Retailigence

“Club of Knowledge Hunters”

Retail hopes alive despite slowdown

Posted by superstar23 on September 19, 2008

MUMBAI: Sam Walton, the founder of Wal-Mart, once said, “I was asked what I thought about recession. I thought about it and decided not to take part.”

Indian retailers who have gathered in Mumbai for their annual conclave, the Indian Retail Forum, seem to be echoing Walton’s view.

Despite all the talk of a slowdown in the economy and the crisis on Wall Street, the mood on the opening day of the event suggested the long-term India growth story was intact, and that the retail practice would gain from it.

Kishore Biyani, founder and chief executive officer of Future Group, said, “There would be ups and downs happening, but India is still a very insular society in a sense. Around 97% of the population doesn’t get affected by interest rate hikes. There are more savers than spenders. Being in business in most of the territories, I want to calm most of the fears in the market.”

Stories in the media over the last couple of months would suggest otherwise: slowdown in consumption, stores having to shut down, operations being downsized and even retailers completely exiting the business or selling out.

Retailers at the meet, however, held that the picture of gloom wasn’t all-pervasive. Going by some, this was a good opportunity to evaluate various practices and prepare for bigger battles.

Subramanian, managing director, Subhiksha, said, “Every two to three years, businesses need to step back and strip flab. We are going through that phase now. We cannot make sense out of Dow Jones or anything else.”

The sentiment was pretty much the same even with non-retailers.

source :- dna news

V Vaidyanathan, ICICI Bank’s executive director, added, “There is no case to say that we are totally decoupled from the world, but structurally, there are things that are right about this country. Growth is inevitable. The demographic dividend is real. Rise of the consumer is real.”

Industry experts said the past two months hadn’t changed their outlook on the long-term growth story.

Ireena Vittal, partner, McKinsey & Company, said though the economy was resilient, the short-term scenario seemed uncertain. But, while there was a likelihood of consumption remaining flat in the short term, robust investments have been planned for the next few 18-24 months, she added.

True, high rentals and paper-thin margins were a cause of worry in the short term, and competition from the much evolved kirana stores was not helping. Still the general mood remains positive, the attendees said.Some even pointed out that Indian retail was still in its infancy and would only learn through its own mistakes.

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