All across India, companies in the business of organized retail have tweaked their strategies, some for the second and even the third time, as well as consolidated their operations. This trend can be seen in nearly all retail companies, in terms of changes in their management teams and their business models. The main reason for this can be attributed to higher rentals, power bills, excise duties, etc. that increase operating costs and also the slowdown in the economy which reduces consumer spending.
A formula that was popular in 2008-09, is slowly emerging as the success mantra for today as well. Fewer formats and stores, and smaller ones are the way to go for the retailers nowadays.
Take the case of Reliance Retail and the Aditya Birla Group, who plan to focus on hypermarkets, while Shoppers Stop plans to open more departmental stores and two hypermarkets in the coming year. Reliance Retail, which has 22 formats from hypermarkets to specialty stores, exited two formats in 2008-09—Reliance Kitchen, which sold modular kitchen furniture, and Reliance Wellness, a beauty and lifestyle chain. The retailer now plans to downsize its new hypermarket stores by 60% and new departmental stores by 15% as it looks to increase its profitability for every square foot of store space.
According to Boston Consulting Group (BCG), modern or organized retail accounted for USD 35 billion, or about 7-8% of the USD 470 billion Indian retail market in 2011.
Source: Livemint
A formula that was popular in 2008-09, is slowly emerging as the success mantra for today as well. Fewer formats and stores, and smaller ones are the way to go for the retailers nowadays.
Take the case of Reliance Retail and the Aditya Birla Group, who plan to focus on hypermarkets, while Shoppers Stop plans to open more departmental stores and two hypermarkets in the coming year. Reliance Retail, which has 22 formats from hypermarkets to specialty stores, exited two formats in 2008-09—Reliance Kitchen, which sold modular kitchen furniture, and Reliance Wellness, a beauty and lifestyle chain. The retailer now plans to downsize its new hypermarket stores by 60% and new departmental stores by 15% as it looks to increase its profitability for every square foot of store space.
According to Boston Consulting Group (BCG), modern or organized retail accounted for USD 35 billion, or about 7-8% of the USD 470 billion Indian retail market in 2011.
Source: Livemint
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