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Archive for September, 2008

Major Brands to invest Rs 50cr for 68 new stores

Posted by retailigence on September 30, 2008

Major Brands Pvt. Ltd plans to invest Rs 50cr by 2009 end. This will be primarily for retail expansion – adding 68 new stores. The Company currently has 32 stores located in Mumbai, Delhi, Bangaluru and Gurgaon. Licensed brands include Mango, Promod, Aldo, La Senza, Nine West, Charles and Keith, Bally, Okaidi, Aldo Accessories and Inglot. Twenty five new stores will come up by March next. New cities targeted include Ahmedabad, Hyderabad, Pune, Kolkata, Chandigarh and Ludhiana. Spaces in malls already booked include DLF Promenade Mall (Vasant Kunj, New Delhi), Kshitij Mall (Satellite Road, Ahmedabad), Venus Square (CG Road, Ahmedabad), GVK Mall (Hyderabad) and Jewel Square (Pune).

Source: News Vision

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Big Bazaar achieved new milestone

Posted by retailigence on September 30, 2008

Big Bazaar opened three more stores in a single day – i.e. 30th September 2008, these three stores opening shortly in Pune (Kalyani Nagar), Cuttack (Darga Bazaar) and Delhi (Rajouri Garden). With the addition of these stores Big Bazaar has become the fastest(in the globe) to roll out 101 stores, in Hyper Market format, in just 7 yrs.

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Accor, Sodexo eye modern retail for loyalty schemes

Posted by retailigence on September 30, 2008

Employee incentive and loyalty solutions providers such as Accor Services and Sodexo India are now targeting modern trade retailers with their programmes.

Accor Services recently bagged loyalty programmes for retailers such as Tommy Hilfiger and Wills Lifestyle, and is now moving on to big retailers such as Reliance Retail with its programmes. Mr Sandeep Banerjee, Managing Director & CEO, Accor Services, said: “We have already had high-level negotiations with Reliance Retail and now it depends on how it would like to build its loyalty programme and take it further.”

Reliance Retail currently offers its loyalty scheme under the name Reliance One and Accor Services is hoping to partner the retailer in the near future.

Currently, Accor Services provides its loyalty services through a separate company — Surf Gold — which it acquired in 2007. Mr N. Ramasubramani, Regional Director, Loyalty Marketing, Surf Gold, said: “We have got the mandate to create the loyalty programme for the entire ITC group of companies and not just Wills Lifestyle outlets”.

Accor’s competitor Sodexo India is also looking at partnering retailers with its loyalty programmes. Mr Ashish Talwar, CEO, Sodexo India, said: “While we already have our loyalty programmes, we intend coming up with a specific product to cater to the retail segment.

“The purpose is to partner both big and mid-sized retailers and help them expand their base of consumers.”

Sodexo India is planning to approach both established retailers who already have loyalty programmes in place such as Shoppers Stop, HyperCity and Lifestyle, as well as the relatively smaller retailers who have yet to launch their loyalty programmes.

“We will approach the big retailers to see what value we can add to their existing loyalty programmes.

“At the same time, there could be mid-sized retailers such as Metro Shoes, with whom we could work to create loyalty programmes,” said Mr Talwar.

With the purpose of devising loyalty programmes across group companies, Sodexo India, like Accor Services, is also planning to have a presence across big business houses.

As Talwar says, “We intend operating our loyalty card on a common platform for big companies, which would help them attract more customers across the group companies”.

Currently, most retailers either manage their own loyalty programmes or have direct marketing companies to support their programmes.

Source: Business Line

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Mega Mart brings US brand Cherokee to India

Posted by retailigence on September 30, 2008

Arvind Mills-owned value-retail chain Mega Mart has launched US family lifestyle brand Cherokee in India. The brand caters to casual wears for men, women and children, including toddlers and infants.Mr Suresh J., Chief Executive Officer – Brands and Retail, said the company will open six large format stores (40,000 to 50,000 sq ft) this year, going up to 30 by 2012. It also plans to ramp up value outlets (500 sq f) from 100 to 500, spread across 100 cities.

At present, Mega Mart operates two large format stores in Chennai and Pune and intends to open one in Bangalore next week. Cherokee will offer garments in the range of Rs 300 to Rs 1,000.

“We will be investing Rs 400 crore in the next two years and targeting sales turnover of Rs 2,000 crore by 2012,” said Mr Suresh.

The company recorded a sales turnover of Rs 140 crore in 2007 which is expected to touch Rs 300 crore this year, while for the next year it is expected to reach Rs 500 crore.

At present, the company plans to manufacturer Cherokee branded garments in Mumbai, Bangalore and Tirupur, but it is also exploring possibilities of importing a few women’s and kids’ wear from abroad. Cherokee will provide its expertise on design and product development to Arivnd Mills.

Agreeing that some of the retail textile businesses are under pressure, Mr Suresh said, a few players who had entered the business when the rentals were on the higher side are facing the heat, besides sales volume has taken a hit due to high inflation.

“We will not rush to open up new stores, but wait for the right property and right price. Rentals in metros have already started coming down and has corrected about 50 per cent to 60 per cent in the last eight months,” he added.

Mr Larry Sass, Executive Vice-President, Cherokee Group, said “We had studied the Indian market for the last four years, before zeroing in on Arvind Mills and hope the value for money Cherokee offers will be well received.”

Source: Business Line

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Café Coffee Day expanding into SAARC countries

Posted by retailigence on September 30, 2008

Café Coffee Day (CCD) is getting ready to expand its footprint in the South Asian Association for Regional Cooperation (SAARC) countries. Having forged joint ventures in countries such as Austria and Pakistan, the coffee conglomerate now intends having a first mover advantage in the neighbouring South Asian countries before other multinational chains enter these markets.Mr Alok Gupta, Director, Café Coffee Day, told Business Line, “While India would be the nerve centre for CCD, we are looking at taking the brand to the neighbouring countries with the purpose of having a first mover advantage in this region and would need a strong local partner in these markets.”

Staying away from franchise operation, CCD plans to have its company-owned outlets along with a local partner who knows the market. Using its existing two joint ventures as a learning platform, CCD is poised to enter new markets in this region and intends differentiating itself from the existing coffee retailing chains. Meanwhile, in the domestic market, CCD is getting ready to give a facelift to its food and beverage section by introducing a healthy and diet-oriented menu in the coming months. “We are a lifestyle brand and have to keep up with the lifestyle demands of our clients. In the next three months there would be healthier options in our F&B section,” Mr Gupta said.

With 663 stores, CCD is currently on an expansion spree opening between 25 and 30 stores every month. Targeting new geographies and consumers, the coffee chain has decided to create new formats to cater to the same. “We are trying to address new consumers, especially affluent adults, and also promote in-house consumption of our brand” said Mr Gupta.

Source: Business Line

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Retailers Increasingly Leapfrog Larger Cities and Enter Emerging Markets through Smaller Cities, According to Latest A.T. Kearney Study

Posted by retailigence on September 28, 2008

India, Russia and China Top Annual List of Most Attractive Emerging Markets for Retail Investment

CHICAGO (21 June 2007) – As larger cities in India, China and Russia reach retail saturation, some retailers are entering countries through smaller second- and third-tier cities where consumers are ready to embrace Western-style retail concepts and products thanks to the influence of television, movies and the Internet.

This is one of the findings of the sixth annual Global Retail Development Index™ (GRDI), a study of retail investment attractiveness among 30 emerging markets conducted by management consulting firm A.T. Kearney.

Published since 2001, the GRDI helps retailers prioritize their global development strategies by ranking emerging countries based on a set of 25 variables including economic and political risk, retail market attractiveness, retail saturation levels, and the difference between gross domestic product growth and retail growth.  The GRDI focuses on opportunities for mass merchant and food retailers, which are typically the bellwether for modern retailing concepts in a country.

India and Russia continue to occupy the top two spots of the GRDI in 2007, as  they have for the last three years.  China vaulted past Vietnam and Ukraine to place third in this year’s index, largely on the strength of continued growth in consumer spending and retailers moving into smaller markets.  Modern retail formats grew between 25 and 30 percent in India and 13 percent in both China and Russia in the last year.

Until recently, such rapid growth was confined to the largest cities in each country.  However, increased competition in those cities is quickly forcing domestic and global retailers to expand into smaller second- and third-tier cities to drive growth.  In China, foreign retailers such as Wal-Mart and Tesco, and Hong Kong-based retailers are branching into smaller mainland cities, such as Yuxi, Weifan, Nanchang and Wuhu.  In Russia, Carrefour recently announced it is entering the country via tier-two cities.  And in India, shopping center developer Prozone is focusing development on smaller cities in anticipation of growing demand for modern retailers. But all cities are not created equal.

“Retailers should not go into second-tier cities armed with a first-tier strategy,” said Mike Moriarty, a partner with A.T. Kearney and co-leader of the GRDI.  “Successfully entering a new country via smaller cities requires careful identification of cities with consumers who are ready to embrace modern retail formats.  Incomes are smaller and products need to be customized for different markets.  But with the right strategy, smaller cities can be attractive targets for retailers that missed the ‘window of opportunity’ in major cities and for established retailers looking for growth.”

While windows of opportunity for global retailers are closing in India, Russia and China, large cities in other countries among the GRDI’s top 20 still present tremendous growth potential.

Driven by strong retail expansion, GDP growth and consumers’ penchant for a Western lifestyle, the Middle East and North African countries made significant advances in this year’s GRDI. Saudi Arabia, Tunisia, Turkey, Egypt, Morocco, and the United Arab Emirates are all among the GRDI’s top 20 countries this year, giving the region more counties in the top 20 than either Asia or the Americas.

Central and Eastern Europe also placed six countries among the top 20 —  Russia, Ukraine, Latvia, Bulgaria, Slovenia and Croatia.  This region as a whole remains attractive, but
A.T. Kearney predicts the window of opportunity for large-scale supermarket and convenience stores will likely close within two years.  The opportunity for entry into Eastern Europe for retailers in categories such as do-it-yourself, consumer electronics and apparel retailers is potentially ripe as specific formats targeted at niche segments will be available.  Multi-level fashion malls and mixed-use centers, which are cropping up throughout Eastern Europe, are expected to be successful.

Asia’s attractiveness for retail expansion is not limited to just India and China.  Vietnam, Malaysia and Thailand also were among the top 20 countries in this year’s GRDI.  Latin American countries continued the rebound noted in the 2006 GRDI, with  Mexico jumping 10 spots on this year’s Index to place ninth, joining Chile and Brazil in the top 20.

“So much of successful global retail expansion is about timing,” said  Hana Ben-Shabat, A.T. Kearney partner and co-leader of the study.  “Identifying markets on the cusp of embracing modern retail concepts and building a prescence in them ahead of the competition remains key.”

“But retailers can also learn from the luxury goods sector, which has shown the patience to invest early in markets, well before consumers were ready,” Ben-Shabat said.  “Now luxury retailers are enjoying tremendous growth in emerging markets.  Mass-market retailers can build on this success by creating ‘luxury corners’ aimed at attracting consumers who are already familiar with the concept of luxury goods.  An example might be a high-end gourmet foods section in a hypermarket.”

A.T. Kearney also recommends retailers consider the effect of an available and well-educated labor supply in their expansion decisions.  This year that analysis points to Malaysia and Chile as alternate expansion choices because of their labor advantages.  Both countries received strong marks in the firm’s Retail Labor Index, a measurement of  the strength and skills of the country’s retail workforce in relation to its position on the GRDI.

“Finding a skilled labor force is just as important to global expansion as an underserved market and ready consumers,” Moriarty said.  “Rapid expansion in markets such as India, China and Russia has created significant risks of wage inflation, attrition and business disruption for retailers.”

Source :- A.T.Kearney

Contributed by :- Katyayani Mishra

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Organised retail to form 18% of overall retail pie: McKinsey

Posted by superstar23 on September 28, 2008

Bangalore, Sept. 25 This may be good news for leading global retail players waiting to enter the Indian retail bazaar scene: the organised segment of the retail industry is expected to grow from the current 5 per cent of the total market to about 14-18 per cent of the expected Rs 18-lakh crore market by 2015. But a report by leading management consulting firm McKinsey and Co cautions global players waiting to enter the great Indian retail bazaar that a ‘cut and paste’ format of their stores elsewhere would not work here.

“They need to have innovative formats based on where to participate in the retail value chain, which geographies to play in and what price points to offer. They also have to craft a customer-insight driven merchandise strategy and create an efficient retail operating platform,” suggests the report.

Indian shopper

McKinsey’s retail report also talks about the uniqueness of the Indian shopper vis-À-vis the rest of the world: least loyal to a single retailer, dislike for pre-packaged fresh foods, willingness to pay more for convenience and services but not a premium price for a brand and demands ethnicity in apparel accessories. And, in the absence of quality control, information about the product and trust in retailers, brands serve as a proxy for all these factors.

Of the current 204 million households in India, the report estimates that only about 13 million households have the income to patronise organised retail. The great news is that this relevant consumer segment will grow five fold from 13 million to 65 million households in the next eight years but mom and pop stores would continue to be relevant across the country, in both small and large towns.

The report, titled ‘The Great Indian Bazaar: Organised Retail Comes of Age in India,’ also suggests retailing in India would require an approach that is distinctively different from the rest of the world. To achieve leadership position in the sector, players would have to integrate real estate into the business model, create an effective and scalable supply chain, increase basket size by shaping consumption, develop and retain talent, influence regulation to ensure healthy development of the sector and to de-risk margins.

“Given the nascent state of organised retail and the rapid evolution of the industry, it is imperative for retailers, manufacturers, real estate developers, logistics providers and partners along the value chain to work in a collaborative spirit,” says Mr Laxman Narasimhan, Director, McKinsey & Co and leader of the Consumer, Retail and Media Practice in India.

source:- the hindu business line

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Retail boom, a boon for farmers?

Posted by superstar23 on September 28, 2008

Indian agriculture is facing a policy paradox. It has been primarily characterised as a means of subsistence, small investments, small return and a source of livelihood for the rural households.

Till recent past element of commerce was limited to a few commercial crops such as jute, sugarcane, cotton etc to provide raw material for particular industries rather than fulfilling the household needs.

Whereas India’s agricultural policy is still rooted in the goal of self-sufficiency in grains, consumption patterns are changing fast towards high value agricultural products such as fruits and vegetables, livestock products and fish.

The policy environment is lagging behind the structural change occurring in India’s consumption and production basket. To develop the agriculture on commercial lines to achieve its accelerated growth rates, the issues of profitability is coming upfront.

Hence, the favourable term of trade with effective market access is basic. This would be conducive to capitalise on resources potential based production through regionally differentiated production strategies to meet the growing and fast changing market demand.

For demand driven and market oriented production, timely backstopping of desired quality of inputs and appropriate technology to start with and necessary mechanism to ensure its availability in the desired form to the consumer ending with finished products, is required to be harmonised and in a continuum.

The super market revolution has been underway in developing countries. Supermarkets refers to all modern retail which includes chain stores of various formats such as supermarket, hypermarket and convenience and neighborhood stores have now gone well beyond the initial upper and middle class clientele to reach the mass market.

Until recently, super markets were not a major form of food retailing in developing countries and confined to only niche markets for higher income consumers in major urban markets.

It is a two-edged sword. On the one hand it can lower food prices for consumers and create opportunities for farmers, processors to gain access to quality differentiated food markets and raise income. On the other hand, it can create challenges for small retailers, farmers and processors who are not equipped to meet the new competition and requirements of super markets. Government has to put in place a number of policies to help both traditional retailers and small farmers pursue policies of competitiveness in the era of supermarket revolutions.

In developing countries the process of super marketisation started in Latin America in early 1990s and by now such markets accounts for more than 50 per cent of retail food sales in many countries of the globe. This is being perceived as the first wave of super marketisation. The South-East Asian supermarkets followed the suit about five to seven years later and now supermarkets are registering rapid growth in many East Asian countries. A third wave has swept across East-Central Europe, and Africa led by South Africa. At present, West Africa, China and India are witnessing a supermarket revolution.

PARADIGM SHIFT:

A paradigm shift is occurring in the retail sector of the Indian economy. This new paradigm of market orientation to suit small and marginal farmers is a real challenge to the agricultural research system. Indian retail industry, which is worth $300 billion in 2006, is likely to reach $427 billion by 2010 and to $637 billion by 2015. Merely 3 per cent of retail in India is organised.

Visible retail revolution is on in India. In a short span of two years, retailing has exploded on the Indian firmament as a humungous business opportunity. Organised retailing has come some way from what it was say as recent as five years ago, but there is a firm belief that: It is only the beginning and the best is yet to come.

Currently, India is one of the top five global destinations for retail investment with more than 21 million people employed in this sector which contribute 13 per cent of the nation’s GDP. In such a scenario food retailing cannot be far behind which account for nearly 60 per cent of the total and that too almost entirely in what is described as unorganised sector.

This is where organised retail has perceived an opportunity. India’s food sector is set to expand exponentially in the coming years. Given the existing low per capita consumption, every increase in income will first translate into higher demand for food until the time basic food needs are satisfied.

Increasing urbanisation and growth of small towns throughout the country coupled with increased income level, diversified food habits, growth of working women outside home, willingness to pay for better quality and need for convenience drive demand for processed, ready-to-cook or ready-to-eat, convenience foods, packaged and preferably branded.

CORPORATE ENTRY:

The traditional model of farm plucked vegetables reaching the market and sold the same day by the petty traders had to slowly give way to sophisticated storage, handling and retailing of these commodities over few days by organised market chains. The initiatives by large corporates are also increasing their outlets by connecting to farmers directly. With appropriate contacting mechanisms stakeholders can also connect to processing industries and fast food chain such as McDonalds, KFC, Pizza Hut and Narulas which continue to expand their operations in India.

Corporates know that the Indian agriculture sector is a potential goldmine that has not been tapped till now and farmers have a lot of reasons to be happy with the corporate entry into agriculture scenario. With plenty of money and manpower’s at their disposal, these corporate Goliaths are attempting to give a new meaning to Indian agriculture.

Many of these corporate are making a beeline to farmers’ doorstep for buying their produce, something, which the poor farmers have never experienced so far. All the times it was the farmers who had to take his produce to the market and search for marketing channels. Corporate entry into agriculture could find an answer that has been plaguing the farm sector for long — proper and affordable price to the farmers. Challenges arising out of fragmented landholdings, limited credit flows and uncertain market conditions would be addressed to a large extent. Importantly, the system will force stakeholders move towards quality related pricing something our country lacks.

COOPERATIVE MOVEMENT:

All these improvements are more than what the government has been able to offer to the agriculture sector. In fact the governmental cooperative movement which was started with the similar idea of procuring, transporting and retailing the produce has been a major disaster with red tape and political interferences clogging its functioning. By moving in and taking over the supply chain in agriculture, corporate India is also breaking the stronghold of middlemen and loan sharks who have been exploiting the farmers.

But the litmus test is whether this new trend is relieving the present constraints that the farmers face in effectively linking with regional, domestic and global markets. How is private sector driving smallholders’ participation in retail food markets? The common perception that private sector will exploit smallholders is slowly changing with the successful demonstration of several corporations that are working with small holders to connect them with domestic and world market.

TRADITIONAL RETAILERS:

As supermarkets spread and their market share grows, the market share of traditional retailers declines. Modern retail can also create jobs which are better paid with better conditions. But it requires more skill and education than employment in the informal retail sector. How well the government and the private sector raise the skills of workers in the distribution sector will determine whether the transition has poverty creating or poverty alleviating effects.

PLETHORA OF LAWS:

Retailing in India is subjected to a plethora of laws/regulations at the central, state and local/municipal levels. There is lack of specific legislation controlling distribution trade and there is no nodal ministry to control and guide the operation of this sector. This has resulted in delays owing to multiple clearance procedures. Single window clearance scheme should be set up. The elimination of market intermediaries will benefit both the producers and the consumers. Farmers selling to retail companies receive higher prices and hence take care of quality aspect. Simultaneously, this also helps to reduce wastage of perishable commodities which is as much as 30 to 40 per cent in case of fruits and vegetables.

SMALL FARMERS’ MANAGEMENT REVOLUTION:

As recommended by Dr MS Swaminathan, chairman of National Commission for Farmers, the Special Agricultural Zones (SAZs) should be established to sustain and expand the retail boom from farm to market. SAZs should aim to bring about a small farm management revolution which can help improve the productivity, profitability and sustainability of the major farming systems of the country. Special incentive and support for conservation of farming, timely supply of credit, effective insurance system and above all post-harvest infrastructure for value addition to primary produce, biomass utilisation and producer oriented marketing must be given to farm families in the SAZs.

The major purposes of such SAZs are: to conserve prime farm land for agriculture and to bridge the prevailing yield gap; To realize the untapped production potential of rainfed areas; To promote organic farming zones; To ensure National Nutrition Security and Food Sovereignty; To bring about a system approach with concurrent attention-consumption-commerce chain; To strengthen the supply chain from farm to the market and to sustain and expand the retail boom. As in the case of SEZ, special incentives and logistic support must be given to farm families in the SAZ areas. These should include support for conservation of farming, timely support for credit, effective insurance system and above all post-harvest infrastructure for vale addition to primary produce, biomass utilization and producer oriented marketing.

There is another land war involving small and marginal farmers possessing fertile agricultural land and those who wish to purchase for setting up SEZs. The answer to this question is not just to persuade small farmers to quit farming by selling their land, however attractive the prevailing price may be. Most of the small farmers after selling their lands will become just landless labourers after a year or two when the money gets exhausted. Therefore, any exit policy for small farmers through land markets must be accompanied by an entry policy to provide them alternative and sustainable non-farm livelihoods — a real contribution of the retail sector. Failure to do will swell the numbers of landless labourers’ families with disastrous social consequences.

This is where the agro processing and retail sector can make a contribution by providing opportunities for skilled non-farm employment. Sustainable food security with home grown food has three additional benefits. First it provides sustainable livelihoods, secondly, it protects our national sovereignty in foreign policy and thirdly, it diminishes the rate of inflation by creating a balance between demand and supply.

Moreover, adoption of integrated agriculture is the major source of job-led economic growth which in a population rich country like India would result in joyless growth. Therefore, SAZs should be promoted on the model of SEZs. Identify in every state areas with a high untapped agricultural potential both under irrigated and rainfed conditions and develop them into SAZs. Introduce with the help of farmers’ organisations and gram sabhas, as well as private sector, integrated package of technology, services, techno-infrastructure and producer-oriented trade; introduce common service centres, including Gyan Chaupals based on CSC programme of the Department of Information Technology with provision for providing key centralised services to support decentralised production. Spread a quality literacy programme, including knowledge of sanitary and phytosanitary measures and codex alimentarius standards of food security.

FDI IN RETAIL:

Currently, a heated debate is on whether or not; Foreign Direct Investment (FDI) in retailing is desirable. FDI is not allowed in retailing. FDI, however, in a single brand is permissible. It is also allowed only in franchising and in commission agent services. The Foreign Investment Promotion Board on a case-by-case basis approves the FDI proposal in the wholesale trade services. Many reputed foreign retailers with deep pockets and deeper market knowledge are waiting in the wings to enter the country. Restriction on FDI may constrain the growth of organised retailing.

Restriction of FDI in food retailing is on account of the apprehension that entry of multinationals will displace millions of workers in the unorganized retailing, which needs thorough examination.

FDI in retailing will expedite the process of development of modern formats in India, bring in technical know-how, reduce inefficiency in the supply chain, increase productivity, help achieve international quality standards and improve the quality of employment and services offered to the consumers. How long the policy barriers will hold remains to be seen. India may well be the final frontier for the global retail giants to conquer.

INADEQUATE STORAGE:

Storage is the biggest challenge because the warehousing facilities in India are totally inadequate. Temperature control and inventory management are two issues that need focused attention. Transportation is another challenge. We need inexpensive, efficient and specific movement including appropriate material handling equipments, cold chains and refrigerated vans. Segmentation based on class of buyers, packaging and store display are areas that deserve attention. Public policy has an increasing role to play in effectively using retail agricultural markets to reduce poverty in rural areas. Public investments in rural roads connecting smallholders in remote hinterlands to market centers can extend the benefits of retail food boom beyond peri-urban areas.

PUBLIC-PRIVATE PARTNERHIP:

Public private partnership can create further competition among the retailers and reduce the welfare losses of the traditional players such as petty traders and street vendors of fresh produce markets. Traditional retailers and street vendors need to be encouraged to form cooperatives from the existing retailers associations. They should be given appropriate training to organise themselves and start retail stores which can effectively compete with the corporate sectors.

Public policy has an increasing role to play in effectively using retail food markets to reduce poverty in rural areas. Following policy and institutional options need immediate attention: Public investments in rural roads, information technology connecting small holders in remote hinterlands to market centres and agricultural research and development leading to improved technologies for farmers, can extend the benefit of retail food boom beyond peri-urban areas; infrastructure and cold storage development of storing, sorting and distribution of fresh goods can bring together small holders in the forms of cooperative and producers associations; facilitating formation of producers associations will induce more private companies to deal with small and medium scale farmers. Contract farming with marketing firms require policy regulations and appropriate legislations to protect small holder as well as private investors.

Multi-stakeholder Contract Farming Regulatory Authority should be established to ensure mutually beneficial partnership between the growers and mega retail trade. Authority should ensure equitable social bargain in this sector and can act as a watchdog body.

source :- commodity online

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India feels the retail pinch

Posted by retailigence on September 28, 2008

With shoppers deserting US retail stores, India is feeling the pinch. Leading American retailers, which outsource goods ranging from shirts to carpets from India, are in the process of reducing their orders.

“There is a 20 per cent decline in apparel orders for the spring-summer season as compared to the last year,” said Premal Udani, MD, Mumbai-based Kaytee Corporation. “Consumption is coming down in the US in a big way.”

Udani’s Kaytee Corporation, which exports to leading US retailers, is among the companies that had ramped up capacities in a big way in 2000 when the quotas on apparels were phased out. “Elimination of quotas was meant to boost our orders. But we do not see any large rise in orders,” said Udani.

Target, one of the leading retail chains in the US, reported a drop of 2.1 per cent in sales in August.

The closure and consequent filing of bankruptcy by some mid-size retail chains have worsened the problem. For instance, Steve & Barry’s, an apparel retail chain firm, has filed for bankruptcy under chapter 11 in July. The New York-based chain was started in 1985 and had 276 retail outlets.

The crisis is going to balloon with leading US retailers like Wal-Mart, Target and JC Penney forced to cut down their orders from India, according to experts.

“It is clear that there will be some slowdown and even Wal-Mart will not be immune to it,” said Rajan Hinduja, MD, Gokaldas Exports. “Though it is too early to give out a strong reaction, the possibility of Indian suppliers getting affected is not ruled out.”

Wal-Mart and JC Penney had set up huge outsourcing offices in India for large-scale outsourcing. Wal-Mart, according to estimates, imports close to $600 million worth of goods from India.

Source: Hindustan Times

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Cash-carry biz firms on hiring spree

Posted by retailigence on September 28, 2008

The wholesale cash-and-carry business in India is set to witness huge levels of recruitment, in the range of 30,000-40,000 people in the next five years. Bangalore-based Metro Cash & Carry India is planning to recruit 10,000 local people to operate at Metro’s wholesale cash-and-carry stores at various levels, in the next three to five years, A John Idicula, director, human resources, Metro Cash & Carry India told FE. Meanwhile, the cash-and-carry division of the Videocon Group is also set to recruit 9,000 people for 60 upcoming ‘Bolld Cash & Carry’ stores, in the next five years, said Sunil Mehta, CEO, cash-and-carry division, Videocon.

Reliance Retail, for its cash-and- carry business, is planning to recruit over 15,000 people, according to Bijou Kurien, president, CEO, lifestyle, Reliance Retail.

After launching two stores in Bangalore and one store in Hyderabad, Metro Cash & Carry is planning to set up a fourth branded store at Bhandup in Mumbai across 1 lakh sqft in a month, apart from Kolkata and Punjab in the near future.

According to Idicula, “With plans of having a pan-India presence for our stores, preferably one store in each city, we want to now recruit local youth who would have passed out from schools. For running the Bhandup store, we have recruited about 350 people. We are tapping local kiranawallas as our main clients based in that locality, apart from other clients such as restaurants, hotels and institutions.”

A person is trained for nine months before operating as a floor manager at a Metro store. While a department manager is provided 6 months’ training, a supervisor is trained for 4 months, explained Idicula. “Most of our employees are hired locally in accrodance with our stores across the globe, where 87% of our senior managers are non-Germans.”

Source: Financial Express

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