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The last decade has experienced a fundamental change in the Indian retailing industry structure, with a very perceptible shift

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SUCCESS OF PANTALOONS RETAIL INDIA LIMITED INDIAN WAL-MART

Submitted to:

SUBMITTED BYJagjot singh

Enrollment no. ABSTRACT

The thesis is focused on finding out the concept of value retailing followed by the Pantaloons Retail India Limited in India and to do an empirical study and analysis on one of its business lines The Food Bazaar. The aim was also to find out that how the concept of private labeling has proved to be beneficial for the growth of the organization. The research was conducted to find out the ways and methods that the company has been following in the business of organized retailing including the hypermarket concept. The research was conducted in NCR region (Noida & Gurgaon) with the sample size of around 300 customers and primary information was collected from them in the form of questionnaire. Also the financial statements of past four years were analyzed to find out the financial performance of the company. After doing the brief analysis about each of the verticals of the Pantaloons Retail India Limited, an in-depth research was conducted on its food bazaar business line in order to find out that from where the modern consumer prefers to shop from and what ratio of his income is he willing to spend on various food items. The objective was to figure out that what are the various parameters that a shopper takes into account before he buys a particular item and how comfortable is he when he is buying from malls rather than the from the local kirana shops. The study was also done on consumers perception on the concept of brand + bargain and the analysis about the same has been mentioned at the end. Thesis Synopsis

1) Title of the proposed thesis: success of Pantaloons retail India limited-the Indian wal-mart.2) Objective of the thesis:

To understand the concept of value retailing followed by pantaloons retail India limited in India.

To understand the concept of lifestyle retailing by the company.

To understand the management of the company, its expansion plans, growth strategies, challenges and competitive strength and a complete analysis of its business model.

To understand the concept of hypermarket and power of private labels by the company.

To do the empirical study on food bazaars3) Research design :

Research Descriptive

Data source Primary Data

Research Approach Survey Method

Research Instrument Questionnaire

Questionnaire type Structured non-disguised

Type of questions Both Close-ended & Open-ended

Sampling Unit Individual

Sampling Frame NCR

Sampling Procedure Simple Random sampling to select 5 stores and convenience for select customer/shoppers.

Sample size 300 customers approx

4) Scope of the thesis :the scope of the thesis is as follows:-

Complete information about Indian retail industry

The company background- pantaloon retail India

In-depth analysis about Brand + Bargain shopping

Empirical study on food bazaar o consumer perception research methodologies

Analysis

Suggestions and recommendations

conclusion

ACKNOWLEDGEMENTS

I would like to extend my heartfelt gratitude to all those who have contributed towards the successful completion of my thesis. Foremost among them is Mr. Bharat Khera for his helpful and generously extended support and by sparing his valuable time to guide and suggest us towards completion of this project.

I do owe a deep sense of gratitude to all the members of Pantaloons Retail India and all those who stood with me and for their continuous support and co-operation during the thesis. They too have contributed in no mean amount towards the success of my endeavors. I also thank the Director and the faculty of my institute for giving me an opportunity to do the thesis. Table of Contents

Page No.

Abstract

Synopsis

Acknowledgements

1. Indian Retail Industry1

1.1 Some Key Facts2 1.2 International retailers 2

1.3 Retail Omnibus 32. Company background 5

2.1 Major Milestones6

2.2 Management of the Company 10 2.3 Expansion Plans 10 2.4 Challenges 103. Pantaloon Competitive Strengths 124. Pantaloon strategy155. Characteristics of Select Retail Formats166. Business Analysis of Pantaloon Model19

7. Major verticals23

7.1 Pantaloons23

7.2 Big Bazaar 24

7.3 Food Bazaar 26

7.4 Fashion Station 278. Brand factory 28

8.1GINI & JONY FREE WORLD 29

8.2 BLUE SKY 299. Data Analysis 30

9.1 Big Bazaar Revenue Mix30

9.2 Pantaloon Revenue Mix30 9.3 Value Revenue Mix31 9.4 Lifestyle Revenue Mix 31

9.5 Revenue Mix 32

9.6 Retail Space Mix 32

9.7 Performance of various formats on 31.12.2006 33

9.8 Pillars Going Forward For 2010 3310. Bottlenecks and Challenges with Indian Retailers34

11. Performance of Pantaloon Retail36

11.1 Point of sale 36

11.2 Sourcing of merchandise 36

11.3 Selling of Merchandise 36

11.4 Higher Inventory turns 3612. Key risks 3713. The power of private labels by Pantaloons3914. Detailed Financials 41

14.1 Income Statement 41

14.2 Balance Sheet 4215. TABLES 44

15.1 Table No.1 44

15.2 Table No.2 46

15.3Table No.3 4616. Empirical Studies on Food Bazar48

16.1 Research methodology4817. Analysis 50

17.1Choice of retail store for grocery shopping 50

17.2 Expenditure on various food items 5018. List of references5119. Appendice 52

19.1Questionnaire52SUCCESS OF PANTALOONS RETAIL INDIA LIMITED INDIAN WAL-MART

1. Indian Retail Industry: Strategies, Trends and Opportunities 2007Retail is Indias largest industry, accounting for over 10 per cent of the countrys GDP and around eight per cent of the employment. Retail industry in India is at the crossroads. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. But because of the heavy initial investments required, break even is difficult to achieve and many of these players have not tasted success so far. However, the future is promising; the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations. Retailing in India is gradually inching its way toward becoming the next boom industry. The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centers, multi-storeyed malls and huge complexes offer shopping, entertainment and food all under one roof. The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the Indian population is going to take a higher growth trajectory. The Indian population is witnessing a significant change in its demographics. A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing workingwomen population and emerging opportunities in the services sector are going to be the key growth drivers of the organized retail sector in India.1.1 Some Key Facts- Retail is Indias largest industry, accounting for over 10 per cent of the countrys GDP and around eight per cent of the employment.

- The market size of Indian retail industry is about US $312 billion

- Organized retailing comprises only 4.5 per cent of the total retailing market and is estimated at around US$ 8.7 billion

- The organized retail sector is expected to grow to US $ 70 billion by 2010

1.2 International retailers

India's vast middle class with its expanding purchasing power and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets.

The Australian government's National Food Industry Strategy and Astride initiated a test marketing food retail in India wherein 12 major Australian food producers have tied up with India-based distributor AB Mauri to sell their products directly at retail outlets.

US-based home delivery and logistics company, Specialized Transportation Inc, will enter the Indian market through a strategic alliance with Patel Retail, a subsidiary of Patel Integrated Logistics.

Wal-Mart has announced its plans for India in partnership with Bharti,

US coffee chain Starbucks is well on its way to set up its first store in India this year.

US based Tommy Hilfiger has tied up with Creative Portico, a Mumbai based home textiles company, to sell its home textiles and furnishings in India.

Alfred Dunhill, a UK-based luxury mens brand, has tied up with Brand house Retail Ltd. for its India venture and will be opening four stores in the country.

The worlds largest furniture retailer, Ikea, has established an office in Gurgaon for market research and is holding talks with domestic companies to open stores in India.

Some of the international players that have already entered India include McDonald's, Pizza Hut, Dominos, Levis, Lee, Nike, Adidas, TGIF, Benetton, Swarovski, Sony, Sharp, Kodak, and Medicine Shoppe among others.

1.3 Retail Omnibus: Four Reports on the Retail Scene in India

The Omnibus edition of Pantaloon retail papers spans this very happening sector, which not only brings so much joy to the inveterate shoppers in terms of retail therapy, but also employment and livelihood to tens of thousands of Indians.Indias GDP growth rate is a healthy 9% for 2005-06 and this has had its ripple effect on all industries more so the Retail sector, of which only 3% organized until now.

The Indian retail industry accounts for 10% of GDP and 8% of employment.

India is being touted as the next big retail destination with an average three year compounded annual growth rate of 46.64%.

The Indian economy is poised to take the third position in the world in terms of Purchasing Power Parity by the year 2010.

The Indian Retail Market is a Rs. 1,200,000 million market as per the Images India Retail Report 2007.

Organized Retail market is zooming ahead with an annual growth rate of 30%.

The Retail sector is vibrant with growth happening in all related areas be they malls, hypermarkets or single brand luxury stores, they have dotted the commercial landscape of the metros, and have even percolated to the Tier II and Tier III cities.

Malls are fast becoming sought-after entertainment hotspots. From a situation where there were no malls about a decade ago, the country will have over 300 malls translating to over 100 million sq.ft. in available mall space by the end of 2007.

Food and Grocery retail holds the most potential, as almost 99% of it is unorganized. A number of big players are entering the field of organized food retail like Reliance, Aditya Birla Group and the Bharti Group, which has tied up with the worlds largest retailer Wal-Mart. All these major players are expected to show an annual growth rate of 25 30%.

The Retail boom has also led to the opening of a large number of single brand outlets across the country. With big brands and bigger outlets across all segments, from Apparel and Footwear, Watches, Books and Stationary to Jewelry and Consumer Durables, the sweep is indeed broad.

The Retail Sector is definitely witnessing a growth phase and everyone wants to make their presence felt in order to take their share of this huge pie. Take a gourmet trip dig in to sample the depth and breadth of this amazing sector.

Types of Retail verticals operating in India

Food and Beverage

Health and Beauty

Clothing and Footwear

Home Furniture and Household Goods

Consumer Durable Goods

Leisure and Personal Goods

2. Company Background Pantaloon Retail IndiaFounded in 1987, by Mr. Kishore Biyani, Pantaloon Retail in Indias leading Retail Company. It is the flagship company of the future group. Starting its 1st outlet in 1997, Pantaloons in Kolkata, it currently has over 4 mm sq. ft. of area under business. The company operates under multiple formats hypermarket, apparel stores, specialty stores under various brands including Big Bazaar, Pantaloon, Food Bazaar, Collection, E Zone, etc. The company also operates an online portal, futurebazaar.com.Pantaloon Retail (India) Limited is today recognized as one of the pioneers in the business of organized retailing in the country with a turnover of over Rs.2,884.43 millions for fiscal 2006, as opposed to a turnover of Rs.1,463.12 million for fiscal 2005 and Rs.881.04 million for fiscal 2004. During the same period Pantaloon profit after tax was Rs.124.75 million, Rs.30.20 million and Rs.3.82 million, respectively. As a result, Pantaloon sales increased between fiscal 2004 and fiscal 2006 at a CAGR of 80.94% and Pantaloon profit after tax increased between fiscal 2004 and fiscal 2006 at a CAGR of 471.44%.

Pantaloon Retail is one of the leading retail houses in India. As of November 15, 2006, Group/Company operated 46 retail stores, including three stores which are operated by Pantaloon franchises. These 46 stores are spread over about 1,113,000 square feet and are located in 17 states across India. In efforts to strengthen Pantaloon supply chain, Group/Company has set up seven regional distribution centers and an apparel manufacturing plant.

The company is headquartered in Mumbai with zonal offices at Kolkata, Bangalore, and Gurgaon (Delhi). It has 4 kinds of stores; Pantaloon stores, Central Malls, ALL Stores, Fashion Stations and Mela Store. In the Value segment, Group/Company cater to the masses through Pantaloon Big Bazaar, Food Bazaar outlets and Gold Bazaar Stores with over 6.5 lakh sq. ft. retail space across Kolkata, Mumbai, Thane, Pune, Hyderabad, Bangalore, Nagpur, Ahmedabad, Kanpur, Chennai and Gurgaon (Delhi).

Subsequently, with evolution of retail industry in India and change in consumer aspirations, Group/Company diversified Pantaloon portfolio of offerings to include other retail goods. Currently, Group/Company sell readymade apparels and a wide range of household merchandise and other consumer goods such as footwear, toys, watches, toiletries, grocery items, sports items, crockery, gift and novelties.

It began its retailing operations in India way back in 1987. Currently, it manufactures and sells ready-made garments through its own retail outlets and two discounting stores.

Group follows the concept of value retail in India. In other words, Pantaloon business approach is to sell quality goods at reasonable prices by either manufacturing ourselves or directly procuring from manufacturers (primarily from small and medium size vendors and manufacturer). Group/Company endeavor to facilitate one-stop-shop convenience for Pantaloon customers and to cater to the needs of the entire family. Group/Company believes this concept as helped us grow to Pantaloon current size within a short time frame of four years. 2.1 Major Milestones

1987: Company incorporated as Manz Wear Private Limited. Launch of Pantaloons trouser, Indias first formal trouser brand.

1991: Launch of BARE, the Indian jeans brand.

1992: Initial public offer (IPO) was made in the month of May.

1994: The Pantaloon Shoppe exclusive menswear store in franchisee format launched across the nation. The company starts the distribution of branded garments through multi-brand retail outlets across the nation.

1995: John Miller Formal shirt brand launched.

1997: Pantaloons Indias family store launched in Kolkata.

2001: Big Bazaar, Is se sasta aur accha kahi nahin - Indias first hypermarket chain launched.

2002: Food Bazaar, the supermarket chain is launched.

2004: Central Shop, Eat, Celebrate In The Heart Of Our City - Indias first seamless mall is launched in Bangalore.

2005: Fashion Station - the popular fashion chain is launched

ALL a little larger - exclusive stores for plus-size individuals is launched

2006: Future Capital Holdings, the companys financial arm launches real estate funds Kshitij and Horizon and private equity fund Indivision. Plans forays into insurance and consumer credit.

In order to reduce costs and take advantage of economies of scale Company have embarked on backward integration of Pantaloon products.

The company plans to diversify into the business of discounting in a big way, which is targeted at the growing middle class segment. It has Indias second largest retail chain with 46 retail outlets and two discounting stores branded as Big Bazaars across the country at an estimated retail space of 4,01,300 sq. ft. The company plans to double its retail space in the next couple of years.

Pantaloon has come up with an excellent revenue model, focusing on value for money segment. Pantaloon plans to target the upper middle and the middle class segment, which forms the large chunk of Indian population. This segment is very price conscious and always looks out for value for money. Pantaloon has already opened two discount stores at Hyderabad and Calcutta. It also plans to sell household items through its discount stores along with apparels. Since the company has got strong brands like John Miller and Pantaloon, coupling it with the discount store model would boost the sales to the larger population.

Pantaloon successfully launched its discount store chain (branded as Big Bazaar), which targets the large and growing upper-middle and middle class of Indian society. This is totally in contrast to the other organized retail players, which focus on high net-worth of individuals. Pantaloon has the second largest selling space amongst the retailers. Big Bazaar offers products and services such as a chemist, a photography shop, a bakery, financial products, automobile accessories, bicycles, and electrical hardware among other items the range is vast and fulfils practically every need of the consumer under one roof. This is backed by complete automation of the retail outlets. After completion of the central hub at Mumbai the companys operations would be fully integrated which would give its operating efficiency a boost?Big Bazaar has strong own brand names in its portfolio across product categories. The brands include Pantaloon, John Miller, and Bare. Higher percentage of own brand sales improves margins, thus reducing the break-even level of sales. Big Bazaar has diversified from apparels to household items in its discount stores. This has enabled them to enlarge their basket of offerings.

Pantaloon Retail is one of Indias major retailers with presence in following two segments:

Lifestyle Retailing Pantaloons, Central, Fashion Station, aLL, MeLa

Value Retailing Big Bazaar, Food Bazaar.

Pantaloon Retail operations can be summarized in this following diagram

2.2 Management of the CompanyPantaloon Retail over a period of time has built a strong management team to drive the company for its high growth phase. Though, Mr. Kishore Biyani is the face of Pantaloon, the company is not a one man show and has built a strong second and third line of management, to fulfill its massive expansion and growth plans. Though there have been concerns regarding lack of talent in the growing retail sector, the company has the best talent in place to drive each business category.

2.3 Expansion Plans

The concept of discount store resembles the Wal-Mart strategy. In India and especially in metro cities like Mumbai, Bangalore, Calcutta and Hyderabad, where the population is dense and consists of a high middle-class population, the concept of discount stores is graining a lot of acceptance. The company plans to expand rapidly. The next year it plans to open more stores in Mumbai and Delhi at critical locations.

It has planned to open three Big Bazaars (discount stores) in A-class cities like Bangalore. Pantaloon has already bagged substantial retail space in Hyderabad (60,000 sq. ft.), Kolkata (35,000 sq. ft.) and Bangalore (40,000 sq. ft.). In Mumbai it acquired 50,000 sq. ft. area at each of its locations at Lower Parel, Mulund and the western suburbs.

2.4 Challenges The key challenges facing the company are as follows:

Fund raising The Company acknowledges that expansion plans of the company cannot be met from internal resources. This means that the company has to tap external sources to fund expansion. The company has recently allotted shares to promoters at SEBI formula price. It plans to borrow heavily to fund its expansion plans. As a consequence of increased interest payment and depreciation expense, the net profit margins would remain flat.

Competition Although there are a few stores operating in this segment such as Giant in Hyderabad, it is mostly international chains such as Wal-Mart and Carrefour that are the better known names as discount stores worldwide. Meanwhile, the general retailers in Mumbai are not too pleased about the concept of discount stores. Group/Company cant figure out from where such stores get their margins. It must have a feasible revenue model to sustain the venture.

The company is facing limited competition from the organized retailers but strong competition exists from the downtown centers unorganized.

3. Pantaloon Competitive Strengths

It is believed that the following are Pantaloon principal competitive strengths which have contributed to Pantaloon current position in the retail sector in India:

1. Strong understanding of the value retail segment: Pantaloon business plan involves implementation of the concept of the value retailing, targeting the middle and lower middle income groups, which constitute majority of the population in India. Group/Company intends to provide quality products at competitive prices. Group/Company sells a vast range of merchandise across apparels and accessories, FMCG products, food products and consumer durables with over 63,000 SKUs. Pantaloon emphasis has been to maximize the value that the customers derive in spending on goods bought in Pantaloon stores. Group/Company endeavor to continuously reduce Pantaloon costs through a variety of measures, such as, in-house production of apparels, procurement of goods directly from the small and medium size vendors and manufacturers, efficient logistics and distribution systems along with customized product mix at Pantaloon stores depending on the regional customer behavior and preferences. Central to Pantaloon value retail strategy is to pass on the benefits of cot reduction measures to Pantaloon customers.2. Strong and efficient supply chain management: Pantaloon supply chain management involves planning, merchandizing sourcing, standardization, vendor management, production, logistics, quality control, pilferage control replacement and replenishment. Pantaloon supply chain management provides us flexibility to adapt to changing patterns in consumer behavior and Pantaloon ability to add value at various steps/levels. In particular, Pantaloon supply chain management gains strength from Pantaloon ability to undertake in-house manufacture, design and development of apparels.3. Strong and efficient logistics and distribution network: Pantaloon distribution and logistics network comprises seven distribution centers. Besides, Group/Company have Pantaloon own fleet of 31 trucks, which helps us to transport and deliver Pantaloon products in a cost and time efficient manner. Group/Company believe that Pantaloon distribution and logistics set up is well networked and allows us to fulfill the store requisition within short time period of generation and receipt of order, which has helped us to optimize in-store availability of merchandise and minimize transportation costs. Pantaloon strong distribution and logistics network has enabled us to dispense with the requirement of a dedicated storage space at every store, which is an industry practice, and instead undertake periodical replenishment of depleted stock. Due to adoption of an efficient racking system, Group/Company are able to benefit from optimum utilization of the space allocated for display in Pantaloon stores. This provides us assistance in maintaining a low working capital requirement and less carrying cost.4. Group/Company is in a position to leverage Pantaloon geographical spread: Pantaloon stores and distribution centers are spread in various parts and regions of the country. This has not only enabled us to build Pantaloon brand value but also facilitated us to explore cost-effective sourcing from different locations, identify potential markets and efficiently establish new stores in different locations. An aggregate of 40 of 46 of Pantaloon existing stores are located in Tier II and Tier III cities, which, Group/Company believe, enables us to capture market share in locations where a majority of Pantaloon target customers are located.5. Group/Company possess the ability to identify new locations to promote Pantaloon business plans: Group/Company believe that Group/Company possess the ability to identify locations with potential for growth, in particular in Tier II and Tier III cities. Group/Company have an exclusive site identification and assessment team, which undertakes systematic analysis of the business prospects, taking into account factors such as population, literacy levels, nature of occupation, income levels, accessibility, basic infrastructure and establishment and running costs. Further Group/Company have a dedicated warehouse for the purposes of storing the materials essential for setting up of new stores.6. Group/Company derive substantial revenues from Pantaloon private labels: Group/Company have a number of private labels for apparels (i.e. apparels manufactured by us) such as Zeppin, Paranoia, Chlorine, Kittaan Studio, Famenne, Fleurier Women and Roseau. In fiscal 2006, Pantaloon income from Pantaloon private labels was Rs.483.50 million, which accounts for 16.76% of Pantaloon total sales for fiscal 2006. Group/Company believe that Pantaloon focus on Pantaloon private labels and their recognition in Pantaloon customer segment enables us to differentiate ourselves from Pantaloon competitors.7. Group/Company effectively use information technology systems: Group/Company believe that efficient information technology systems, processes and business applications are essential to handle retail chain of Pantaloon magnitude. Pantaloon office processes are computerized which support procurement, supply chain logistics, distribution centers management and store operations including inventory management and billing. Group/Company is in the process of implementing SAP. All Pantaloon stores and distribution centers are connected through a company-wide virtual network connection which helps to efficiently manage Pantaloon network of outlets throughout the country.8. Group/Company have a highly experienced and competent management team: Group/Company have an experienced management team which is complemented by a committed workforce. Pantaloon management team comprises of talented professionals who are highly experience in the retail sector. This has assisted us in effective management of Pantaloon stores. Group/Company believe Group/Company have created the right balance of performance bonuses and other incentives for Pantaloon employees.4. Pantaloon strategy:

Group/Company intends to pursue the following strategies in order to consolidate Pantaloon position as one of the leading operators in the value retail segment in India. Pantaloon growth strategy is based on:

1 Increasing Pantaloon penetration in the country by leveraging Pantaloon supply chain, distribution and logistics network.

2 Emphasis on backward integration.

3 Expansion of FMCG.

4 Procurement from low-cost production centers outside India.

5 Increasing customer satisfaction and Pantaloon base of loyal customers.

6 Continue to upgrade information technology systems and processes.

7 Continue to train employees and seek entrepreneurship from employees.

5. Characteristics of Select Retail Formats

FormatDescriptionSize (Sq. ft.)

(India)Examples

Category Specialist KillerOffer a narrow variety with a very deep assortment of the merchandise. Merchandise may be sold at price lower than that.50,000+15,000+Circuit City, RUs, Home Depot, Nallis Kumaran (Chennai), Toykemp (Bangalore), The Loft (Mumbai, Vijay Sales (Mumbai)

ConvenienceUsually located near residential areas & open long hours. Offers an assorted mix of products including milk, break and eggs.3,00-8,000500-1,0007-Eleven, Speed mart, In & Out

Department StoreLarge store selling several product lines, with each operating as a department. Product mix is largely non-food, like apparel, accessories, books, music, footwear etc. level of service is very high.75,000+500,1-000Marks & Spencer, Harrods, Selfridges, Macys Bloomingdales, Shoppers Stop, Pantaloons, Globus, Ebony

Factory OutletsStores which sell branded merchandise at discount. Levels of service are low, typically, these are franchise outlets located away from the main markets.5,000-10,0005,000-1,000Levis Factory Outlet, Reebok Factory Outlet, Wrangler Factory Outlet.

HypermarketLarge self service stores selling a mix of products, these stores offer large depth in the product mix which includes Food non-food items like apparel, CDs, DVDs footwear, etc. The low price for the products is a key attraction for the customer.80,000-220,00040,000-75,000Wal-Mart, Big Bazaar, Giant, Sabka Bazaar

Single Price StoresOffer an assorted mix of branded and unbranded merchandise, to appeal to the budget conscious customer.5,000-20,000500+Family Dollar, Dollar General, 9 to 9, 49 to 999

Specialty StoresFocus on brand or a particular category. They offer a narrow product line but good depth, level of service is high.5,000-8,0002,000-5,000Walgreens, Boots, Crossword, Planet M, Rhythm House, Music world

SupermarketThese stores offer food, laundry and household maintenance products. They are self service, low cost, low margin and high volume operators.8,000-20,000800-5,000Asada, Kroger, Tesco, Foodworld, Food land, Food Bazaar, Nilgiris.

6. Business Analysis of Pantaloon Model

As Group know &, India is not an integrated homogenous market like other western markets its a hierarchy of markets catering to people at many different income levels 7 tastes. Hence its very important to understand the customer and its needs. Pantaloon has been able to crack this by offering all what the consumers want at different price points. Pantaloon has created a well niche brand for itself. The company through constant roll out of different formats is trying to capture the maximum of consumers wallet. It has been able to target 75% of the consumer wallet.

Business Strategy

Strategy to touch all price points to diversify business & improve profitability.

Categories / Formats

Where the consumer spendsRetail formats where the consumer can spend.

Clothing, Tables & Fashion Big Bazaar Central Fashion Station Gini and Jony Pantaloon All Planet Retail

Jewelry, Watches & AccessoriesBlue Sky

FootwearFootwear Bazaar

Health & Beauty Care ServicesHealth Village Star and Sitara Tulsi

Health & Beauty Care ProductsTurmeric

Consumer DurablesElectronic Bazaar E-zone

Mobile HandsetsM Bazaar M port

Furniture & FixturesCollection I Furniture Bazaar Got it Home Town

Food & GroceryFood Bazaar

Catering Service (F&B)Brew Bar Caf Bollywood Chamasa Rain Sports Bar.

Books, Music & GiftsDepot

EntertainmentBowling Co-FIZ3

PANTALOON RETAIL No of Stores & Retail Space

Targeting higher consumer wallet share

7. MAJOR VERTICALS7.1 PantaloonsPantaloons lifestyle format of retailing is the apparel store of the company catering to the ever-changing fashion needs of the customers. Pantaloons cater to the Middle Income & Upper Middle Income consumers. Pantaloon has been the pioneer & only apparel retailer to offer several (7) fashion seasons of new & contemporary fashion. The company has roped in Bollywood stars to promote its apparel offerings.

Pantaloon currently is the largest apparel retailer in India. The format is rapidly expanding which itself would create entry barriers for competition. Its been a high margin business.

Competition in this format is expected to be limited because of the brand image that Pantaloon has created in the minds of the consumer. Pantaloon has also adopted a private label strategy, which allows it to differentiate in products & generate higher margins. Private labels constitute 75% of the apparel sales.

7.2 Big Bazaar

Shop till you drop! Big Bazaar has democratized shopping in India & is so much more than a hypermarket. There are over 170,000 products under 1 roof that caters to every need of a family, making Big Bazaar Indias favorite shopping destination.

Awards & Recognition

In the month of July 2006 Big Bazaar won the prestigious CNBC TV18 Awaaz Consumers Award 2006 in the retail category, as the most preferred, large, food & grocery store.

At Images Retail Awards it was adjudges the Best Value Retail Store & Best Retail Destination of year 2006

In Readers Digest Consumer Survey 2006, Bazaar won the prestigious Platinum Trusted Brand Award in the Indian services category

Fashion FocusBig Bazaar continues to be a fashion led delivery format, with fashion comprising about 40% of its revenues.

Big Bazaar Getting Bigger

New categories like consumer electronics, furniture, communication, food & beverages, pharmacies, beauty retail, saloons, books, stationery & music are being added to Big Bazaar.

Pioneering the Hypermarket Format

Its the hypermarket format in the value retail segment of the company; its aim is to capture the middle income value focused customer. Product offerings are mainly general merchandise and apparels. Apparels form 40% of the total revenue, 60% being general merchandise. The company has maintained 50% of apparel sales from private labels.

It is the fastest growing format in the organized retail space. Pantaloon has aggressive plans for this format of taking to total number of outlets to 225 by 2010. Currently its about 70 outlets.

Big Bazaar covers 3-25 mn sq. ft. currently, to increase to 9 mn sq. ft. by 2010. Average sales per sq. ft. at Rs.8500 can generate a sales of Rs.7650 cr, by 2010. Expected Gross Margin -24%. Expected EBIDTA 7-9%.

This format would face maximum competition going forward as all the major new entrants have plans to enter into the hypermarket segment.

The companys aggressive roll out plan for this format is to be able to achieve economies of scale in souring of products and protect the overall margins.

7.3 Food BazaarThe food and grocery retail format of the company is capturing the middle income value focused customer. FMCG along with dry and wet staples from the main product categories of this format. The format has been will accepted by the Indian women as it has been able to offer scheme and discounts on various products because of its economies of scale in operations. The company has been able to offer all the daily needs related to the food and grocery under one roof. Pantaloon retail plans to expand this format (to smaller towns and cities) more rapidly going forward to achieve further economies of scale.

The success of this format has prompted the company to take this format to smaller towns and cities. Though being a low margins business but higher turnover nature makes it a profitable proposition for Pantaloon. In order to maintain its competitive advantage in this format, the company needs to invest to improve the back end.

Central

The departmental format of the company, aims to cater the upper middle income consumers. Its been positioned as one stop destination for shopping and entertainment. Central has the same growth rate of 40%. In the Central Model the company sub leases its spaces to concessionaries, restaurant and food court managers which assure a fixed rental and a certain percentage of sales, with no inventory carrying on its books, this constitutes 70% of central sales.

Currently the company has 3 Central Stores (2006 end). Central model is highly scalable and would be successful in other cities where the company plans to open.

FASHION STATION

8. BRAND FACTORYPantaloons game plan with this new format is to raise the bar of customer expectations & experience when it comes to Brand + Bargain shopping. There is a huge market opportunity in this category where over 70% of the people shopping at Factory outlets are under the age group of 30 years who want fashion brands at reasonable price.

Pantaloon retail is trying to fill in one gap in the apparels, offered through Pantaloons (life style) & Big bazaar (value segment). The company plans to offer all the major national & international brands.

Pantaloon retail is trying to change the perception of the consumers that factory outlet shopping is not about seconds experience & it is not about buying cheap. Instead, its all about an amazing experience of Buying Smart.

GINI & JONY FREE WORLDTodays urban child is like a king in the family, as its importance is increasing & influencing in all the purchasing decisions of the family. As the urban child is getting more exposed to the western world through various media, the child today is becoming smarter & also has started having aspirations. Pantaloon retail wants to capture the growing aspirations amongst kids. Pantaloon is tapping this mega opportunity by having a Joint venture with Gini & Jony, one of the leading kids apparel brand.

The size of the kids apparel market is estimated at Rs. 130 bn. The CAGR growth in the branded apparel segment has been about 46% for the past 3 years.

8.2 BLUE SKY

9. DATA ANALYSIS9.1 Big Bazaar Revenue Mix

9.2 Pantaloon Revenue Mix

9.3 Value Revenue Mix

9.4 Lifestyle Revenue Mix

9.5 Revenue Mix

9.6 Retail Space Mix

9.7 Performance of various formats on 31.12.2006FormatsNo. of OutletsSpace (mn sq. ft)

200420052006200420052006

Value Retailing

Big Bazaar

Food Bazaar

Fashion Station

Total

Lifestyle

Pantaloons

Central

Total10

15

0

25

12

1

1319

30

1

50

12

3

1529

45

5

79

21

3

240.41

0.11

0

0.52

0.29

0.13

0.420.83

0.29

0.03

1.148

0.29

0.47

0.761.15

0.43

0.09

1.67

0.48

0.47

0.95

9.8 Pillars Going Forward For 2010FormatsNo. of OutletsSpace (mn sq. ft)

2007201020072010

Value

Big Bazaar

Food Bazaar

Fashion Station

Brand Factory

Total

Lifestyle

Pantaloons

Central

Home Town

E-Zone

Total75

110

15

3

203

42

9

5

20

76225

250

80

20

575

80

22

35

86

2233.3

1.2

0.15

0.25

4.9

1.1

1.35

0.6

0.2

3.259

2.5

1

1

13.5

2

3.5

2.7

0.86

9.06

10. Bottlenecks and Challenges with Indian RetailersFactorsDescriptionImplications

Structural Impediments

Lack of urbanization

Poor transportation infrastructure Lack of awareness of Indian consumers

Restricted retail growth

Growth of small, one-store formats with unmatchable cost structure

High Cost of Real Estate Pro tenant rent laws

Non-availability of government lands, zoning restrictions

Lack of clear ownership titles, high stamp duty Difficult to find good real estate in terms of location & size

High land cost owing to constrained supply

Disorganized nature of transactions.

Supply Chain Bottlenecks Several segments like food & apparel reserved for SSIs

Distribution, logistics constraints

Long intermediation chain Limited product range

Makes scaling up difficult

High cost & complexity of sourcing & planning

Lack of value addition & increase in costs by almost 15%

Customer Preferences Local consumption habits

Need for variety

Cultural issues Leads to product proliferation

Increased complexity in sourcing & planning

Increase the cost of store management

Availability of talent Lack of proper training

Highly educated class does not consider retailing a profession of choice Higher trail & error in managing retail operations

Increase in personnel cost.

Barriers to FDI FDI not permitted in pure retailing

Franchisee arrangement allowed Limited exposure to best practices

11. Performance of Pantaloon Retail (India A Brief note :)11.1 Point of sale - Real estate is the raw material of a successful retailing business. Having the right real estate in prime locations is the key for a retail chain, availability of right real estate would drive the sales, a proper catchments analysis of locations of outlets is needed to increase the footballs & conversions.

Pantaloon in this regard is a way ahead because it has locked into real estate at prime locations in all the major cities of India. The company is expected 30 million sq. feet of prime locations in all the major cities of India. The company is expected 30 million sq. feet of real space by 2011 covering 80 cities of India.

11.2 Sourcing of merchandise Sourcing of merchandise from the right vendor at the right price is an important factor, because efficiency in buying would ultimately increase te gross margins. Going with competition in major formats, it would be difficult to improve gross margins. But competition would not be amongst retailers alone but also amongst vendors to supply at the most competitive price. Any retailer with significant size will be able to improve its sourcing. Pantaloon with its projected scale is able to source its merchandise from its vendor at reasonable rates.

11.3 Selling of Merchandise Selling the right products to the right consumer is an important parameter of a retail chain. Pantaloon has been very successful in this parameter by building different formats catering to different customer needs. Pantaloon has created a bond with the Indian customer & clearly understand its needs & wants.

11.4 Higher Inventory turns In any retail chain selling merchandise should move quickly from the shelves. This could only be achieved by having lower inventory levels & higher assets turns. Pantaloons inventory has been on a rise mainly because of the store expansion & fashion constituting 40% of the total sales. Pantaloon assets turns are not so impressive but going forward it would improve.

12. KEY RISKSExecution of plans is the biggest risk

The company plans to become 10x its current size in terms of floor area by 2010. There are a lot of exogenous factors that could impact the companys plans. Delivery of stores are behind schedule by an average of 2 quarters for most companies. As these store deliveries get bunched up for most of the players towards 2009-2010. There could be further delay in store delivery. Besides, there are multiple clearances to be taken by local & other authorities, which can prove to be bottleneck.

Rising resource cost to put margin pressure

The employee cost & property costs will be 2 key pressure points for all retailers. Traditional human resource management methods have been unable to reduce employee turnover.

Likely equity dilution to finance growth

The company would need capital in the region of USD 600 mn. For its growth plan until FYO9E. The company would need external funds for its growth. 9% dilution has already happened Y TID FYO7E.

Strain on management bandwidth

PRIL is expanding into multiple formats & multiple geographics over the next few years. Besides, it is investing in various non-retailing businesses. The company could face management bandwidth shortage in a few years from now. Decision making is quite decentralized with powers devolved to line managers. However, as the company multiplies, they would need stranger MIS, internal auditing systems, & risk management to ensure good management of such large entity.

Untested formats like Home solutions & new non-retailing business.

PRIL plans to grow in the home solutions business over the next few years. The market for home improvement & furnishing is getting bigger due to the increasing number of residential as well as commercial buildings, & the organized market is almost non existent. The key reasons for the negligible presence of organized market are the lack of skilled professional service providers, non existence of contract based layout force & under investment. Significant amount of training & orientation would be required to convert the existing labour into professional skilled force.

There are risks associated in entering into business like insurance because the way financial products & services are bought in India, it will take a significant change in mindset to start buying from groceries store.

13. The power of private labels by PantaloonsWhen PepsiCos Frito-Lay decided of boycott Pantaloons Food Bazaar due to differences in terms of trade, it was the latters private label which got a boost in shares. Today Tasty Treat, the ready-to-eat private label of Food Bazaar, is leading with a 16 per cent share among the rest of the snack brands.

Today Pantaloon Retail has 80 products comprising 350 SKUs with five private labels. Since PepsiCos rejection, it has promptly approached local manufacturers such as Prakash Snacks in Indore and Pogo Chips in Kolkata to manufacture its snacks brands. Arvind Chaudhary, CEO (Foods Business), Pantaloon Retail, adds, The purpose of Pantaloon private labels is to grow the category and fill the gaps between demand and supply. Today Group/Company have upgraded Pantaloon suppliers with better quality systems and processes for the snacks category, where there was a gap.

The power of private labels is being explored by most retailers today, as they do not want to be at the mercy of the big manufacturers. At the same time they also realize that its not going to be easy as it takes time and money to build private labels. Observes K. Radhakrishnan, Chief Executive. Hypermarkets, Reliance Industries, While its Pantaloon strategic intent is to build private labels, it is more difficult and takes longer to build these brands. However, in categories such as commodities, it is easier to build private labels. At present, nearly 15 percent of Pantaloon hypermarket brands comprise private labels.

The private label product proposition: Quality and price, primarily, relative to branded alternatives

How strong supplier brands are in the minds of Indian Consumers: Many supplier brands are relatively new in India, so potentially have less awareness, and therefore, easier for private label products to supplant supplier brand products

How effectively suppliers innovate: Supplier innovation if often what allows them to stay ahead of retailer private label. Innovative suppliers can come out with new products that retailers havent necessarily thought of.

How consolidated Indian retail eventually becomes: The more market share a retailer has, the greater the opportunity to create the leverage a retailer can put on a supplier. This may be one reason why the UK has greater PL penetration than the US UK retail is more consolidated than US retail. Right now, India retail is highly fragmented, so theres a long way to go, as KSAs Maroo observes.

14. Detailed Financials

14.1 Income Statement

Particulars FY04FY05FY06FY07FY08E

Net sales6,58510,84018,67835,03363,200

Operating expenses(6,021)(9,991)(17,258)(32,297)(58,373)

Raw material consumed(4,368)(6,988)(12,455)(23,367)(42,091)

Freight(116)(251)(383)(841)(1,580)

Power & fuel(121)(220)(374)(701)(1,264)

Employee expenses(345)(659)(1,327)(2,420)(4,079)

Selling & Distribution expenses(322)(499)(697)(1,612)(2,971)

Administrative expenses(129)(217)(375)(666)(1,580)

Bad debt provision / w-offs(1)(1)0(1)(1)

Royalty0(1)000

Other operating expenses(620)(1,155)(1,667)(2,689)(4,806)

Operating profit5628491,4202,7364,827

EBITDA5628491,4202,7364,827

Depreciation (88)(133)(208)(327)(451)

Other income18504300

EBIT4927661,2542,4094,376

Interest paid(236)(282)(335)(751)(1,368)

Pre-tax profit (before non-recurring items)2564849191,6583,008

Pre-tax profit (after non-recurring items)2564849191,6583,008

Tax (current + deferred)(46)(145)(277)(580)(1,053)

Tax provided(15)(75)(128)(252)(421)

Deferred tax(31)(70)(149)(348)(632)

Net profit2113386431,0781,955

Adjusted net profit2113386431,0781,955

14.2 Balance Sheet

Particulars FY04FY05FY06FY07EFY08E

Current assets2,3004,0398,82316,53026,238

Cash & bank138215217245181

Debtors176123170196346

Inventory1,5762,7595,0709,98416,748

Loans & advances4109373,3556,1108,963

Other current assets051100

Non-current assets1,8012,6148,3607,4229,018

Investments333191,4061,9062,406

Fixed assets (Net block)1,7482,2953,9545,5166,612

Gross block1,8472,5113,6606,4107,910

Less: Depreciation(243)(374)(567)(894)(1,293)

Add: Capital WIP14415886100

Total assets4,1016,65314,18323,95335,256

Current liabilities7291,4552,6223,9006,126

Creditors5468951,8442,6714,460

Tax payable2796198199361

Dividends payable2935677070

Tax on dividend payable4891010

Other current liabilities1133754549501,225

Other provisions10255100

Non-current liabilities2,4272,9886,29211,77118,913

Total debt2,3662,8576,01311,14417,634

Deferred tax liabilities601302796271,259

Total liabilities3,1564,4368,91415,67125,038

Shareholders funds9452,2125,2698,28210,217

Paid up Capital191220269281281

Reserves and Surplus7581,9955,0008,0019,936

Share Premium3661,2513,7215,6915,691

Retained earnings3816651,1662,1974,132

Other reserves1079113113113

Less Misc expenditure(4)(3)000

Total equity & liabilities 4,1016,65314,18323,65335,256

15. TABLES

15.1 Table No.1 Different Format at Pantaloon Retail India

Product CategoryConceptsStatusFormat/Offerings

FoodBrew BarOperationalBeers, snacks and set meals

Caf BollywoodPlannedEateries

ChomosaOperationalSnack counter in high traffic area

Food BazaarOperationalSupermarket

RainOperationalFood and beverages

Sport BarOperationalFocused on sports lovers

FashionaLLOperationalFashion apparel for plus-size individual

Big BazaarOperationalHypermarket

Blue SkyOperationalFashion accessories

CentralOperationalSeamless malls

Fashion StationOperationalPopular fashion

Gini & JonyOperationalKids fashion

PantaloonsOperationalDepartment store

Home & ElectronicsCollection iOperationalHome furnishings

Electronics BazaarOperationalPresent within Big Bazaar

e-zoneOperationalConsumer Electronics

Furniture BazaarOperationalHome furniture

Got itPlannedOne stop shop for home maintenance

Home TownPlannedOne stop Destination

Telecom & ITGen MPlannedHi-tech products

M BazaarPlannedSolutions for knowledge, entertainment and communication

M PortPlannedStandalone stores/Shop-in-shop

General MerchandiseBig BazaarOperationalHypermarket

Blue SkyOperationalFashion Accessories

CentralOperationalSeamless malls

Footwear BazaarPlannedFootwear and accessories

NavarasaPlannedN.A.

PantaloonsOperationalDepartment store

Shoe FactoryOperationalFootwear and accessories

Leisure & EntertainmentBowling Co.OperationalPremium family entertainment center

F 123OperationalFor leisure and entertainment

Wellness & BeautyHealth VillagePlannedN.A.

Star SitaraOperationalBeauty salon for men and women

TulsiOperationalPharmacy

TurmericPlannedCut-in format at Food Bazaar

Books & MusicDepotOperationalBooks and music

e-tailingOnline retailingOperationalFuturebazaar.com

Source: Complied by the author from the company website

15.2 Table No.2Landmark Groups Presence Across Different Formats of Retail in India

Baby-shopShoe martSplashHome CenterLifestyleMaxFashion BrandsFuncityTotal

Currently9991092752

Additions Till Dec 200644444911242

Total till Dec 0613131314131118297

Source : Company Website

15.3 Table No.3Presence of Departmental Stores in various cities in India

LocationWestsidePantaloonLifestyleEbonyShoppers StopGlobusPyramidTotal

Ahmedabad12115

Amritsar11

Bangalore311229

Baroda112

Chandigarh11

Chennai112127

Delhi33111110

Faridabad11

Ghaziabad1124

Gurgaon11114

Hyderabad11114

Indore1113

Jaipur112

Jalandar11

Kanpur112

Kolkata2226

Lucknow11

Ludhiana11

Mangalore11

Mumbai44372121

Nagpur112

Noida112

Rajkot11

Pune11215

Thane11

Secunderabad1

Total2322971913498

16. Empirical studies on Food Bazaar by Pantaloon Retail India Limited on Consumer Perception

16.1 Research Methodology Research Descriptive

Data source Primary Data

Research Approach Survey Method

Research Instrument Questionnaire

Questionnaire type Structured non-disguised

Type of questions Both Close-ended & Open-ended

Sampling Unit Individual

Sampling Frame NCR

Sampling Procedure Simple Random sampling to select 5 stores and convenience for select customer/shoppers. Sample size 300 customers

Contact Method Personal

Mode of Collecting Data The respondents were chosen randomly and requested to grant interviews. The questions were then asked in predetermined sequence.

Data Processing (i) A number of tables was prepared to bring out the main characteristics of the collected data. (i) Inferences were drawn from the collected data.

18. LIST OF REFRENCES

1. Milestones, an ORG-MARG publication.

2. Philip Kotler, An Outlook for Retailing in India

3. www.economictimes.indiatimes.com 4. www.retailyatra.com5. Chain Store Age, Food Focus Grows Format Exponentially

6. www.pantaloon.com19. APPENDICIES19.1 Questionnaire1. Please rank the following parameters in the order of their importance (on a scale of 1-6, 1-bing most important and 6-least important)

ParameterRanking (1-6)

Personal Attention

Facility of home delivery

Facility of credit purchase

Ambience / Touch and feel

Long term discount/ free gift

Parking facility

2. Please tick the appropriate option based on your choice of retail store you buy your groceries from?

Neighborhood Kirana/General StoreBig BazaarOther retail Store/super bazaarPurchase amount (monthly)

a) Daily Supplies

b) Monthly Ration

3. Please tick the relevant option regarding milk purchase.

Loose milk (delivered at home)Packaged milkFrom dairy (freshly milked)Daily purchase (quantity)

4. Please tick the appropriate option (choose only one option for place of purchase)Place of purchase Frequency of Purchase

Kirana Store/sabzi MandiSuper Market/Big BazaarDaily Twice a week Once a weekOnce in 2 weekOnce a month or moreRupees spend per month

Food Items

a) Staple-Rice, Pulses, Sugar

b) Vegetable, Fruit, & Fresh juices

c) Edibles oils, Spices & Pickles

d) Bread related & biscuits

e) Snacks-cornflakes Chips Maggie Kurkure etc

f) Beverages-packed juices & soft drinks

g) Meat & eggs

h) Dairy products-butter, ghee, chocolates

Personal Care

a) Cosmetics, deodorant, beauty soaps, face wash, shampoo & oil

b) Toiletries-tooth paste & brush shaving products

c) Sanitary napkin, baby product

HOME ESSENTIALS

a) Washing Soap & detergent

b) Mosquito repellent, broom, toilet cleaner

5. In the previous question, the categories for which you have selected daily, twice a week or once a week; select the specific item (tick the option, multiple options allowed)

a) Staples-Rice pulses, sugarRice SugarWheat/flourPulses

b) Vegetables, FruitsPotato, Tomato, onionSeasonal vegetablesFresh juiceFruits

c) Edibles oils, spices, pickles SpicesMustard oilSunflower oil

d) Bread related & biscuitsBreadBakery product (bun, pizza base)Branded biscuitsUnbranded biscuits

e) Snacks-cornflakes, chips, Maggie Kurkure etc.MaggiePacked Snacks (chips, kurkure)Breakfast items

Beverages- packed juices & soft drinksPacked juiceSoft drinksMineral water

Meat & eggsEggsChickenMuttonFish

Dairy Products-butter, ghee, chocolatesButterGheeChocolates

6. How satisfied are you with your preferred store on the following parameters (please tick the appropriate option)

FactorsStrongly disagreeDisagree NeutralAgree Strongly agree

a) Packed Milk is of better quality than loose milk

b) Store of some big company is expensive

c) Packed flour, pulses, etc. have better quality than the unbranded product available at local kirana store

d) Vegetables, Fruits would be cheaper in sabzi market as compared to an air conditioned shop

e) Vegetables, Fruits are fresher in sabzi market as compared to an air conditioned shop

f) Will not purchase from a store, which sells fresh meat.

g) I will prefer to purchase vegetables from an air-condition shop as compare to sabzi market

h) I will purchase from a new store which provides cheaper goods even if I dont know the store owner personally.

Personal Details:

Family size:

123456& above

Occupation (earning member)

i. Working Professional

ii. Self-employed

iii. Housewife

iv. Student

v. Senior Citizen

Monthly Expenditure:

i. Less than 5000

ii. 5000-10,000

iii. 10,000-15,000

iv. 15,000-20,000

v. 20,000 and above

Name:

..

Address:

a) House no..

b) Sector / sub area / Locality..

c) Colony / Mohalla..

d) City..

Contact no. with STD code:

.

Optional:

Name of family memberDate of birthMarriage anniversary

Thank You

To be filled by the interviewer

Remarks:

Name of the interviewer .Signature.

Targeting the market segment & the product

Final point of sale through different formats

Understanding the market requirements

Arranging the sourcing and the logistics

50 Stores by 2007 end, & 125 by 2010

0.04 mn sq.ft. currently & 0.10 mn sq.ft. by 2010

Average sales per sq.ft. at Rs. 10,000

Can generage a sales of Rs. 100 cr. By 2010

Expected gross margin 32%

Expected EBIDTA 12%

15 stores by 2007 end & 80 by 2010

0.15 mm sq.ft. by 2007 end & 1 mn sq.ft. by 2010

Average sales per sq.ft. at Rs. 8000

Can generate a sales of Rs. 770 cr. By 2010

Expected gross margin 41%

Expected EBIDTA 12%

83 stores by 2007 end & 180 by 2010

Average sales per sq.ft. at Rs. 6,700

Can generate a sales of Rs. 120 cr. By 2010

Expected gross margin 53%

Expected EBIDTA 9%

3 stores by 2007 & 20 by 2010

0.25 mn sq. ft. by 2007 & 1.0 mn sq. ft. by 2010

Average sales per sq. ft. at Rs. 13,000

Can generate a sales of Rs. 1300 cr. By 2010

Expected cross margin 28%

Expected EBIDTA 8%

Pantaloon Retail (India) Ltd.

Entertainment, Leisure and sports

Value Retailing

Lifestyle Retailing

Fashion Station

MeLa

aLL

Pantaloons

Central

Food Bazaar

Big Bazaar

EMBED MSGraph.Chart.8 \s

To add 27mn sq. ft. of retail space by 2011

9 Stores by 2007 end and 22 by 2010.

1.35 mn sq. ft. by 2007 end and 3.5 mn sq. ft. by 2010

Average sales per sq. ft. at Rs.7500

Can generate a sales of Rs.2300 cr. by 2010

Expected Gross Margin 28%.

Expected EBIDTA 12-15%

110 stores by 2007 end, and 250 by 2010 1.2 mn sq. ft. by 2007 end, and 2.50 mn sq.ft. by 2010. Average sales per sq. ft. at Rs.14,000. Can generate a sales of Rs.3250 cr. By 2010. Expected gross margin 15%.

42 stores by 2007 end & 80 by 2010 1.1mn sq. ft. by 2007 end & 2.0mn sq. ft by 2010 Average Sales per sq. ft. of Rs 7,500 can generate sales of Rs 1,500 crore by 2010

Expected Gross margin 45%

Expected EBIDTA 14-16%

17. Analysis

17.1Choice of retail store for grocery shopping

EMBED MSGraph.Chart.8 \s

17.2 Expenditure on various food items

EMBED MSGraph.Chart.8 \s

ANALYSIS

PAGE vii

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