonly understood .

Key words that connote Integrity are :

Ethical Truthful Principal transparent Upright Respectful

COMMITMENT

At Aditya Birla Group , commitment is defined as:

On the foundation of Integrity , doing whatever it takes to deliver value to all stakeholders .In the process, taking ownership for own actions and decisions .

Key words that connote are :

Accountability Discipline Responsibility Results- Orientation Self- Confidence Reliability

PASSION

At Aditya Birla Group , Passion is defined as

As missionary zeal arising out of emotional engagement with the organization that makes work joyful and inspires each one to give or her best . Relentless pursuit of goals and objectives with the highest level of energy and enthusiasm , that is voluntary and spontaneous .

Key words that connote are :

Intensity Innovation Transformational Fire –in-the-belly Inspirational Deep Sense of Purpose

SEAMLESSNESS

At Aditya Birla Group , Seamlessness is defined as : Thinking and working together across functional silos, hierarchies , businesses and geographies. Leveraging the available diversity to garner synergy benefits and promote oneness through sharing and collaborative efforts .

Key words that connote are:

Teamwork Integration Involvement Openness Global Learning from the best Empowering

SPEED

At Aditya Birla Group ,Speed is defined as :Responding to internal and external customers with a sense of urgency . Continuously seeking to crash timelines and choosing the right rhythm to optimize efficiencies.

Key world that connote are ;

Response time Agile Accelerated Timelines Nimble Prompt

They are all equally important and no Value will take precedence at the cost of the other . It is in the harmonization of the five that they see the prospect of greater value creation for all stakeholders .

OWN BRAND PRODUCTS

Own label Food Brands

-feasters Kitchen’s Promise

-Feasters biscuits

-Feasters great taste

-Selrcta atta

-Selecta tea powder

-Silectra rice etc.

Home and Personal care brands

-Enriche bath soap

-Enriche sunscreen lotion

-Enriche body mist

-110% detergent bar

-110% powder

-110% surface cleaner

-110% toilet cleaner

-Pestex

-Paradise

-AU 79 Deodrant

-Germe

-Kara-tissue paper

-Prarthana –agrarbathies

DEPARTMENT FUNCTON

The main objective of the study is to familiarize with all the department of the origination . The study also enabled to understand the various functions and responsibilities which are assigned to them .

The department helps in specialization of work I each field . It helps in better planning and better concentration in the particular work handled by a particular department .In Aditya Birla Retail Ltd , mainly three departments are there

Buying and Merchandising Department Supply chain Management Department Business development Project Department Commercials Department Human Resource Management Department Marketing Department Information Technology Department Loss prevention Department Operation excellence Department

A) Buying & Merchandising Department

Planning of and merchandising is one of the biggest challenges that may multistore retailer faces . Getting the mix of product, which is store specific across organization , is a combination of customer insight , allocation and assortment techniques .

Merchandising is more than simply the arrangement of products on the shelf . It is an integral component of the business image. It should be considered when you design your logo, business cards, brochures, letterhead , packaging , and product mix.

What the customer’s experience , from their first sight of store front , until they leave store- hopefully with a purchase in hand is an important thing . Merchandising is about understanding the way customers shop. It necessary to create an environment that attracts the customer, is comfortable to shop , and encourage the customer to return . These are some important thing

Are the store front and windows attractive & inviting ? Is all signage clear ,professional and legible? Is the store interior welcoming and comfortable ? Is the merchandising presentation appealing? Are seasonal and high – margin merchandising placed in high profile locations? Overall , is the store appearance professional ?

One of the exciting things about retail is that it is dynamic . If there is no any grow and change , customers assume that there are nothing new to offer them ., Rotate merchandising , change displays ,and change signage , all these will make the customer to think that there is always something new them to see or experience

Including merchandising is your marketing plan and budget make sense . It can make the difference between selling a product , or having it sit on the shelf.

ABRL implement ‘best in class’ buying and merchandising .

They work with their customers to

Sell more through local range and space optimization Reduce stock holding and improve availability Implement product lifecycle management Integrate e commerce and retail merchandising Make better decision through business intelligence

INFERENCE

Buying & Merchandising Department is an integral component of the business image. It should be considered when you design logo, business cards, brochures, letterhead , packaging , and product mix. Buying & Merchandising Department is to create an environment that attracts the customer, is comfortable to shop , and encourage the customer to return.

B) Supply Chain Management Department

Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service package required by end customers .Supply chain management spans all movement and storage of inventory, and finished goods from point of origin to point of consumption

This department comprises.

Distribution centres Logistics Quality control Reprocessing centres

DISTRIBUTION CENTRE – A distribution centre for a set of products is a warehouse or other specialized building , often with refrigeration or air conditioning , which is stocked with products (goods) to be re-distribution centre is a principle part , the “order processing’’ element , of the entire “order fulfillment “ process . Distribution centers are usually thought of as being “demand driven” . A distribution centre can also be called a warehouse , a DC , a fulfillment centre , a cross – dock facility , a bulk break centre , and a package handling centre . The name by which the distribution centre is known is commonly based on the purpose of the operation. For example a “ retail distribution centre ‘’ normally distributes goods to retail stores, a “order fulfillment centre “ commonly distributes goods directly to consumers, a cross – dock facility stores little or no product but distributes goods to other destinations .

Distribution centers are the foundation of a “supply network “ as they allow a single location to stock vast number of products .Some organizations operate both retail distribution and direct –to-consumer out of a single facility sharing space , equipment , labor resources and inventory as applicable .

The way a typical retail distribution network operates is to have centers setup throughout a commercial market . Each centre will then service a number of stores . Large distributions centers for companies such as Wal- Mart service 50 -125 stores . Suppliers will ship truck of products of the distribution centre . The distribution centre will then store the product until needed by the retail location and ship the proper quantity .

Since a large retailer might sell tens of thousands of products from thousands of vendors , it would be impossibly inefficient to ship each product directly from each vendor to each store. Many retailers own and run their own distribution networks, while smaller retailers may outsource this function to dedicated logistics firms that coordinated the distribution of products for a number of companies .A distribution centre can be co-located at a logistics centre .

QUALITY CHECKING – Quality checking is a process employed to ensure a certain level of quality in a product or service . It may include whatever actions a business deems necessary to provide for the control and verification of certain characteristics of a product or service . The basic goal of quality control is to ensure that the products, service ,or processes provided meet specific requirements and are dependable , satisfactory ,and fiscally sound.

Essentially , quality control involves the examination of a product , service , or process for certain minimum levels of quality . The goal of a quality control team is to identify products or services that do not meet a company’s specified standards of quality . If a problem is identified , the job of a quality control team or professional may involve stopping production temporarily . Depending on the particular service or product as well as the type of problem identified , production or implementation may not cease entirely .

Usually , it is not the job of a quality control team or professional to correct quality issues . Typically , other individuals are involved in the process of discovering the cause of quality issues and fixing them . Once such problems are overcome , the product , service, or process continues production or implementation as usual.

Quality control can cover not just products ,services and processes , but also people . Employees are an important part of any company . If a company has employees that don’t have adequate skills or training , have adequate skills or training , have trouble understanding directions , or are misinformed , quality may be severely diminished . When quality control is considered is terms of human beings, it concerns correctable issues. However , it should not be confused with human resource issues.

Often , quality control is confused with quality assurance . Through the two are very similar , there are basic differences. Quality is concerned with the product , while quality assurance is process- oriented .

Even with such a clear –cut difference defined, identifying the differences between the two can be hard , Basically , quality control involves evaluating a product , activity , process, or service . By contrast , quality assurance is designed to make sure processes are sufficient to meet objectives , Simply put , quality assurance ensures a product or service is manufactured , implemented , created , or produced in the right way ;while quality control evaluates whether or not the end result is satisfactory

In ABRL supply chain management is a cross – function approach to manage the movement of finished goods into the company and out of the organized towards the end consumer . Supply chain be grouped into strategic , tactical , and operational levels of activities .Supply chain activities can be grouped into strategic , tactical and operational levels of activities

STRATEGIC

Strategic network optimization , including the number , location, and size of warehousing ,distribution centers, and facilities .

Strategic partnership with suppliers , distributors, and customers , creating communication channel for critical information and operational improvements such as cross docking, direct shipping , and third –party logistics

Product life cycle management , so that new and existing products can be optimally integrated into the supply chain and capacity management

Information Technology infrastructure , to support supply chain operations Where –to-make and what-to-make –or-buy decisions Aligning overall organizational strategy with supply strategy

Tactical

Sourcing contracts and other purchasing decisions Production decisions , including contracting ,scheduling and planning process

definition. Inventory decisions , including quantity , location, and quality of inventory . (Benchmarking) of all operations against competitors and implementation of

best practices throughout the enterprise. Milestone payments Focus on customer demand

Operational Daily distribution planning , including all nodes in the supply chain. Demand planning and forecasting , coordinating the demand forecast of

all customers and sharing the forecast with all suppliers Sourcing planning , including current inventory and forecast demand , in

collaboration with all suppliers. Inbound operations , including transportation from suppliers and

receiving inventory . Operations , including all fulfillment activities , warehousing and

transportation to customers Distribution centers , and other customer.

INFERENCE

Supply chain management spans all movement and storage of inventory, and finished goods from point of origin to point of consumption. This department comprises ,Distribution centers, Logistics , Quality control ,Reprocessing centers . Large distributions centers for companies such as Wal- Mart service 50 -125 stores . A distribution centre can be co-located at a logistics centre . The basic goal of quality control is to ensure that the products, service ,or processes provided meet specific requirements and are dependable , satisfactory ,and fiscally sound. Supply chain activities can be grouped into strategic , tactical and operational levels of activities

C) Business Development and Project Department

This department for the overall development of the organizational activities

(1) UNIQUE SELLING PROPOSITION

A USP is an abbreviation which is used by the likes of retail and advertising companies which stands for ‘unique selling proposition’ or ‘unique selling point’ . it actually dates back to the 1940s but it is still a widely used business term in today’s marketplace and forms the basis for many highly successful marketing campaigns .

What is The point of A USP ?

A USP is an important aspect of marketing as retailers operate in a very competitive world and a unique selling point is often used as a means of encouraging existing customers to stay loyal and as method of trying to convince your competitors’ customers to switch over to your company. USP needs to be able to make the company its products stand out from the rest in order that consumers will choose over competitors and increase sales as a direct consequence .

What are the benefits of having a USP ?

There are two primary benefits of having a USP

It enables to create a distinction between the company or particular product and that of competitors.

It acts as a focal point for workforce , giving them a clear vision of what’s important to the company so that they are able to deliver upon the promise of the USP itself .

(2) LOYALTY PROGRAMME

CLUBMORE.

Which reinforce the companies commitment to consistently and value to customers shopping experience . As a Clubmore, member, customers are entitled to special benefits , besides the regular offers and promotion at more. for you .

INFERANCE

Business development and project department is the most important department in this industry . This department provide several promotional strategies like Unique selling Proposition ,Loyalty Programme, publicity and public relations. This will encourage people to buy more products.

D) COMMERCIAL DEPARTMENT

Finance is the art and science of handling money . Finance is the blood line of business, without blood a living creature cannot survive , in the same it is impossible for an organized to survive without proper finance activity .It is the finance which brings together various segments of organizations and transforms them in to an integrated whole so that it may function smoothly and move in direction of achieving the goal of the organization.

In Aditya Birla Retail Ltd the commercial department is responsible for all the accounting function . The head of this department has the equal rights and responsibilities as compared to the managing Director of the organization in general matters .

The department is also responsible for collection and settlement of claims with respect to financial matters . Arrange the funds for the smooth functioning of the organization and maintain purchase register , sales register, cash book , journal ,ledger , bank register , expenses register .

Functions of commercial department

Maintenance of accounting records Income receipt maintenance Makes payment of purchases Salary maintenance Maintenance of all vouchers Preparation of final accounts Auditing

INFERENCE

In Aditya Birla Retail Ltd the commercial department is responsible for all the accounting function. The head of this department has the equal rights and responsibilities as compared to the managing Director of the organization in general matters . This department is also responsible for collection and settlement of claims with respect to financial matters . Arrange the funds for smooth functioning of the organization and maintain purchase register ,sales register , cash book ,journal , ledger , bank register, expenses register .

E) HUMAN RESOURCE MANAGEMENT DEPARTMENT

HRM is the strategic and coherent approach to the management of an organizations most valued assets – the people working there who individually and collectively contribute to achievement of the objectives of the business . The term “human resource management “and “human resource “ (HR) have largely replaced the term” personnel management “ as a description of the processes involved in managing people in organization . In simple sense , HRM means employing people , developing their resources, utilizing , maintaining and compensating their services in tune with the job and organization requirement .

HRM comprise several processes . Together they are supposed to achieve the above mentioned goal . These processes can be performed in an HR department , but some tasks can be also outsourced or performed by the line- managers or other departments , When effectively integrated they provide significant economic benefit to the company.

Workforce planning Recruitment Induction and orientation Skills management Training and development Personnel administration and time management Performance appraisal

Workforce planning is the business process for ensuring that an organization has suitable access to talent to ensure future business success .Access to talent includes considering all potential access sources (employment , contracting out , partnerships, changing business activities to modify the types of talent required , etc . By talent is meant the skills , knowledge , preposition and ability to undertake required activities including decisions making . Strategic planning considers the business risks concerning insufficient , disrupted , mis-deployed talent on the organizations business priorities .

Strategic work planning is analogous to the treasure role which is concerned with ensuring the organization has suitable access to working capital . This role also looks at multiple source for access and similar risks to those mentioned above.

One of the more restrictive and potentially dangerous assumptions is that strategic planning is only about talent in the form of employees . Hiring is a strategy for accessing talent and will often be the superior one . However , the use of employees to meet talent needs carries with unique risks that can be mitigated using alternatives access sourcing arrangements . Regardless of the access source used, insightful assessment of the strategy’s attendant business risk is prudent .

The process for starting workforce planning is link with the organizations strategy . This means identifying the critical talent needs that if not met can materially adversely impact success . Once the business risks are fully appreciated then attention turns to schedule and timing . Assessing current internal capability and assessing its relative position when it will be called upon in the future . Speculating on future sourcing

options and identifying the preferred sourcing option . Implementation and execution follow .Attention to periodically reviewing the “sanity” of the current plan is prudent .

Recruitment refers to the process of screening , and selecting qualified people for a job at an organization or firm , or for vacancy in a volunteer –based some components of the recruitment process, mid and large –size organizations and companies often retain professional recruiters or outsource some of the process to recruitment agencies . External recruitment is the process of attracting and selecting employees from outside the organization.

The recruitment industry has four main type of agencies : employment agencies, recruitment agencies , recruitment website and job search engines, “headhunters” for executive and professional recruitment , and in- house recruitment . The stages in recruitment include sourcing candidates by advertising or other methods ,and screening and selecting potential candidates using tests or interviews

Skills managements is the practice of understanding , developing and deploying people ans their skills .Well – implemented skills management should identify the skills that jog roles require , the skills of individual employees and any gap between two .

Training and development The term training refers to the acquisition of knowledge , skills and , competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific useful competencies . It forms the core of apprenticeship and provides the backbone of content at institutes of technology . In addition to the basic training required for trade , occupation or profession , observers of the labour –market recognize today the need to continue training beyond initial qualifications:to maintain , upgrade and update skills throughout working life .people within many professions and occupations may refer to this sort of training as professional development .

Training differs from exercise in that people may dabble in exercise as an occasional activity for fun . Training has specific goals of improving one’s capability , capacity and performance .

The training programs of ABRL are ;

New hire training

Refreshers training Stand up training Need based training.

Personnel administration and time management – It refers to a range of skills , tools ,and goals . This set encompass a wide scope of activities , and these include planning , allocating , setting goals, delegation , analysis of time spent , monitoring , organizing , scheduling ,and prioritizing . Initially time management referred to just business or work activities , but eventually the term broadened to include personal activities also . A time management system is a designed combination of processes , tools and techniques .

Performance appraisal ,also known as employee appraisal , is a method by which the job performance of an employee is evaluated (generally in terms of quality , quantity ,cost and time ). Performance appraisal is a part of career development . Performance appraisals are regular reviews of employee performance within organizations . The aims of a performance appraisal are to :

Give feedback on performance to employees. Identify employee training needs Document criteria used to allocate organizational rewards Form a basis for personnel decisions :salary increases ,promotions ,disciplinary

actions ,etc

INFERENCE

The functions of Human Resource Management are employing people , developing their resources, utilizing , maintaining and compensating their services in tune with the job and organization requirement .HRM comprise several processes like workforce planning ,Recruitment ,Induction and Orientation ,Skills management ,training &Development ,Personnel administration and Time management and Performance appraisal .

F) MARKETING DEPARTMENT

In today’s CRM landscape the old analogy comparing the rifle and shotgun approaches to message and/ or offer delivering in perhaps more appropriate than ever , as more retail organization struggle to achieve one-to –one marketing communications with customers and prospects .

Targeting allows a retail enterprise to channel in marketing budget where there is the greatest (and fastest) possibility of Return On Investment (ROI).

In terms of overall business strategy . your ability to identify and understood consumers helps you make accurate estimates about the potential for your products and services in a given market , as well as support and direct merchandise development strategies to both new and existing customers .

Whether your target is current customers or new prospects , in markets known or unknown , an effective targeting model reduces the risk of any venture .

Blending Demographic ,Behavioral , Expenditure and Media preference data with retailer - specific data and applying data mining technologies produces Zip +4 and postal code level data assets that consistently outperform all other direct marketing techniques.

In addition , methodology that should be used must be dynamic to allow the sights to be reset frequently to keep targets in focus consistently .

INFERENCE

With the help of marketing department to understand the connections between the lifestyle and expenditure characteristics of customers , their propensity to purchase one product or brand over another , and leverage this understanding for competitive advantage . Improve direct marketing response by ensuring they are targeting the right households at the right time, using the right media with the right message. Increase customer loyalty and retention with a scientific , data driven approach to analytical CRM.

G) INFORMATION TECHNOLOGY (IT) DEPARTMENT

Information technology is the study , design ,development , implementation , support, or management of computer – based information systems , particularly software applications and computer hardware .IT deals with the use of electronic computers and computer software to convert , store , protect, transmit and securely retrieve information .

Today , the term information technology has ballooned to encompass many aspects of computing and technology , and the term has become very recognizable . IT professionals perform a variety of duties that range from installing applications to designing complex computer networks and information database ,. A few of the duties that IT professionals perform may include data management , networking ,engineering computer hardware , database and software design , as well as the management and administration of entire systems .

When computer and communication technologies are combined , the result is information technology , or “infotech” . Information technology is a general term that describes any technology that helps to produce , manipulate , store , communicate , and /or disseminate information . Presumably , when speaking of IT as a whole , it is noted that the uses of computers and information are associated .

It is widely felt that the key differentiator between the successful and not so successful retailers is primarily in the area of technology . Simultaneously , it will be technology that will help the organised retailer score over the unorganized players , giving both cost and service advantages .

Retailing is a ‘technology –intensive ‘ industry . It is quoted that everyday at least 500 gigabytes of data are transmitted via satellite from the 1200 point-of-scale counters of JC Penney to its corporate headquarters . Successful retailers today work closely with their vendors to predict consumer demand , shorten lead times , reduce inventory holding and thereby , save cost .

Online systems link point –of –scale terminals to the main office where detailed analyses on sales by item , classification, stores or vendors are carried out online . Besides vendors , the focus of the retailing sector is to develop the link with the consumer .’Data Warehousing’ is an established concept in the advanced nations . With the help of ‘database retailing ‘ information existing and potential customers is tracked . Besides knowing what was purchased and b y whom , information on softer issues such as demographics is captured .

Retailing is at a nascent stage in India . Most organized players have managed to put the front ends in place , but these are relatively easy to copy .

The relatively complicated information systems and underlying technologies are in the process of being established . Most grocery retailers such as Food World have started tracking consumer purchases through CRM . The lifestyle retailers through their ‘affinity clubs’ and ‘rewards clubs’ are establishing the processes.

The traditional retailers will always continue to exist but organised retailers are working towards revamping their business to obtain strategic advantages at various levels – market ,cast, knowledge and customer. With differentiating strategies –value for money , shopping experience , variety , quality ,discounts and advanced systems and technology in the back-end , change in the equilibrium with manufactures and a thorough understanding of the consumer behavior , the ground is all set for the organized retailers .

Application of IT in ABRL is

Business networks – which coordinate purchasing , inventory and payments Touch screen billing NAVATION software –intended for inventory management

INFERENCE

IT deals with the use of electronic computers and computer software to convert , store , protect, transmit and securely retrieve information. . IT professionals perform a variety of duties that range from installing applications to designing complex computer networks and information database ,. A few of the duties that IT professionals perform may include data

management , networking ,engineering computer hardware , database and software design , as well as the management and administration of entire systems . Retailing is a ‘technology –intensive ‘ industry . It is quoted that everyday at least 500 gigabytes of data are transmitted via satellite from the 1200 point-of-scale counters of JC Penney to its corporate headquarters . Successful retailers today work closely with their vendors to predict consumer demand , shorten lead times , reduce inventory holding and thereby , save cost .

(H) OPERATION EXCELLENCE DEPARTMENT

Operation excellence is a philosophy of leadership ,teamwork and problem solving resulting in continuous improvement throughout the organization by focusing on the needs of the customer , empowering employees , and optimizing existing activities in the process.

These departments are for the overall excellence of the entire activities of the company . Adapting tactics for the development of the organization are the main task of this department .

INFERENCE

Operational Excellence’s values lie within Safety , Quality ,Productivity ,Human Development , Cost , and Implementation of OE .Operational Excellence stresses the need to continually improve by promoting a stronger teamwork atmosphere. Safety and quality improvements for employees and customers lead towards becoming a world –class enterprise.

AWARDS AND ACHIEVEMENT

Reid & Taylor Awards 2009 Aditya Birla Retail Limited was presented the prestigious “Retail Best Employer of the

Year “ at the REID & TAYLOR AWARDS FOR RETAIL EXCELLENCE….

Aditya Birla Group ranked the No:1 Best Employer by the Hewitt –Economic Times Survey 2007

The US $ 24 billion Indian conglomerate ,Aditya Birla Group , was ranked number one in India and among the best in Asia .

Golden Spoon Award – Most Admired Food Retailer of the Year :Private label F&G brand

The coca- cola Golden Spoon Awards honors enterprise , innovation and achievement in the business of food .

Best VM at Asia Summit more . for you supermarket won the Visual Merchandising &Retailing Design merit award for the Best VM in the supermarket Category

CHAPTER 5 SWOT ANALYSIS

STRENGTHS

Variety of brands Apart from a large range of national brands , shoppers will also find a section called the Best of India , which is an assortment of unique products sourced from across India . The wide range of fresh fruits and vegetables along with private label offering under brand names value , select and premium ensures that more . Variety is a promise delivered across the store

Good infrastructureThe stores are built with a modern and comfortable ambience , air conditioned and with speedy automated cashiering to help shop better . They also have friendly in –store policies on exchange and returns that help shop with ease and comport .

High quality products Every product at more. goes through a through quality check process ensuring 100 per cent more. Satisfaction. To ensure the freshest supply of fruits and vegetables for customers ,they have built direct linkages with the farmers for daily supplies of farm fresh produce

Good locationConvenient locations within easy reach of consumers and a neat , cheerful and friendly layout , enough isle space , signage that speaks the consumer’s language aiding in identifying what she has come to shop for easily , all go a long way in ensuring more. Convenience

Quality checking I t is the process employed to ensure a certain level of quality in a product or service . It may include whatever actions a business deems necessary to provide for control and verification of certain characteristics of a product or services .

Private brand label More. for you hosts a range of private label brands across various categories that follow stringent quality norms , and are available in attractive prices and packaging . Its premium products give the customer the opportunity to enjoy the difference and quality that is equal to or better than the market’s leading , but at competitive prices.

Unique Selling Proposition

It enables to create a distinction between the company or particular product and that of competitors and it acts as a focal point for workforce , giving them a clear vision of what’s important to the company so that they are able to deliver upon the promise of the USP itself

Visual merchandising

It educating the customers about the product /service in an effective and creative way and drawing the attention of customer to enable him to take purchase decision within shortest possible time, and thus augmenting the selling process.

Loyalty programme Loyalty programme like CLUBMORE Which reinforce the companies commitment to consistently and value to customers shopping experience . As a Clubmore, member, customers are entitled to special benefits , besides the regular offers and promotion at more. for you .

More promotional activities Publicity is the one of the promotional activity , it is non personal stimulation of demand for product by way of arranging commercially significant news to have appeared in mass media.

WEAKNESS

Payment issues The issue of differential pricing is being taken up at several forums and the growing dissatisfaction among the traditional retailers is being addressed by the manufactures .

People prefer window shopping- Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchases.

Existence of shrinking and dump The objective is to maximize profits through reducing retail theft , also known as shrinkage . And dump in the case of decayed vegetables .In ABRL , it is reported that more than 1% shirkage and 10% dump would cause monthly

Absence of research department is one of the weakness of this firm

OPPURTUNITIES

Arrival of new technologies

The other important aspect of retailing relates to technology. It is widely felt that the key differentiator between the successful and not so successful retailers is primarily in the area of technology. Simultaneously, it will be technology that will help the organised retailer score over the unorganized players, giving both cost and service advantages.

Increasing work women population Increased income levels and more women willing to make use of their education by joining work as increasingly affected the shopping pattern that is moving towards fulfilling the need of convenience shopping in the form of supermarkets (now graduating to hyper format ) home deliveries.

Changing life styles Changing consumer lifestyle with the steep increase in time value , wide spread change in the Indian family structure from vast Join Hindu families to more manageable nuclear families and increasing level of quality awareness has also helped the cause of the Food Retailing Industry considerably .

Winding up of competitors store Winding up of competitors store leads to opportunity to this firm

Existing Indian middle classes with an increased purchasing power.

Higher income levels and more surpluses for the middle class segment that is getting ploughed into the retail sector ; again fueling the economy to higher levels .The last five years have seen PPP of average Indian middle class (over 300 millions) go up several times unleashing the power of purchasing.

Heavy influx of FDI

100% FDI in retailing in not allowed per say , foreign retailers can operate in India through joint venture , where the Indian partner is a export house , Franchising / Local manufacturing /Sourcing from small –scale sector ,cash and carry operations . The McKinsey report states FDI will help the retail businesses to grow from the present $200 billion to $460 -470 billion by 2010.

THREATS

Shifts in consumer tastes away from the firm’s products The taste habits change from place to place that will affect firm’s product.

Competitors

Main competitors of ABRL are Reliance Fresh, Spencer’s Daily, Big Bazaar, Nilgiris, Varkeys ‘supermarket, Margin Free Market

CHAPTER 6

POTRER’S FIVE FORCE ANALYSIS

PORTER’S FIVE FORCE ANALYSIS

Porter’s five force analysis is a framework for the industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in1979. It uses concepts developed in Industrial Organization (IO) economics to derive five force which determine the competitive intensity and therefore attractiveness of market . Attractiveness in this context refers to the overall industry profitability . An “unattractive ‘’ industry is one where the combination of forces acts to drive down overall profitability . A very unattractive industry would one approaching “pure completion “ . The porter’s five force analysis tool is a simple but powerful tool for understanding where power lies in a business situation. This is useful , because it help you understand both the strength of your current competitive position , and the strength of a position you are looking to move into. Five force analysis there are five important forces that determine competitive power in a situation .

Porter’s five force analysis in ABRL

Porter’s five forces framework helps to make a qualitative evaluation of a firms strategic position . By conducting this analysis we should be able to understand that the final external influence upon the organization is the competitive environment . We should also be able to understand that the competitive strategy of an organization and the need to secure particular competitive advantage over competitors are important . We will find that an appraisal of the competitive environment is vital before plans laid down.

THREATS OF NEW ENTRANTS

Aditya Birla Retail Ltd has attained the economies of scale as it’s per unit cost of production .Retail industry is a profitable industry that earn high returns.

It has the capacity to retaliate when new firm enter into the industry

The product of the company is highly differentiated because of the quality of the product. So the customers can easily distinguish company’s product from others.

ABRL has many branches and distribution channels and they are under control

It enjoys a high brand loyalty among its customers.

Thus the threat of new entry is very low for ABRL

BARGAINING POWER OF SUPPLIERS

Aditya Birla Retail Ltd has fixed certain standards in terms of price and quality for their suppliers

Supplier concentration is more in ABRL

The bargaining power of supliers play a vital role in ABRL .company has direct connection with the manufactures.

So ABRL has high bargaining power of suppliers

BARGAINING POWER OF BUYER

Concentration of buyers are low in ABRL

Products are differentiated so bargaining power of buyer is low

Hence the power of buyer is low in case of ABRL

COMPETITIVE RIVALRY

The company is a global player, of course it has competitors. It has competitors both in the

domestic market as well as in the global market.

The company has the established products and has continues to maintain its leadership in the

industry. So the competitive rivalry is high. Since the company has many branches across the

world its exit barriers are high. In Kerala ABRL’s main competitors is Reliance fresh, Varkeys

supermarket etc.

In short company has exit barriers and threat from competitors.

THREAT OF SUBSTITUTE PRODUCTS

In ABRL retail stores the company provides own brand products like feasters tasty biscuits ,Selecta salt ,Selecta rice ,Enriche bath soap etc .Its substitute products are established brand like Lux soap , Sabari tea powder etc.the brand loyalty problem arises in such case but the trend of brand loyalty is less in nowadays .

So the problem of treat of substitute product is less

CHAPTER 7

FINDINGS AND SUGGESTIONS

FINDINGS

ABRL has good infrastructure facility Existence of quality checking process It has direct linkage with the farmers for daily supplies of farm fresh produce. In ABRL the stores are built with a modern and comfortable ambience It has speedy automated cashiering ABRL provides Modern retailing ABRL ensures high quality products The employees in the ABRL are experienced and technology skilled ABRL providing better training to the workers In ABRL supermarkets the product choice are less Main competitors of ABRL are Reliance Fresh , Spencer’s Daily ,Big Bazaar , Nilgiris, Varkeys ‘

supermarket, Margin Free Market

SUGGESTIONS

ABRL should have to rotate merchandise , change displays ,change signage , all these will make the customer to think that there is always something new for them to see or experience .

It should utilize the all the resources like Men, Money, Machine, Materials available to the organization effectively.

ABRL should improve product choices to compete with the competitors ABRL should provide effective training to the employees and make them aware about

their role is there society Introduction of productivity based incentives and motivation of the employees Effective strategy for the development of the entire organization The participatory management activities should be implemented , before taking major

decision the management should discuss with employees It should improve the planning strategy and develop new retail formats and channels The company needs to plan effective retail store roll- out strategies The company should have to adopt a research program to prioritize new retail markets

and define how to enter them

The company should have to evaluate and execute new retail ventures and acquisitions

ABRL should develop business plans and financial projections to cope with the competitors .

CHAPTER 8

CONCLUSION

CONCLUSION

Indian retailers must come to recognize the value of building their own stores as brands to reinforce their marketing Positioning , to communicate quality as well as value for money .Sustainable competitive advantage will be dependent on translating core combining products , image and reputation into a coherent retail brand strategy .

The total concept and idea of shopping has undergone an attention drawing change in terms of format and consumer buying behavior , ushering in a revolution in shopping in India .Modern retailing has entered into the Retail market in India as is observed in the form of bustling shopping centers , multi –storied malls and the huge complexes that offers shopping, entertainment and food all under one roof .

A large young working population with median age 24 years , nuclear families in urban areas , along with increasing working –women population and emerging opportunities in the service sectors are going to be the key factors in the growth of the Organised Retail Sector in India . The growth pattern in organised retailing and in the consumption made by the Indian population will follow a rising graph helping the newer businessmen to enter the Indian Retail Industry .

The future of retailing looks bright , with the proposed entry of majors . The government of India is already thinking of allowing FDI of up to 76% in the grocery and food segment

of the retail chains . According to government Estimates , retailing is growing at a rate of 5.7% at the national level , even though the organised retail sector is just 3% of the total industry . This would intern generate good revenues for the companies and is likely to effect the lifestyle of the people as Kerala is known as a consumer state rather than a producer state ..