Modern Retail 08.08

8/7/2019 Modern Retail 08.08

1/19

RetailingRetailing

Retail is the sale of goods to the end users, not forresale, but for the use and consumption of the

purchaser.

Retail Industry in India is the second largest employer afterAgriculture. It contributes to 10 % of GDP and 6-7 % of the

Employment


2/19

Organised RetailingOrganised Retailing

USAUSA 80 %80 % Western European CountriesWestern European Countries 70 %70 %

ArgentineArgentine 40 %40 %

ThailandThailand 40 %40 % ChinaChina 20 %20 % MalaysiaMalaysia 20 %20 % IndiaIndia 06 %**06 %**

** FDI (Foreign Direct Investment is allowed partially)** FDI (Foreign Direct Investment is allowed partially)

Country Wise Share:Country Wise Share:


3/19

Top 7 Global RetailersTop 7 Global Retailers

Rank Name ofRetailer Sales

GrocerySales

(%)

(USD Bn)

1 Walmart - USA 235 44%

2 Tesco- UK 63 75%

3 Carrefour-France 58 84%

4 Home Depot -USA 55 51%

5 Kroger - USA 55 70%6 WalGreens -USA 52 75%

7 Aldi Group- Germany 48 18%


4/19


5/19

Growthoforganized Retail inGrowthoforganized Retail in

IndiaIndia Organized Retail is 5.5 % ofthe total Retail Industry and

expected to Growby 10% by 2012.

Increasing Consumer aspiration

Growing noofNuclearfamilies

Growing Size ofworking women segment

Demand from tier II and III cities and rural

markets.

Large young working Population


6/19

Category Volume % Margin % Weightage %

Oils 30 5-7 14

Pulses 17 16-18 22

Rice 17 12-13 16

Flours 11 12-14 10Spices 10 22-28 20

Sugar 9 6-7 5

Dry Fruits 3 20-25 7

Salt 1 25-30 2

Wheat 1 15-18 1

Staples Share in Retail StoreStaples Share in Retail Store


7/19

Buying Behaviors StaplesBuying Behaviors Staples

Any item that is washed before cooking, the consumerpreferstobuy it loose as its economical.

Items such as Dals, Rice & Wheat mostly sells In loose.

Dals - No National Brand, all are Pvt label of the Retailers.

Items like Atta, Edible Oil, Powered Spices, salt etc is sold inpackets (Branded), because of its Hygienic aspect.


8/19

North

Plano- Category Wise Stacking

Stacking from Left To Righ

tStacking from Top to Bottom

Cont.


9/19

PlanoPlano Bay Allocation forBay Allocation for

32BM32BMFamily Bay

32

OIL 6.00

Rice 6.00

Pulses 6.00 ,, Toor 2Flours 3.50 Mung 1

Wheat 0.50 Chana 1

Spices 5.00 Urad/ Masoor 1

Salt 0.50 Minorpulses 1Sugar 2.50

DF 2.00

Total 32.00


10/19

Pulses Mix in Modern RetailPulses Mix in Modern Retail

Major dal - 85 % Toor, Urad, Moong and Chana, Kabuli and Masoor

Minor dal - 15 % Green peas, White Peas, Chitra, Red, Sharmili, Lobia,

Soyabean, Moth,


11/19

Pulses AssortmentPulses Assortment

Item Select Value Loose Bins

Toor Gujarat Latur Latur/Sawa

Moong Desi Desi Desi/Import

Urad Desi Import Import

Chana Bold Medium Medium

Masoor Bold Medium medium

Kabuli 42-44 58-60 58-60

Chitra Import Import

G Peas USA Canada


12/19

Types ofPulses Volumes %

ToorDal 24

Chana Dal 23

Mung Dal 16

Urad Dal 10

Peanuts 5

OtherDal 22

Pack Size %

200 gm 5500 gm 44

1 kg 43

2 kgs 8

Pulses Sales MixPulses Sales Mix -- IndiaIndia


13/19

Weekly Buying BehaviorWeekly Buying Behavior

MondayMonday :: 11%11%

TuesdayTuesday :: 12%12%

WednesdayWednesday :: 11 %11 %

ThursdayThursday :: 11 %11 %

FridayFriday :: 16 %16 %

SaturdaySaturday :: 20 %20 %

SundaySunday :: 19 %19 %


14/19

SupplyChain & SourcingSupplyChain & Sourcing

Bulk OriginBulk Origin Bulk WarehouseBulk Warehouse Packing CentrePacking Centre

Material Flow

CityDistribution

Centre

Store 1

Store 2

Store 3

Store 4

Indent Flow


15/19

Buying ofDalsBuying ofDals

Small retailerStore::

Buying locallyBuying locally

Buying at High Price.Buying at High Price.

Lack economies of ScaleLack economies of Scale

Bigger Retail chains:

Buy from origins.Buy from origins. Better quality and quality Consistency.Better quality and quality Consistency.

Definite demand, makes buying Easy.Definite demand, makes buying Easy.

Better bargaining Power.Better bargaining Power.

Can work in Positions if market is bullish.Can work in Positions if market is bullish.

If market drops:If market drops: loss of profit/ Averaging of Bulk Price.loss of profit/ Averaging of Bulk Price.


16/19

Pricing PolicyPricing Policy


17/19


18/19

Problems / ChallengesProblems / Challenges

Getting low income groups to shop at ourStores i.edrivers, maid, labourer

Highcost ofReal estate.

Lack ofadequate infrastructure, poorroads,Cold c

hain,

Lack ofavailabilityofskilled manpower.

Unavailabilityofuniform qualityraw material roundthe year.

Govt Regulations, PFA, Package Commodity Act,Weights & Measures, Factory Act. etc.

Price war among Retailers


19/19

Thank YouThank You

Documents

Modern Retail 08.08