A SURVEY REPORT

ON

“EMERGING TRENDS
OF
INDIAN RETAIL INDUSTRY
&
PROSPECTS FOR XYZ MEGA MART”

1
2
 PREFACE

It gives me immense pleasure to present this report on “A

STUDY ON EMERGING TRENDS OF INDIAN RETAIL INDUSTRY &
PROSPECTS FOR XYZ MEGA MART”.

This report covers the aspects of changing patterns of retail

industry. The concept of organized retailing which is of recent
origin in India needs the proper judgment of its emerging trends
for its growth. It’ll will be helpful for retailers to know where they
are lacking.

This report is submitted as a part of course curriculum of School

of Management Sciences, Varanasi.

This report is written in an easy and comprehend-able language

using systematic methodology.

I have ensured my best to cover all the aspects related to this

topic and make the report purposeful.

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4
 TABLE OF CONTENTS

Page No
• INTRODUCTION OF TOPIC 10
• OBJECTIVES 11-12
• INTRODUCTION 13-72

 XYZ Mega Mart Review 14

 Company Profile 14-17

 Overview of Global & Indian Retail Scenario 18-29

 Industry evolution 30

 Structure of retail industry 31

 Segment of retail industry 32-35

 Recent trends in retailing 36-50

 Newer concept-Farm retailing 51-64

 Opportunity in retail industry 65-72

• RESEARCH METHODOLOGY 73-74
 Type of research
 Sampling technique
 Size of sample
 Universe
 Type of data
 Data collection instrument
 Data analysis technique
 Sources & Statistical analysis
• DATA ANALYSIS, FINDINGS & INTERPRETATION 75-93
• SUGGESTIONS 94-96
• CONCLUSIONS 97-100
• LIMITATIONS 101-102

5
• BIBLIOGRAPHY 103-104
• ANNEXURE 105-109

INTRODUCTION OF THE
PROJECT

This project work deals with the topic:

“A STUDY ON EMERGING TRENDS OF

INDIAN RETAIL INDUSTRY &
PROSPECTS FOR XYZ MEGA MART”.

6
 Company’s Profile

COMPANY PROFILE

NIELSEN COMPANY
The Nielsen Company (erstwhile ACNielsen) was established in
the United States in 1923 by Arthur C. Nielsen, Sr., one of the
founders of the modern marketing research industry. Among
many innovations in consumer-focused marketing and media
research, Mr. Nielsen was responsible for creating a unique retail-
measurement technique that gave clients the first reliable,
objective information about competitive performance and the
impact of their marketing and sales programs on revenues and
profits. Nielsen information gave practical meaning to the concept
of market share and made it one of the critical measures of
corporate performance. Mr. Nielsen also founded the business
known today as Nielsen Media Research, the global leader in
television audience measurement and other media research
services.

ACNielsen opened its first international office in the UK in 1939

and, after World War II, progressively expanded its operations in
Western Europe, Australia and Japan. The company increased its
presence in Asia Pacific in 1994 by acquiring Survey Research
Group, and in the Middle East and Africa in the late 1990s through
the acquisition of AMER World Research.

In 2001, ACNielsen became part of VNU, a world leader in

marketing information, media measurement and information and
business media.
In 2003, VNU announced a new organisational structure for VNU
Marketing Information (MI), its largest business group, to address

7
evolving client needs and to create an enhanced platform for
accelerated growth.
In 2005, VNU attempted to expand into healthcare and
pharmaceutical information by acquiring IMS Health. Although the
merger was terminated in the face of shareholder opposition, the
two companies agreed to work together to develop new
capabilities.
In 2006, VNU was acquired and taken private by a consortium of
six private equity firms.
In 2007, VNU changed its name to The Nielsen Company. This
new identity emphasizes its best known brand name and
underscores its commitment to create an integrated, streamlined
global organization.

What We Do

Nielsen offers an integrated suite of market information gathered

from a wide range of sources, advanced information management
tools, sophisticated analytical systems and methodologies, and
dedicated professional client service to help our clients find the
best paths to growth.

Clients work with our services to:

Measure their market performance

Analyse market dynamics
Diagnose and solve marketing and sales problems, and
Identify and capture growth opportunities
Our people work closely with clients to help them choose the right
set of information and services and use it to make the best
possible decisions.

Market Measurement
Our major market-measurement services provide comprehensive
coverage of:

8
Sales to consumers of fast-moving consumer packaged goods,
gathered at the point of sale in retail stores of all types and sizes.
These retail measurement services provide clients with essential
facts on how their products are performing compared with their
competitors, and on trends and changes in market conditions and
sales results. They also provide critical information on the use of
promotional activities at the retail level, such as special displays
or pricing, and on distribution and stock conditions in retail stores.
Purchases by consumers of packaged goods and other products,
gathered through participating panels of consumer households
and through customised studies. These consumer panel and
consumer research services provide a foundation for
understanding and analyzing consumers’ motivations, attitudes,
behaviour, shopping patterns and demographic characteristics.

Analytical Tools and Services

We offer a wide range of software and professional services that
enable clients to receive, select and evaluate our market-
measurement information, integrate it with their own data and
third-party information, and apply it to specific business issues
and situations.

Clients can view and analyse information from many

perspectives, such as by specific product categories, by
geographic area or by retail channel. We also organize and
present information to suit the specific needs of many individuals
in manufacturing, service and retail organisations, including
general managers, marketing professionals, sales professionals,
purchases, merchandisers and category managers.

Diagnostic Services
Our consumer panel and consumer research services provide
clients with many opportunities and techniques to examine trends
and understand the impact of the market forces that influence
consumers’ purchasing decisions. Consumer panels link
purchasing information to demographics and provide a controlled
environment for examining motivational factors.

9
Our analytical and modelling services provide clients with a range
of options to evaluate and understand why marketing campaigns
succeed or fail, and to address specific future marketing
opportunities and issues, such as promotion optimisation, pricing,
consumer targeting and marketing mix optimisation.

In many markets, we offer a suite of consumer-focused consumer

research techniques and services that address clients’ unique and
specific marketing and sales issues.

Opportunity Identification
While our major clients all share a common focus on consumers,
each individual client has its own distinct set of business
characteristics and marketing and sales concerns. Our
information and services are designed to help each client identify
and act upon unique growth opportunities.

Using a structured and disciplined approach to building and

managing long-term relationships, our people work in close
partnership with their clients to understand their strategies and
business objectives... To design the right suite of Nielsen services
that fits their needs... To agree on clear and measurable business
objectives... And to measure the results and clients’ return on
their investment.

Where We Are
Nielsen’s operations span more than 100 countries.
Headquartered in New York, our major regional business centres
are located in Schaumburg, Illinois; Wavre, Belgium; Hong Kong;
Sydney, Australia; Buenos Aires, Argentina; and Nicosia, Cyprus.

Americas Asia Pacific Europe Middle East &

Africa
Argentina Australia Albania Algeria
Bolivia Azerbaijan Armenia Bahrain

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Brasil Bangladesh Austria Cameroon
Canada China Belarus Egypt
Chile Hong Kong Belgium Ethiopia
Colombia India Bosnia Ghana
Costa Rica Indonesia Bulgaria Israël
Dominican Japan Croatia Ivory Coast
Republic
Ecuador Kazakhstan Cyprus Jordan
El Salvador Kyrgyzstan Czech Republic Kenya
Guatemala Malaysia Denmark Kuwait
Honduras Mongolia Estonia Lebanon
Mexico Nepal Finland Morocco
Nicaragua New Zealand France Namibia
Panamá Philippines Georgia Nigeria
Paraguay Singapore Germany Oman
Peru South Korea Greece Pakistan
Puerto Rico Sri Lanka Hungary Qatar
United States Taiwan Ireland Saudi Arabia
Uruguay Tajikistan Italy South Africa
Venezuela Thailand Latvia Tanzania
Turkmenistan Lithuania Tunisia
Vietnam Macedonia Uganda
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Emirates
Netherlands, Yemen
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Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Slovenia
Spain
Sweden
Switzerland
Turkey

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 Ukraine
United
Kingdom

12
 OUR LEADERSHIP

Meet The Nielsen Company's South Asia Leadership Team.

Piyush Mathur
President, India Region

Justin Sargent
Managing Director-Consumer, India
Region

Farshad Family
Managing Director-Media, India Region

Samipendra Chaudhury
Senior Vice President-Finance, India
Region

Prasun Basu
Vice President & Region Head for
BASES and Consumer Research
Division

Roosevelt D'Souza
Executive Director, Retail Measurement
Services, India Region

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Radhika Chandok
Executive Director-RMS Product
Leadership, India Region

Dipita Chakraborty
Executive Director, Retailer & Shopper
Practice, India Region

Adrian Terron
Vice President, Global Communications
& Marketing, India Region

Sathish Kumar
Executive Director - Infrastructure,
India Region

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 BRAND DYNAMICS
Brand Managers need to ensure they have the right range of
products to maximise consumer sales, and that they manage the
assortment they offer efficiently. Key questions include:
• Do we have an efficient assortment?
• What is the optimal number of SKUs within a category or
brand?
• Where will volume go if SKUs are deleted?
Pricing
In a highly competitive world, it is essential that brands are priced
correctly. With retailers increasingly focused on “every-day low
pricing,” it’s important to the right tools to position a brand. Some
of the key questions include:
• Can we afford to take a price increase without losing sales?
• How price sensitive are our consumers?
• What pricing strategies will maximise sales?
• What are the price sensitivity points?

Category Dynamics
Understanding what consumers are purchasing in and across
stores is key to addressing issues such as:
• Which products drive category growth?
• Which categories drive store growth?
• Which categories drive department growth?
• Where are the retail opportunities for my category?
• How does my category perform by retail banner?
In addition, getting the right mix and number of products in the
category is a challenge. Category Managers face issues,
including:
• Assortment – what is the most appropriate product mix?
• What is the optimal number of SKUs within a category /
brand?
• Where will volume go if SKUs are deleted?

15
 COMPETITIVE ANALYSIS
Brand Management
Competitive monitoring and analysis is one of Nielsen’s core roles
for Brand Managers. Our services enable you to understand your
competitive performance and stay one step ahead. Key questions
and issues include:
• What are my market shares and trends?
• How are my brands performing compared with my
competitors?
• How important is private label to my buyers?
• How successful are my competitors at building volume and
loyalty?

Category Management
Category Managers must understand their performance in context
with other categories that compete for the same share of
consumer spending. Knowing which categories to watch is half
the battle. Some issues to consider include:
• What other categories interact with mine, and which are
important?
• What cross category opportunities are there?
• How loyal are category buyers?

Sales Management
Sales Managers must be aware of all the competitive action in a
category. The issues in a competitive environment include:
• How does my price compare with competitors’ prices?
• What is my share of space compared with my competition?
• What is the relevance of private label to my competitive
position

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 PRODUCTS & SERVICES

Nielsen markets a wealth of information products, together with

services and tools that help clients use information correctly to
address specific business issues and decisions.

Retail Measurement
Our Retail Measurement Services (RMS) provide continuous
tracking of product sales to consumers, based on information
gathered at the retail point-of-sale. Clients receive detailed
information on sales, market shares, distribution, pricing and
merchandising and promotional activities. RMS information is
available in more than 80 countries.

Consumer Panel
Consumer Panel research tracks the purchasing behaviour of
consumers in over 125,000 households in 24 countries worldwide,
primarily through the use of in-home scanners. Panel information
reveals consumers’ purchasing from all outlets they visit and
provides insights into who is buying, methods of payment, use of
coupons and participation in frequent shopper programs.

Assortment and In-Store Space

Our team of experts work with retailers and manufacturers
around the world to deliver business-driven, easy-to-implement
solutions that provide a measurable return on their investment in
managing assortment and in-store space. We help them make
key decisions on issues such as shelf inventories, shelf space,
category growth opportunities, product listings and how best to
distribute merchandising information.

Consumer Research

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Our diverse and powerful suite of Consumer Research services
help clients obtain qualitative and quantitative measures of
consumers’ attitudes and purchasing behaviour, customer
satisfaction, brand awareness and equity, advertising
effectiveness and other marketing issues.

Retailer Services
Our services for retailers are designed to help them understand
what attracts consumers to their stores. Retailers work with us to
evaluate competitive performance, increase traffic and sales,
leverage their frequent-shopper data and build consumer loyalty,
improve performance of their private label products and
understand their results across all product classes and categories
they carry.

Modelling & Analytics

Our advanced Modelling & Analytical Services help clients address
such key business issues as pricing, promotion, marketing mix,
assortment and product rationalisation, category placement,
category structure and in-store, in-market auditing and testing.

Nielsen Online
Nielsen's Internet audience measurement services, syndicated
and proprietary tools and custom analytics provide actionable
insights to help you measure your audience, evaluate and
differentiate your site, track the competition and develop
measurably-effective site content.

NM Incite
NM Incite, a Nielsen McKinsey company, helps businesses harness
the full potential of social media intelligence to drive superior
business performance across client organizations. NM Incite
equips companies with the capabilities to better understand,

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value and take advantage of rich consumer insights available on
social media.

Decision Support
We provide clients with a wide range of software tools and
delivery methods designed to put the right information on the
desks of decision-makers at the moment they need it. These tools
range from advanced analytical and data-management systems
for sophisticated users to standard reports for end-users that are
automatically refreshed when our databases are updated.

Global Services
Nielsen Global Services coordinates with local Nielsen offices
throughout the world to deliver clear, consistent information
across markets. This helps manufacturers effectively understand
emerging marketing opportunities for global brands. Utilizing
consistent and comparable cross-country data, combined with
local country information, Nielsen Global Services provides
information-based solutions to worldwide marketers with a broad
international scope.

Business Consulting Services

Nielsen Business Consulting Services address your CEO agenda,
bringing decades of data management, advanced analytics and
strategic management expertise to bear on the high-level issues
facing your business. We offer proven, prescriptive roadmaps to
success that help your team answer the all-important “where to
play” and “how to win” questions.

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20
 OBJECTIVES

1. To evaluate the recent trends of Indian retail industry in order to

come out with prospects for India’s one of leading retail chains –
XYZ Mega-Mart.

2. Simultaneously to know the people perceptions towards

retail outlets.

3. To know the consumer’s expectations from XYZ

Mega Mart.

4. To come out with conclusions & suggestions based

on the analysis & interpretation of the data.

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 COMPANY PROFILE

V I S H A L
Value Increase Shopping Hypermarket Affordable Low Price
• Founded in1986 in Kolkata.
• 180 showrooms in 100 cities/24 states.
• Opened as Indian 1st hyper-market.

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 • Turnover : 2005 - Rs. 1463.12mn

2006 - Rs. 2884.43mn

2007 - Rs. 6026.53mn

2008 – Rs. 1,005.31mn

• It has over 70,000 products range.

• Covering about 29,90,146 sq. ft. in 24 states across india.

XYZ Apparels Brands

Zeppelin : Mens Shirts & Trousers Fizzy Babe : Ladies & Kids Girls

Kitaan Studio : Mens Shirts & Trousers Jasmine : Ladies & Kids Girls

Blues & Khakis Mens Trousers Zero Degree : Kids Boys

Paranoia : Mens Shirts & T-Shirts Soil : Mens Shirts

Chlorine : Mens Shirts Massa Bay : Mens Trousers & Bermudas

Mens Shirts, T-Shirts,
Fume :
UnderGarments.

Any place that calls itself ‘XYZ’ – which means big – and also, adds a ‘mega’ to
its name must be gigantic, right? Wrong! The only thing big about this place is its
name. The rest would give a pimple an inferiority complex. Just goes to show you
the magnitude of their extremely inflated egos that they have to call themselves
such a thing.

Fine, now that we are in, let’s check out what they have to offer. The clothes look
decent, feel decent and are also decently priced, but decency isn’t actually a virtue
now-a-days. Despite the absence of any well known brands, their range is pretty
diversified and well maintained. They stack clothes for men – two floors of it, by
the way – women and children and most new designs find mention. You’d have to
actually take the plunge and buy stuff to discover whether they would last though.
The place on the whole is worth a visit, for the clothes, if not for anything else.

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Started as a humble one store enterprise in 1986 in
Kolkata(erstwhile, Calcutta) is today a conglomerate encompassing
180 showrooms in 100 cities / 24states. India’s first hyper-market
has also been opened for the Indian consumer by XYZ. Situated in
the national capital Delhi this store boasts of the singe largest
collection of goods and commodities sold under one roof in India.

XYZ Retail is one of the fastest growing retail chain in Indian Retail
market. The chain has currently 180 showrooms in 24 states. The
XYZ brand is known for great modern style for men, women, and
children. XYZ offers high level fashion styling. Since 1986, the name
XYZ has been synonymous quality, value, and fashion integrity. The
company was started under the leadership of Mr. Ram Chandra
Agarwal, a dynamic personality.

XYZ offers an unparalleled collection of cloths for the entire family. .

Each garment is hand selected for quality and contemporary styling.
XYZ manufactures majority of its own garments and out sources
some under its direct quality supervision. This enables us to offer
the lowest possible and most reasonable prices.

Its goal is to provide a range of fashion wear to suit every pocket.

Our product mix represents the most current fashion trends in tops,
bottoms, formals and accessories for men, women and kids. Our
courteous staff will ensure that consumers get a perfect fit. All XYZ’s
stores are air conditioned and tastefully decorated with easy excess
to the products, giving to customers a unique shopping experience.
XYZ’s trained staff will be able to help you select the garment of
your choice and also help you color coordinates the accessories that
you may want to buy.

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The group is today Rs. 6026.53 million company. The group’s prime
focus is fashion retailing. The XYZ stores offer affordable family
fashion at prices to suit every pocket.

The group’s philosophy is integration and towards this end has

initiated backward integration in the field of high fashion by setting
up a state of the art manufacturing facility to support its retail
endeavors.

XYZ is one of fastest growing retailing groups. XYZ’s outlets

cater to almost all price ranges. Our showrooms have a product
range so wide that all your household needs can be catered under
one roof. Our stores give you international quality goods and prices
hard to match. The cost benefits that we derive from our large
central purchase of goods and services are passed on to the
consumer.

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Our loyalty programme gives the Indian consumer of being
rewarded every time he makes a purchase
at any of our stores anywhere in the
country. Consumers can make purchases
at any store and accumulate points at a
central level. These points are redeemable
at any of our stores. You can accumulate
points even when you make a purchase
while traveling and redeem points at any
store. So no matter where you are in India you can partake in our
loyalty programme.

26
27
RETAIL INDUSTRY

The India Retail Industry is the largest among all the industries, accounting for

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over 10 per cent of the country’s GDP and around 8 per cent of the employment.
The Retail Industry in India has come forth as one of the most dynamic and fast
paced industries with several players entering the market. But all of them have not
yet tasted success because of the heavy initial investments that are required to
break even with other companies and compete with them. The India Retail Industry
is gradually inching its way towards becoming the next boom industry.

The total concept and idea of shopping has undergone an attention drawing change
in terms of format and consumer buying behavior, ushering in a revolution in
shopping in India. Modern retailing has entered into the Retail market in India as is
observed in the form of bustling shopping centers, multi-storied malls and the huge
complexes that offer shopping, entertainment and food all under one roof.

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 factors in the growth of
the organized Retail sector in India. The growth pattern in organized retailing and
in the consumption made by the Indian population will follow a rising graph
helping the newer businessmen to enter the India Retail Industry.

In India the vast middle class and its almost untapped retail industry are the key
attractive forces for global retail giants wanting to enter into newer markets, which
in turn will help the India Retail Industry to grow faster. Indian retail is expected to
grow 25 per cent annually. Modern retail in India could be worth US$ 175-200
billion by 2016. The Food Retail Industry in India dominates the shopping basket.

The Mobile phone Retail Industry in India is already a US$ 16.7 billion business,
growing at over 20 per cent per year. The future of the India Retail Industry looks
promising with the growing of the market, with the government policies becoming
more favorable and the emerging technologies facilitating operations.

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The Global Retail Scenario

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Large format retail businesses dominate the retail landscape in the United States
and across Europe, in terms of retail space, categories, range, brands, and volumes.
Indian retail industry cannot hope to learn much by merely looking at the Western
success stories in retail. Their scales of operations are very huge, the profit margins
that they earn are also much higher and they operate in multiple formats like
discount stores, warehouses, supermarkets, departmental stores, hyper-markets,
convenience stores and specialty stores.. The economy and lifestyle of the West is
not in line with that of India and hence the retailing scene in India has not evolved
in the same format as the West nor can we learn valuable lessons from their style
of operations.

In retailing, the conventional wisdom used to be, that, the critical success factor
was location. But precise location no longer matters and geo-demographics is
increasingly becoming irrelevant. The leading multiple chain retailers, superstores
and malls create their own centers of gravity, attracting customers by car, bus, train
or even by plane to wherever they are located.

The growth of multiple chain retailers has been relentless for many years in the
west and this has been accompanied by the development of retail names as brands
in their own right. Discount retailer Walmart has catapulted to the top of the
Fortune 500 rankings in the U.S. with a turnover of $258 billions (2003 revenues –
the basis for 2004 rankings), ahead even of oil major Exxon Mobil and the
mammoth manufacturing giant General Electric.

Wal-Mart is the world’s largest retailer. Already the world’s largest employer with
over 1million associates, Wal-Mart displaced oil giant Exxon Mobil as the world’s
largest company when it posted $219 billion in sales for fiscal 2001. Wal-Mart has
become the most successful retail brand in the world due its ability to leverage
size, market clout, and efficiency to create market dominance. Wal-Mart heads
Fortune magazine list of top 500 companies in the world. Forbes Annual List of
Billionaires has the largest number (45/497) from the retail business.
A ruthless policy, of, ‘Always Low prices - Always’ has brought Walmart to the
top. On the day after Thanks giving in November 2002, Wal-Mart sales hit $1.43
billion in one single day. Walmart and Nordstrom in the U.S. and Sainsbury’s and
Marks & Spencer in the U.K. have grown by rapid geographic expansion in their

31
own countries. Specialists like Benetton of Italy and IKEA of Sweden and The
Body Shop of the UK are international and the fast food chains like McDonald’s
and Pizza Hut are everywhere. The same products are increasingly available from
the same names on every continent. Retailers worldwide have immensely benefited
from the sustained growth of the disposable income of their global consumers.
Retail has played a major role world over in increasing productivity across a wide
range of consumer goods and services.

The impact can be best seen in countries like U.S.A., U.K., Mexico, Thailand and
more recently China. Economies of countries like Singapore, Malaysia, Hong
Kong, Sri Lanka and Dubai are also heavily assisted by the retail sector.

Retail is the second-largest industry in the United States both in number of

establishments and number of employees. It is also one of the largest world-wide.
The retail industry employs more than 22 million Americans and generates more
than $3 trillion in retail sale annually. Retailing is a U.S. $7 trillion sector.

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Geographic Saturation:

The end of the nineties has signified a turning tide of retailer power. The limit to
retail ambition is geographic saturation. There is already a fear that the U.S is
‘over- malled’, that available shopping space exceeds customer demand for
products. The retailer logic that ‘if we build new stores they will come’, is being
belied. Many retailers have started postponing their store expansion plans. The
track record of some of their international store expansions is also not promising.

Category Killer Competition:

The threat of saturation is accompanied by a new competition from the low cost
category killers. Specialist competition is eating away at the market share and
forcing down the prices and gross margins of the multiple chains. The success of
the giant killers in the toys segment – Toys R Us and in home furnishings – Home
Depot, in the area a case in point.

Alternative Shopping Channels:

The newest retail format that is showing growth in the U.S., and is more
frightening for retailers than for consumers, is the Internet. The potential for on-
line shopping which is growing in the U.S. questions retailers’ investments in more
physical sites and stores and makes it imperative that they too explore the new
agenda of ‘E-retailing’ or ‘e-tailing

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 The Indian Retail Scenario
Retail is India's largest industry. It accounts for over 10 per cent of the India's GDP
and around eight per cent of the employment. Retail sector is one of India's fastest
growing sectors with a 5 per cent compounded annual growth rate. India's huge
middle class base and its untapped retail industry are key attractions for global
retail giants planning to enter newer markets. Driven by changing lifestyles, strong
income growth and favorable demographic patterns, Indian retail is expected to
grow 25 per cent annually. The Indian retail industry is expected to grow to $427
billion in 2010 and $637 billion in 2015. Retailers of multiple brands can operate
through a franchise or a cash-and-carry wholesale model. It is expected that retail
in India could be worth US$ 175-200 billion by 2016.

India is the country having the most unorganized retail market. Traditionally it is a
family’s livelihood, with their shop in the front and house at the back, while they
run the retail business. More than 99% retailers function in less than 500 square
feet of shopping space. Global retail consultants KSA Technopak, have estimated
that organized retailing in India is expected to touch Rs 35,000 crore in the year
2005-06. The Indian retail sector is estimated at around Rs 900,000 crore, of which
the organized sector accounts for a mere 3 per cent indicating a huge potential
market opportunity that is lying in the waiting for the consumer-savvy organized
retailer. Emerging markets such as India and China are the final frontier for retail
taking the focus away from saturated Western markets. Since 2001, 49 global
retailers entered 90 new markets, but at the same time, 17 retailers left markets in
2005.

The organized retail industry in India had not evolved till the early 1990s. Until
then, the industry was dominated by the un-organized sector. It was a sellers
market, with a limited number of brands, and little choice available to customers.
Lack of trained manpower, tax laws and government regulations all discouraged
the growth of organized retailing in India during that period. Lack of consumer
awareness and restrictions over entry of foreign players into the sector also
contributed to the delay in the growth of organized retailing. Foundation for
organized retail in India was laid by Kishore Biyani of Pantaloon Retails India

34
Limited (PRIL). Following Pantaloon's successful venture a host of Indian
business giants such as Reliance, Bharti, Birla and others are now entering into
retail sector.

A number of factors are driving India's retail market. These include: increase in the
young working population, hefty pay-packets, nuclear families in urban areas,
increasing working-women population, increase in disposable income and
customer aspiration, increase in expenditure for luxury items, and low share of
organized retailing. India's retail boom is manifested in sprawling shopping
centers, multiplex- malls and huge complexes that offer shopping experience,
complete entertainment and different types of food all under one roof.

But there is a flip side to the boom in the retail sector. It is feared that the entry of
global business giants into organized retail would make redundant the neighbour-
hood kiryana stores resulting in dislocation in traditional economic structure. Also,
the growth path for organized retail in India is not hurdle free. The taxation system
still favours small retail business. With the intrinsic complexities of retailing such
as rapid price changes, constant threat of product obsolescence and low margins
there is always a threat that the venture may turn out to be a loss making one.

A perfect business model for retail is still in evolutionary stage. Procurement is

very vital cog in the retail wheel. The retailer has to fight issues like fragmented
sourcing, unpredictable availability, unsorted food provisions and daily fluctuating
prices as against consumer expectations of round-the-year steady prices, sorted and
cleaned food and fresh stock at all times. Trained human resource for retail is
another big challenge. The talent base is limited and with the entry of big giants
there is a cat fight among them to retain this talent. This has resulted in big salary
hikes at the level of upper and middle management and thereby eroding the profit
margin of the business. All the companies have laid out ambitious expansion plans
for themselves and they may be hampered due lack of requisite skilled manpower.

But retail offers tremendous for the growth of Indian economy. If all the above
challenges are tackled prudently there is a great potential that retail may offer
employment opportunities to millions living in small town and cities and in the

35
process distributing the benefits of economic boom and resulting in equitable
growth.

Purchasing power of Indian urban consumer is growing and branded merchandise

in categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even
Jewellery, are slowly becoming lifestyle products that are widely accepted by the
urban Indian consumer. Indian retailers need to advantage of this growth and
aiming to grow, diversify and introduce new formats have to pay more attention to
the brand building process. The emphasis here is on retail as a brand rather than
retailers selling brands. The focus should be on branding the retail business
itself. In their preparation to face fierce competitive pressure, Indian retailers must
come to recognize the value of building their own stores as brands to reinforce
their marketing positioning, to communicate quality as well as value for money.
Sustainable competitive advantage will be dependent on translating core values
combining products, image and reputation into a coherent retail brand strategy.

There is no doubt that the Indian retail scene is booming. A number of large
corporate houses — Tata’s, Raheja’s, Piramals’s, Goenka’s — have already made
their foray into this arena, with beauty and health stores, supermarkets, self-service
music stores, new age book stores, every-day-low-price stores, computers and
peripherals stores, office equipment stores and home/building construction stores.
Every retail category has been attacked, by the organized players today. The Indian
retail scene has witnessed too many players in too short a time, crowding several
categories without looking at their core competencies, or having a well thought out
branding strategy.

As the corporates – the Piramals, the Tatas, the Rahejas, ITC, S.Kumar’s, RPG
Enterprises, and mega retailers- Crosswords, Shopper’s Stop, and Pantaloons race
to revolutionize the retailing sector, retail as an industry in India is coming alive.
Retail sales in India amounted to about Rs.7400 billion in 2002, expanded at an
average annual rate of 7% during 1999-2002. With the upturn in economic growth
during 2003, retail sales are also expected to expand at a higher pace of nearly
10%. Across the country, retail sales in real terms are predicted to rise more
rapidly than consumer expenditure during 2003-08. The forecast growth in real
retail sales during 2003- 2008 is 8.3% per year, compared with 7.1% for consumer

36
expenditure. Modernization of the Indian retail sector will be reflected in rapid
growth in sales of supermarkets, departmental stores and hyper marts. Sales from
these large-format stores are to expand at growth rates ranging from 24% to 49%
per year during 2003-2008, according to a latest report by Euro monitor.

In a developing country like India, a large chunk of consumer expenditure is on

basic necessities, especially food-related items. Hence, it is not surprising that
food, beverages and tobacco accounted for as much as 71% of retail sales in 2002.
The share of food related items had, however, declined over the review period,
down from 73% in 1999. This is not unexpected, because with income growth,
Indians, like consumers elsewhere, have started spending more on non-food items
compared with food products. Sales through supermarkets and department stores
are small compared with overall retail sales.

Nevertheless, their sales have grown much more rapidly, at almost a triple rate
(about 30% per year during the review period). This high acceleration in sales
through modern retail formats is expected to continue during the next few years,
with the rapid growth in numbers of such outlets due to consumer demand and
business potential.

The factors responsible for the development of the retail sector in India can be
broadly summarized as follows:

• Rising incomes and improvements in infrastructure are enlarging consumer

markets and accelerating the convergence of consumer tastes. Looking at income
classification, the National Council of Applied Economic Research (NCAER)
classified approximately 50% of the Indian population as low income in 1994- 95;
this is expected to decline to 17.8% by 2006-07.

• Liberalization of the Indian economy which has led to the opening up of the
market for consumer goods has helped the MNC brands like Kellogs, Unilever,
Nestle, etc. to make significant inroads into the vast consumer market by offering a
wide range of choices to the Indian consumers.

37
• Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic,
etc.

• The internet revolution is making the Indian consumer more accessible to the
growing influences of domestic and foreign retail chains.

Reach of satellite T.V. channels is helping in creating awareness about global

products for local markets. About 47% of India’s population is under the age of 20;
and this will increase to 55% by 2015. This young population, which is
technology-savvy, watch more than 50 TV satellite channels, and display the
highest propensity to spend, will immensely contribute to the growth of\ the retail
sector in the country. As India continues to get strongly integrated with the world
economy riding the waves of globalization, the retail sector is bound to take big
leaps in the years to come.

The Indian retail sector is estimated to have a market size of about $ 180 billion;
but the organised sector represents only 2% share of this market. Most of the
organised retailing in the country has just started recently, and has been
concentrated mainly in the metro cities. India is the last large Asian economy to
liberalize its retail sector. In Thailand, more than 40% of all consumer goods are
sold through the super markets and departmental stores. A similar phenomenon has
swept through all other Asian countries. Organised retailing in India has a huge
scope because of the vast market and the growing consciousness of the consumer
about product quality and services.

A study conducted by Fitch, expects the organized retail industry to continue to

grow rapidly, especially through increased levels of penetration in larger towns and
metros and also as it begins to spread to smaller cities and B class towns. Fuelling
this growth is the growth in development of the retail-specific properties and malls.
According to the estimates available with Fitch, close to 25mn sq. ft. of retail space
is being developed and will be available for occupation over the next 36-48
months. Fitch expects organized retail to capture 15%-20% market share by 2010.

A McKinsey report on India says organised retailing would increase the efficiency
and productivity of entire gamut of economic activities, and would help in

38
achieving higher GDP growth. At 6%, the share of employment of retail in India is
low, even when compared to Brazil (14%), and Poland (12%).

Retailing in India is gradually inching its way to 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. Modern retail has entered
India as seen in sprawling shopping centres, 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 organised
retail and growth in the consumption by Indians is going to adopt 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 working-women population
and emerging opportunities in the services sector are going to be the key growth
drivers of the organised retail sector.

Initially, this was about Indian corporate houses rolling out malls and
supermarkets, but with Wal-Mart coming into the Indian market, the era of the
superstore is dawning. Unlike the kirana stores that served us for decades, this new
breed of retail chains is heavily dependent on IT.

Wal-Mart, the world’s largest retailer, and Bharti Enterprises have signed a
Memorandum of Understanding (MoU) to explore business opportunities in the
Indian retail industry. This joint venture will mark the entry of Wal-Mart into the
Indian retailing industry.

The biggest competitor for Bharti-Wal-Mart is likely to be Reliance Retail, the

retail wing of Reliance, which had planned to establish 10,000 stores by 2010. It
had already opened 11 pilot stores under the “Reliance Fresh” format in
Hyderabad.

All these trends and developments present a great business opportunity for
software and hardware vendors from across the globe. Indian solution providers
are targeting this segment have reason to rejoice. For while organised retail

39
occupies a miniscule two to three percent of the overall Indian retailing industry,
that is poised to change.

• Traditionally retailing in India can be traced to

– The emergence of the neighborhood ‘Kirana’ stores catering to the convenience

of the consumers.
– Era of government support for rural retail: Indigenous franchise model of store
chains run by Khadi & Village Industries Commission

• 1980s experienced slow change as India began to open up economy.

• Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and
Grasim first saw the emergence of retail chains

• Later Titan successfully created an organized retailing concept and established a

series of showrooms for its premium watches

• The latter half of the 1990s saw a fresh wave of entrants with a shift from
Manufactures to Pure Retailers.

• For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and
Music World in music; Crossword and Fountainhead in books.

• Post 1995 onwards saw an emergence of shopping centers,– mainly in urban

areas, with facilities like car parking

• Emergence of hyper and super markets trying to provide customer with 3 V’s -
Value, Variety and Volume

40
• Expanding target consumer segment: The Sachet revolution - example of
reaching to the bottom of the pyramid.

• At year end of 2000 the size of the Indian organized retail industry is estimated at
Rs. 13,000 crore

STRUCTURE OF RETAIL INDUSTRY IN INDIA

The retail industry continued in India in the form of Kiranas till 1980. Soon,
following the modernisation of the retail sector in India, many companies started
pouring in the retail industry in India like Bombay Dyeing, Grasim etc. As has
been mentioned earlier the retail sector in India can be widely split into the
organised and the unorganized sector. The unorganized sector is predominant.

Unorganized Retail Sector

The unorganized retail sector basically includes the local kiranas, hand cart, the
vendors on the pavement etc. This sector constitutes about 98% of the total retail
trade.

Organised Retail Sector

The organised sector trading is undertaken by the licensed retailers who have
registered themselves to sales as well as income tax. The organised retail sector
have in their ambit, corporate backed hypermarkets and retail chains. The private
large business enterprises are also included under the organised retail category.

The organised retail sector can be further subdivided into:

In-store Retailers

This type of retail format is also known as the brick and mortar format. These retail
stores are in the form of fixed point sale outlets. They are specially designed to lure
the customers. There are different types of stores through which the instore
retailers operate. Branded Stores appear in the form of exquisite showrooms. Here

41
the total range of a particular brand is available and the quality is certified by the
government. There are also multi brand specialty stores that sell a series of brands
so that the consumers are free to choose from the wide variety of available brands.

SEGMENT OF RETAIL

The Indian retail industry is diversified into different segments such as clothing,
textile, jwelery, wathches, footwear, health and beauty product, consumer durables,
Mobile, furniture,food & grocery, book, music etc.In terms of retail sale the major
contribution is of food & grocery, followed by clothing and textile, jwelery etc.
Now if we look at the table above then it is
evident that in organised retail sale, clothing, textile & fashion accessiories

42
dominates in terms of sale followed by food and grocery sale. The total
contribution of organised retail is just 3 % of total retailing. In percentage terms
clothing, textile & fashiopn accessiories dominates the organised reatil sale. So one
thing can be concluded here that inspite of having good retail sale in food and
grocery ,organised retail contributes only 11% .

Grafical representation of expenditure on consumption

If we look at the Indian consumption and expenditure than it become quite

obivious that majar share of expenditure on consumption is being utilised in retail
sales. From the above graph is clear that out of the Rs 16,90,000 cr expenditure in

43
final consumption the major share is retail sale. It is 55% (ie. Rs. 9,30,000 out of
Rs 16,90,000) of the total expenditure. This graph also tell us the story of lion,
which being the fast moving consumer goods in the retail sector. The US$ 6.1
billion Indian foods industry, which forms 44 per cent of the entire FMCG sales, is
growing at 9 per cent and has set the growth agenda for modern trade formats.

The Indian retail sector can be broadly classified into:

a) FOOD RETAILERS

There are large number and variety of retailers in the food-retailing sector.
Traditional types of retailers, who operate small single-outlet businesses mainly
using family labour, dominate this sector .In comparison, super markets account
for a small proportion of food sales in India. However the growth rate of super
market sales has being significant in recent years because greater numbers of
higher income.

b) HEALTH & BEAUTY PRODUCTS

44
With growth in income levels, Indians have started spending more on health and
beauty products .Here also small, single-outlet retailers dominate the market
However in recent years, a few retail chains specializing in these products have
come into the market. Although these retail chains account for only a small share
of the total market , their business is expected to grow significantly in the future
due to the growing quality consciousness of buyers for these products .

c) CLOTHING & FOOTWEAR

Numerous clothing and footwear shops in shopping centers and markets operate all
over India. Traditional outlets stock a limited range of cheap and popular items; in
contrast, modern clothing and footwear stores have modern products and attractive
displays to lure customers. However, with rapid urbanization, and changing
patterns of consumer tastes and preferences, it is unlikely that the traditional outlets
will survive the test of time.

d) HOME FURNITURE & HOUSEHOLD GOODS

Small retailers again dominate this sector. Despite the large size of this market,
very few large and modern retailers have established specialized stores for these
products. However there is considerable potential for the entry or expansion of
specialized retail chains in the country.

e) DURABLE GOODS

The Indian durable goods sector has seen the entry of a large number of foreign
companies during the post liberalization period. A greater variety of consumer
electronic items and household appliances became available to the Indian
customer. Intense competition among companies to sell their brands provided a
strong impetus to the growth for retailers doing business in this sector.

f) LEISURE & PERSONAL GOODS

Increasing household incomes due to better economic opportunities have

45
encouraged consumer expenditure on leisure and personal goods in the country.
There are specialized retailers for each category of products (books, music
products,etc.) in this sector. Another prominent feature of this sector is popularity
of franchising agreements between established manufacturers and retailers.

RECENT TRENDS IN RETAILING

Earlier in the Retail industry growth rate graph is is quite clear that retail industry
is growing at a steady pace of 8-9 %.bUt the organised retail is growing at a very
fast pace ie, 30%. So it is estimated that by the year ending 2010 the total volume
of organised retail will be near to Rs 100,000 cr.
“Structural changes in retail will surely start
affecting a large number of small retailers at some stage, be it after one or two

46
decades, especially when the overall size of the organized retail in food reaches
about 25-30%,” said the report prepared by researchers of the International Food
Policy Research Institute (IFPRI) and Michigan State University (MSU). The
emerging structural transformation in retail trade would benefit the society as a
whole, but noted that “the gains will accrue early to consumers

Malls in India

The largest form of organized retailing today. Located mainly in metro cities, in
proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above.
They lend an ideal shopping experience with an amalgamation of product, service
and entertainment, all under a common roof. Examples include Shoppers Stop,

47
Piramyd, and Pantaloon. Over the last 2-3 years, the Indian consumer market has
seen a significant growth in the number of modern-day shopping centers, popularly
known as ‘malls’. There is an increased demand for quality retail space from a
varied segment of large-format retailers and brands, which include food and
apparel chains, consumer durables and multiplex operators.

Shopping-centre development has attracted real-estate developers and corporate

houses across cities in India. As a result, from just 3 malls in 2000, India is all set
to have over 220 malls by 2005. Today, the expected demand for quality retail
space in 2006 is estimated to be around 40 million square feet. While previously it
was the large, organised retailers – with their modern, up-market outlets, and direct
consumer interface- who had been a key factor driving the growth of organized
retail in the country, now it is the malls which are playing the role.

Factors such as availability of physical space, population densities, city planning,

and socio-economic parameters have driven the Indian market to evolve, to a
certain extent, its own definition of a ‘mall’. For example, while a mall in USA is
400,000 to 1 million sq.ft. in size, an Indian version can be anywhere between
80,000 sq.ft. and 500,000 sq.ft. By 2005, total mall space in the 6 cities of
Mumbai, Bangalore, Hyderabad, Chennai, Kolkata, and National Capital Region
(Delhi, Noida, Gurgaon) is expected to increase to over 21.1 million sq. ft.

Compared to other big cities, Kolkata and Hyderabad are relatively new entrants in
the mall segment, but are witnessing quick growth. Smaller cities like Pune,
Ahmedabad, Lucknow, Ludhiana, Jaipur, Chandigarh and Indore, are also
expected to see a formidable growth in the growth of malls in the near future. But
malls in India need to have a clear positioning through the development of
differential product assortment and differential pricing, in order to compete
effectively in a growing mall market.

Segmentation in malls, like up-market malls, mid-market malls, etc. , proper

planning, correct identification of needs, quality products at lower prices, the right
store mix, and the right timing, would ensure the success of the ‘mall revolution’ in
India.

48
• Supermarkets (Foodworld,Spencer’s)
• Hypermarkets (Big Bazaar,Trent )
• Department Stores (Shoppers Stop,LifeStyle)
• Specialty Chains (Spar)
• Discount Chains (Subhiksha)
• Cash ‘N’ Carry (Metro)
• Petro Convenience (In & Out, Shell)
• Kiranas: Traditional Mom and Pop Stores
• Kiosks
• Street Markets
• Exclusive /Multiple Brand Outlets

49
Hyper marts/Supermarkets

Large self-service outlets, catering to varied shopper needs are termed as

Supermarkets. These are located in or near residential high streets. These stores
today contribute to 30% of all food & grocery organized retail sales. Super
Markets can further be classified in to mini supermarkets typically 1,000 sq ft to
2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft.
having a strong focus on food & grocery and personal sales.

Department Stores

Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer
needs. Further classified into localized departments such as clothing, toys, home,
groceries, etc. products catering to all basic needs to luxurious items as well.
Departmental Stores are expected to take over the apparel business from exclusive
brand showrooms. Among these, the biggest success is K Raheja's Shoppers Stop,
which started in Mumbai and now has more than seven large stores (over 30,000
sq. ft) across India and even has its own in store brand for clothes called Stop.

50
Specialty Stores

Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer
Crossword, RPG's Music World and the Times Group's music chain Planet M, are
focusing on specific market segments and have established themselves strongly in
their sectors.

Discount Stores

As the name suggests, discount stores or factory outlets, offer discounts on the
MRP through selling in bulk reaching economies of scale or excess stock left over
at the season. The product category can range from a variety of perishable/ non-
perishable goods.

Convenience Stores

These are relatively small stores 400-2,000 sq. feet located near residential areas.
They stock a limited range of high-turnover convenience products and are usually
open for extended periods during the day, seven days a week. Prices are slightly
higher due to the convenience premium

MBO’s

Multi Brand outlets, also known as Category Killers, offer several brands across a
single product category. These usually do well in busy market places and Metros.

Trade parks

Trade parks are basically business complexes that promote international trade. The
global players here have access to the top Indian exporters. To the buyers this
would prove to be a boon since they do not have travel to far off towns to enter into
business deals with the exporters, especially in places where infrastructure is very

51
poor. By this the exporters not only enhance their visibility but they also enjoy a
host of other advantages. They can design libraries, studio etc, in order to attract
potential customers.

Forecourt Retailing

This type of retailing is done by the oil companies in order to increase their
revenue. They not only deliver fuel but also offer other services to its customers.

52
Retailing in India is witnessing a huge revamping exercise as can be seen in the
graph

• India is rated the fifth most attractive emerging retail market: a potential
goldmine.

• Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade)
makes up 3 percent or US$ 6.4 billion

• As per a report by KPMG the annual growth of department stores is estimated at

24%

• Ranked second in a Global Retail Development Index of 30 developing countries

drawn up by AT Kearney.

Multiple drivers leading to a consumption boom:

Favorable demographics Raising aspirations : Value added goods sales.

Growth in income Increasing population of women

• Food and apparel retailing key drivers of growth

• Organized retailing in India has been largely an urban phenomenon with affluent
classes and growing number of double-income households.

• More successful in cities in the south and west of India. Reasons range from
differences in consumer buying behavior to cost of real estate and taxation laws
.
• Rural markets emerging as a huge opportunity for retailers reflected in the share
of the rural market across most categories of consumption

– ITC is experimenting with retailing through its e-Choupal and Choupal Sagar –
rural hypermarkets.

53
 – HLL is using its Project Shakti initiative – leveraging women self-help groups –
to explore the rural market.
– Mahamaza is leveraging technology and network marketing concepts to act as an
aggregator and serve the rural markets.

• IT is a tool that has been used by retailers ranging from Amazon.com to eBay to
radically change buying behavior across the globe.

• ‘e-tailing’ slowly making its presence felt.

• Companies using their own web portal or tie-sups with horizontal players like
Rediff.com and Indiatimes.com to offer products on the web.
FACTS OF THE AGRA XYZ STORE:

STORE NAME: XYZ MEGA MART AGRA-2

537-38, NEAR TULSI TALKIES
BHAGWAN TALKIES CROSSING,
ADDRESS: AGRA DELHI HIGHWAY

REGION: R2(U.P)

ZONE: NORTH
TOTAL SERVICE
AREA: 2000
TOTAL RETAIL
AREA: 20077
AREA OF THE
STORE: 22077
NUMBER OF
FLOORS: 2 (GROUND FLOOR,1ST FLOOR,.)

54
NO. OF GANDOLAS: 478

OPENING DAYS: 7
SHWROOM
TIMINGS: 10:00am TO 10:00pm

TOTAL SKU 20540 (11290 + 9250 own brands )

TOTAL STAFF
STRENGHT: 75(70+5 LPO)

55
 RESEARCH METHODOLOGY

Type of research : Descriptive research

Sampling technique : Restricted random sampling

Size of the sample : 250

Universe All customers of store

Type of data : Primary data

Data collection instrument Questionnaire method

Data analysis tech Quantitative

Sources & statistical analysis Through chart & table

56
57
Q1. How frequently you visit XYZ Mega Marts?

a) More than once in a week

b) Once in a week

c)Once in a month

d) Not estimated

More than
Once in a Once in a Not
once in a
week month estimated
week

No. of
Respondent 13 81 54 102
s

58
Interpretation: This question was designed in order to study the buying
pattern of the consumers. The findings showed that 40.8% consumers most of them are
not random in their buying. Although there are 32.4% & 21.6% people who visit XYZ
Mega Mart once in a week and month respectively. We can say around half of the
buying in XYZ Mega Mart is frequent & random and the rest is vice-versa.

59
Q2. Which type of retail outlet would you prefer for
shopping?

a) Mom & pop shops

b) Retail as separate outlet
c) Shopping malls
d) Anyone of them

Retail as
Mom & pop Shopping Anyone of
separate
shops malls them
outlet
No. of 00 59 124 67
Respondents

60
Interpretation: This question was asked in order to know the preference
of the consumers among the various available options. The findings were quite
surprising that none of them prefer Mom & pop shops, although 26.8% people are
ready to choose anyone of them. This shows the increased attraction towards complete
shopping experience which consumers get in shopping malls.

61
Q3. How deep is your attachment with XYZ Mega Marts?

a) Loyal

b) Loyal to some extent (first choice)

c) Depends upon the requirements and convenience

d) Disloyal

Loyal Loyal to Depends Disloyal

some extent upon the
requirements
&
convenience

No. of 18 76 156 00
Respondent
s

62
Interpretation: This is a very important question due to the fact that it not
only shows the level and pattern of attachment but also the level of satisfaction of
consumers. The results showed that a large no. of respondents (62.4%) keep their
options open and decide according to their requirements and convenience. Although
lots of people (30.4%) find themselves loyal to some extent and 7.2 % are loyal.

We can say that overall consumer behavior is inclined towards loyalty depending upon
our ability to provide complete range, quality, service and convenience.

Q4. Level of satisfaction in XYZ Mega Mart from –

1) Ambience :

a)

Very Good

b)

Good

c)

Average

d)

Poor

Very Good Good Average Poor

No. of
04 79 149 18
Respondents

63
Interpretation: Findings show that from the ambience of XYZ Mega Mart
the level of satisfaction of 59.6% consumers is average & of 31.6% consumers is good.
Only 1.6% customers are well satisfied & 7.2% are unsatisfied also. Ambience is
having extremely important role to visit the retail outlet & willingness to buy products.

64
 2) Customer Dealing :

a) Very good
b) Good
c) Average
d) Poor

Very Good Good Average Poor

No. of
14 76 157 03
Respondents

Interpretation: Customer dealing is a very crucial factor behind success

of any retail outlet & in this question their level of satisfaction from customer dealing

65
shows that some of them (36%) are satisfied up to some extent, nevertheless most of
them (64%) are not properly dealed by sales executives of XYZ Mega Mart.

66
 3) Product Quality :

a) Very good
b) Good
c) Average
d) Poor

Very Good Good Average Poor

No. of
16 173 61 00
Respondents

Interpretation: Quality of product is as important factor for any business

as blood for human life & he findings shows that most of the consumers are satisfied by
the quality aspect of XYZ Mega Mart.

67
 4) Schemes :

a) Very good
b) Good
c) Average
d) Poor

Very Good Good Average Poor

No. of
83 71 96 00
Respondents

Interpretation: It can not be neglected that schemes help to increase

footfalls & sales in any retail outlet. & this is good that XYZ Mega Mart provide different-
different schemes to their customers always & most of its customers are satisfied from
it.

68
 5) After Sales service :

a) Very good
b) Good
c) Average
d) Poor

Very Good Good Average Poor

No. of
48 163 39 00
Respondents

Interpretation: Results are quite favorable for XYZ Mega Mart. Most of
the customers are satisfied by their after sales services, which influence them to visi the
store again. We can say that after sales services play a complementary role in decision
making process as they play very influential role in evaluating various retail stores.

69
 6) Security Measures :

a) Very good
b) Good
c) Average
d) Poor

Very Good Good Average Poor

No. of
57 132 61 00
Respondents

Interpretation: Results show that security measures of XYZ Mega Mart

are also in a good position, which make mind of consumers free of tension & they can
do their shopping easily & more comfortably.

Q5. To locate your preferred product in XYZ Mega Mart is

70
 a) Very easy

b) Easy

c)A little bit tough

d) Tough

Very easy Easy A little bit Tough

tough

No. of 42 106 84 18
Respondent
s

71
Interpretation: Findings show that approx. 50% of the respondents can
locate their preferred product easily,but in the other hand half of the respondents are
not comfortable to locate easily,which shows executive’s inefficiency in Display & Visual
Merchandising. So, Availability of products are also very important point,which should
be kept in mind by retailers.

Q6. Do you purchase the in store brand’s products of XYZ

Mega Mart in Food mart section?

a) Always
b) Mostly
c) Sometimes
d) No

Always Mostly Sometimes No

No. of
Respondent 08 46 129 67
s

72
Interpretation: Results show that there are very few customers, who
purchase the XYZ in store brand’s products in food mart section, which is not the
favorable condition for XYZ Mega Mart.

73
Q7. If no, what’s the reason?

a) Quality
b) Price
c) Brand Loyalty
d) Awareness

Brand
Quality Price Awareness
Loyalty
No. of
Respondent 04 00 14 49
s

74
Interpretation: This question is designed to know why customers are
not interested in XYZ in store brand’s product ? & the result is quite surprising that
73.13% of them are unknown to their in store brand’s products.

Q8. Would you prefer home delivery services if XYZ Mega Mart offers ?

a) Yes
b) Somewhere
c) Can’t say now
d) No

Somewhe Can’t say

Yes No
re now
No. of
Respondent 43 189 18 00
s

75
Interpretation: This question was asked in order to forecast the future of
“Home delivery services”, if XYZ Mega Mart provides it to its customers & the results
proved that large no. of people (93.2%) are willing to use this service in future according
to their convenience.

76
Q9. Do facilities like Fun stations, Play stations, Junk food stalls, PVRs attract
you to go to any mall or retail store ?

a) Yes
b) No
c) Doesn’t matter
d) Can’t say

Doesn’t
Yes No Can’t say
matter
No. of
Respondent 153 36 61 00
s

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Interpretation: For most of the respondents (61.2%) facilities like
Fun stations, Play stations, Junk food stalls, PVRs affect positively
their choice of retail outlet or mall. Definitely this denotes the importance of
these facilities as it is the driving force for most of the respondents and people want a
complete shopping experience.

Q10. How you grade XYZ Mega Mart as a big retail chain ?

a) The best
b) Better
c) Good
d) Bad
e) worst

The
Better Good Bad Worst
best
No. of
Responde 00 43 207 00 00
nts

78
Interpretation: T& Finally this question was asked in order to identify the
level of grading of XYZ Mega Mart by its customers in comparison to other retail chains.

& the result shows that most of the respondents (82.8%) are giving it good position,
which is only one step greater than bad & according to very few respondents (17.2%) it
is better than other retail chains.

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80
SUGGESTIONS

• First of all, XYZ Mega Mart should provide Fun stations, Play stations,
Junk food stalls etc. to its consumers that they could get a complete
shopping experience, what they actually want.

• It should start some customer loyalty programs for its regular customers.

For instance : If a customer does a shopping of 1000,he’ll get 10% discount

on next purchasing or, there may be lucky draw, gift coupons etc. for them.

• The next effort should be to make some investment in improving the

interiors of their respective establishments to make shopping an enjoyable
experience for the customer.

• Sales executives should be trained properly about how to deal with

customers, proper Display of products & Visual Merchandising, Colour
Blocking, so that customers could easily locate their preferred products.

• It should use different kind of Sales Promotion Tools to make aware to its
customers about their in store brand’s products.

• It should start home delivery services on the order of more than 5000 Rs.

• It should provide more hygienic and attractive environment &

ambience to its customers.

• As its target segment is lower-middle income group, but nowadays it should

target the middle & middle-upper income group also due to more chances of
profit from them.

81
• The message, therefore, for the XYZ Mega Marts is to closely examine what
changes are taking place in their immediate vicinity, and analyse whether
their current market offers a potential redevelopment of the area into a more
modern multi-option destination.

• It also needs to make substantial investments in understanding/acquiring

some advanced expertise in developing more accurate and scientific demand
forecasting models.

82
 CONCLUSIONS

1) From the above research done on the trends of Indian

retail industry, following conclusion will be drawn:-

 Indian retail industry has metamorphosed from kirana’s

(pop and mom stores) to big space super markets.

83
  The unorganized retailing has overtaken by the organized
retailing though the share of organized retailing is very
less in current scenario.

 Organized retailing is mostly seen in urban areas due to

more disposable income of this population.

 Now the format of retailing has changed a lot to give

more buying experience to consumers.

 Indians prefer to shop at modern trade (super markets,

hypermarket etc.) due to higher standards of hygiene and
attractive ambience.

 Changes in lifestyle – demand for “global” trends have

given thrust on the growth of specialty shops etc.

 Consumer durables are another promising sector

because, with increasing purchasing power, consumers
tend to spend the most on this category.

 As government is continuing its plans to liberalize FDI in

the retail sector in India, foreign companies like Wal-Mart
are waiting on the threshold.

 Malls have mushroomed in various locations and they

become the centre’s of entertainment for the new
generation.

 Rural markets emerging as a huge opportunity for

retailers reflected in the share of the rural market across
most categories of consumption.

2) On the basis of the study of consumer behavior of XYZ

Mega Mart, it can be safely concluded that various factors

84
affect buying behavior of retail consumers differently at
different levels. These factors have to be taken in
consideration while deciding and targeting the consumers. If
the XYZ Mega Mart focuses and targets on recent trends of
Indian Retail Industry priority wise, definitely the outcome
will be very favorable for them. The conclusions drawn from
the study of their consumer behavior is as follows:

 Today customers want a complete shopping experience

rather than only to go & purchase the products & to get
this shopping experience they prefer to go to malls or
those retail chains, which provide it to them.

 Some of the consumers of XYZ Mega Mart are loyal

towards it,but loyalty of most of them depends on their
requirements & convenience.

 Their level of satisfaction from –

• Ambience : Average

• Customer dealing : Good & Average

• Product quality : Good

• Schemes : Very good, Good & Average

• After sales services : Good

• Security measures : Good

 Some of its customers are able to locate their preferred

product easily, but some of get it tough too, which

85
 shows the inefficiency in display & Visual Merchandising
of their employee.

 The survey shows that there are many of the customers,

who are unaware of their in store brand’s products in
food mart section.

 A very large no. of consumers are willing to use home

delivery services in future, if XYZ Mega Mart provides it
to its consumers.

 Fun stations, Play stations, Food junctions, PVRs etc. are

some of those factors, whish provides the customers a
complete shopping experience.

86
87
 LIMITATIONS

 The reliability always depends upon the responses of respondents how

sincerely they have given answer.

 Constraint of time and resources limited the scope of study.

88
BIBLIOGRAPHY

89
BOOKS

 RESEARCH METHODOLOGY by C. R. Kothari

 INDIAN RETAIL SECTOR:A Primer by Mehrotra, Nitin

 RETAIL INDUSTRY :SHANGING TRENDS by Kesksr, Dhananjay.

LINK:

 www.XYZmegamart.net

 www.imagesretail.com

 www.indiaretailbiz.com

 www.india-reports.com

 www.business.mapsofindia.com

 www.retailindustry.about.com

 www.marketresearch.com

90
91
 ANNEXURE

Dear Sir/Madam,

I, Pushpesh Kumar, student of PGDM-Retail Management, 2nd

semester at School of Management Sciences, Varanasi. As a part
of our curriculum, we are required to do a primary data based
field survey. You are kindly requested to cooperate by filling up
the questionnaire. Let me assure you that the survey is purely
academic in nature. The data provided by you and findings will

not be disclosed to outsiders.

Personal Details

Name : Age :

Gender : Occupation :

Address : Contact number :

92
 QUESTIONNAIRE

Dear Sir/Madam,

Q1. How frequently you visit XYZ Mega Marts?

a) More than once in a week

b) Once in a week

c) Once in a month

d) Not estimated

Q2. Which type of retail outlet would you prefer for

shopping?

a) Mom & pop shops

b) Retail as separate outlet
c) Shopping malls
d) Anyone of them
Q3. How deep is your attachment with XYZ Mega Marts?

a) Loyal

b) Loyal to some extent (first choice)

c) Depends upon the requirements and convenience

d) Disloyal

93
Q4. Level of satisfaction in XYZ Mega Mart from –

Very good Good Average Poor

1) Ambience

2) Customer
Dealing
3) Product
Quality
4) Schemes

5) After
Sales
Services
6) Security
Measur
es

Q5. To locate your preferred product in XYZ Mega Mart is

a) Very easy

b) Easy

c)A little bit tough

d) Tough

94
Q6. Do you purchase the in store brand’s products of XYZ
Mega Mart in Foodmart section?

a) Always
b) Mostly
c) Sometimes
d) No
Q7. If no, what’s the reason?

a) Quality
b) Price
c) Brand Loyalty
d) Awareness

Q8. Would you prefer home delivery services if XYZ Mega Mart offers ?

a) Yes
b) Somewhere
c) Can’t say now
d) No

Q9. Do facilities like Fun stations, Play stations, Junk food stalls, PVRs attract
you to go to any mall or retail store ?

a) Yes
b) No
c) Doesn’t matter
d) Can’t say

95
Q10. How you grade XYZ Mega Mart as a big retail chain ?

a) The best
b) Better
c) Good
d) Bad
e) worst

96