1. Cash and Carry format facing the brunt of the protestsThe retail battle has shifted to the cash and carry format, as anti-FDI organizations are protesting that international retail chains are using the cash and carry route to enter the retail sector of India and are circumventing the rules. The campaign has been organized by the Federation of Association of Maharashtra (FAM), Acorn-India FDI Watch campaign and the Confederation of All India Traders (CAIT) and has already got support from several leaders in the government such as Priya Ranjan Das Mushi and Meira Kumar.
The cash and carry format was opened for 100% foreign investment in 2000, when there had been a lot of interest shown in the Indian consumer. Metro of Germany was the first international company to receive permission to enter the country on this format in 2003, followed by Shoprite a South African chain in 2006.
Wednesday, May 02, 2007
Source: The Economic Times
2. One million people required in organized retailThe Retailers Association of India (RAI) said that for the organized retail sector to grow, it needs one million people in the next ten years. The current size of the retail sector is Rs. 9300 billion, of which the organized retail sector accounts for only Rs. 350 billion. The bulk of the retail sector consists of fragmented shops, owned by small independent owners who manage the shops themselves. Gibson Vedamani, CEO of RAI, said that the retail sector would require professional across all levels.
Wednesday, May 02, 2007
Source: The Economic Times
3. Wal-Mart: Small retailers are here to stayWal-Mart is reiterating that the company’s plans to enter India are in compliance with the current FDI regulations, and that the company will only be conducting business via the cash-and-carry format, as required by the law. According to Raj Jain, president of emerging markets for Wal-Mart, “We are not doing retail in India because that’s not permitted by law. We are planning to enter into the cash-and-carry business. We have spoken to planners and influencers and they have all said that what Wal-Mart was planning in India was good.”
The company will be hiring over 1,000 people for its cash-and-carry format in the next 2-3 years. There will be 5-10 stores opening in the next 2-3 years under a new name that will be announced in the coming weeks. This venture will be owned equally with Bharti Enterprises.
Its second venture will be 100% owned by Wal-Mart and will pertain to vendor management and providing support and inputs to vendors, to raise their standards up to the international level. Wal-Mart will also assist Bharti in setting up the infrastructure for distribution and logistics for the cash-and-carry stores.
Thursday, May 03, 2007
Source: The Economic Times
4. Retail heats up electionsThe heat on the retail sector is being stated as the reason for the loss of the Congress party in Delhi. Local traders and retailers had banded together to oppose the Congress because of their anti-sealing drive. The entry of Wal-Mart has further antagonized the local retailers and the Congress is wary of raising any issue related to retail ahead of the general elections.
Bharti’s tie up with Wal-Mart has kicked off lots of protests and although the company is permitted to use the US retail giant’s name on its retail format, the message from the government is to avoid using the Wal-Mart name, so that there is less opposition from other parties as well as traders.
Thursday, May 03, 2007
Source: The Economic Times
5. Local stores get proactive to compete with the big guns of retailLocal stores have started offering competitive rates to compete with the organized retailers. Where at one time, no kirana store sold a product for less than the Maximum Retail Price (MRP), now they offer lots of schemes and discount plans just as the larger retailers do. Some small retailers are also aligning themselves with certain companies such as Hindustan Lever, Proctor & Gamble to become preferred suppliers for them.
Due to stiff competition, kirana stores are finally waking up to become competitive and try to attract consumers. While earlier they had a captive audience, now consumers have so many choices, that unless local stores offer them some competitive advantage, they will get sidelined. Saturday.
May 05, 2007
Source: The Economic Times
1. Shoppers’ Stop nets Rs. 262 million profit in Q4Shoppers’ Stop reported a net profit of Rs. 262 million for the fourth quarter, a slight decrease from its figure of Rs. 271 million for the corresponding quarter last year. BS Nagesh, Shoppers’ Stop managing director said that, "The results are not comparable as the company re-estimated the useful life of certain classes of assets, resulting in higher depreciation charge by Rs. 10.11 crore (Rs. 101.1 million) during the quarter."
Monday, April 30, 2007
Source: The Economic Times
2. Pantaloon plans to open KB’s Wholesale MarketsPantaloon Retail will be opening KB’s Wholesale Markets in the rural markets, to sell a range of items, including fresh fruits and vegetables. According to Arvind Chaudhary, CEO Foods for Pantaloon Retail, "There are bottlenecks in the supply chain in hinterland which makes transportation of fresh fruits and vegetables expensive." The stores are to be launched by the end of the current financial year. The first of these wholesale markets will come up in Burdwan in West Bengal and Mathura in Uttar Pradesh.
Monday, April 30, 2007
Source: The Economic Times
3. Birla’s retail venture to start in JuneAditya Birla Retail will be formally launching its Rs. 400 billion retail venture in June, after having finalized its key people. The first store is to be opened in Pune in June. The company will be focusing only on select formats of supermarkets, hypermarkets and apparel. The company had also purchased Trinethra for Rs. 1.5 billion to get a head start on its food and grocery business.
At the helm is Russell Berman who is the head of operations and has worked with Carrefour, Chinese retail chain Lian Hua, and French retail chain Auchan. Another high profile joinee is Peter Denby, who was earlier with Sainsbury’s and will be looking after the supermarket division of the company. Juzar Mastan will look after the supply chain and logistics division. Sumant Sinha, the COO of the AV Birla Group and the CEO-designate will be the overall head of the company.
Tuesday, May 01, 2007
Source: The Economic Times
4. Wal-Mart, Bharti tie up to be formalized in two weeksThe much-anticipated deal between Wal-Mart and Bharti is to be finalized in the next two weeks. The first cash-and-carry store will be opened by the middle of 2008. According to Raj Jain, President of emerging markets for Wal-Mart, "We are in negotiations with Bharti and close to signing an agreement... we will announce details of the joint venture in a couple of weeks."
Wednesday, May 02, 2007
Source: The Economic Times
5. Wal-Mart to focus on low pricesLow prices are Wal-Mart’s forte and the company will stick to it for operations in India as well. For its 50:50 JV with Bharti Enterprises, the company will be offering 25% lower prices than other wholesalers. The formal agreement is to be signed between the two companies and their first store will open in middle of 2008 and will eventually expand to stores in 75 cities over the next 5-7 years.
According to Raj Jain, president of emerging markets for Wal-Mart, the company will reduce costs by managing supply chain efficiencies and localizing operations, with as much as 50% of products being sourced by local sources and 40% being sourced from under 100 kms away.
Wal-Mart is also keen on partnering with real estate developers to house wholesale stores. Reportedly the company has found real estate prices in India a challenge, the low cost of labor and operating margins are a plus.
Thursday, May 03, 2007
Source: Reuters, Business Standard
6. Birla Retail likely to drop Trinethra brand nameAditya Birla Retail will be opening stores by the end of the year and is likely to rename the Trinethra stores that it purchased earlier this year, so that all of its stores have a cohesive branding. Trinethra has been using its name in Andhra Pradesh and Tamil Nadu and the Fabmall brand name in Kerala and Karnataka. The new brand name is being used for Trinethra, so that consumers will associate it with the value and quality of the Birla name.
Thursday, May 03, 2007
Source: Business Standard
7. Reliance keen on taking over CWC warehousesReliance Industries is keen on using the Central Warehousing Corporation warehouses that are owned by the government for its retail venture. The company has already signed a deal to lease 2 million sq t of space from CWC and wants another 2 million sq ft of space.
7. Reliance keen on taking over CWC warehousesReliance Industries is keen on using the Central Warehousing Corporation warehouses that are owned by the government for its retail venture. The company has already signed a deal to lease 2 million sq t of space from CWC and wants another 2 million sq ft of space.
Friday, May 04, 2007
Source: The Economic Times
8. Wal-Mart to get fee from Bharti Wal-Mart will be earning a liscencee fee for using the Wal-Mart name from Bharti. According to the Economic Times, Bharti is likely to pay as much as 2% of its revenues as wholesale trading margin to Wal-Mart, along with a royalty of 2% as well. According to Raj Jain, CEO of emerging markets for Wal-Mart, “Bharti is likely to source technology and know-how from Wal-Mart for its front-end operations and pay royalty for them, apart from sourcing goods from the cash & carry joint venture.”
Friday, May 04, 2007
Source: The Economic Times
9. Wal-Mart attracts small women owned businesses for development ventureThe US retail giant is planning to initiate a supplier development program in India, by launching a private equity fund aimed at small businesses and women-owned ventures. While the size of the fund has yet to be finalized, sources suggest that it will follow the company’s global strategy. Beth Keck, senor director of international corporate affairs, said that, “These programmes are targeted at women, small farmers and other groups that may not have ready access to organised retailers and these initiatives have been very important in bringing local products into our stores.”
Saturday, May 05, 2007
Source: The Economic Times
1. Starbucks applies again for permission to come to IndiaStarbucks has applied to the Foreign Investment Promotion Board (FIPB) again so that it may open stores in India. Its earlier application was rejected by FIPB due to “lack of clarity on the foreign shareholding structure”. A spokesperson for Starbucks said "After working closely with the Ministry of Commerce and Industry to better understand the existing foreign investment regulations, Starbucks submitted a revised application on April 13 to operate single-brand retail stores in India with a restructured entity."
The company had previously applied as a joint venture with Starbucks holding 51% stake, while the remaining 49% was to be held by the Future Group and Starbucks’ Indonesian venture’s franchise owner. Starbucks is planning to open 100 outlets by early next year, in cities such as Delhi and Mumbai.
Tuesday, May 02, 2007
Source: The Economic Times
2. Ikea keen on opening in IndiaThe world’s largest furniture retailer, Ikea has established an office in Gurgaon for market research and is holding talks with domestic companies to open stores in India. Sources say that the company will be keen to open in India in 2009, although the company has itself not confirmed anything. On their India plans, Ikea’s group president and CEO Anders Dahlvig said, “We will be there eventually, I’m sure. It is a question of how and when. I think it will mostly depend on things like legislation and infrastructure development.” Tuesday, May 01, 2007
Source: The Economic Times
3. Seiko looks for JV partnerJapanese watch company Seiko is looking for a joint venture partner to tie up with using the single brand format. The company is still deciding how to launch its own operations in India, but has planned to open in the top 8-10 cities and is aiming for a “double-digit” share of the watch market in India by 2010.
Tuesday, May 01, 2007
Source: The Economic Times
4. Pantaloons and Etam form agreementPantaloon Retail and Etam, a leading France based retailer of lingerie, have tied up in a 50:50 partnership to open stores. The products will be sold under the ETAM Future Fashion Pvt. Ltd brand. The French company will be opening 40 stores in 20 cities with an investment of Rs. 900 million. At the press conference announcing the joint venture, Elisabeth Cunin, CEO of Etam Lingerie said that the company has “aggressive expansions plans” for India.
4. Pantaloons and Etam form agreementPantaloon Retail and Etam, a leading France based retailer of lingerie, have tied up in a 50:50 partnership to open stores. The products will be sold under the ETAM Future Fashion Pvt. Ltd brand. The French company will be opening 40 stores in 20 cities with an investment of Rs. 900 million. At the press conference announcing the joint venture, Elisabeth Cunin, CEO of Etam Lingerie said that the company has “aggressive expansions plans” for India.
Friday, May 04, 2007
Source: The Economic Times
1. RPG makes retail plans for OrissaThe RPG Group is focusing on Orissa for its retail expansion and will be investing Rs. 2 billion in the state to set up retail chains in the next 1-2 years. The company is planning to open 25-30 stores in the state, including supermarkets, hypermarkets and convenience stores.
Thursday, May 03, 2007
Source: Business Standard
Support Industries:
1. Pantaloon and Yash Raj Films tie up for merchandisingPantaloon Retail and Yash Raj Films have tied up to promote the film “Ta Ra Rum Pum”, with Pantaloon having created a special merchandise theme in several categories, including apparel, accessories, toys, stationery etc. This special merchandise will be available in all if its stores till May 15th.
Tuesday, May 01, 2007
Source: The Economic Times
1. Retail boom translates to increased retail courses in business schoolsAs the number of shops and malls increase, the need for talented manpower is rising, leading to business schools increasing their offerings on retail. The Indian Institute of Social Welfare and Business Management (IISWBM) had earlier tied up with Pantaloon Retail for a two-year retail management program and now NSHM has recently tied up with RAI for postgraduate programs in retail management.
According to Krishnendu Sarker, head of learning systems at NHSM, the 18-month residential programme is targeted at the high end of students and entrance will be conducted on a national level, similar to the CAT.
Thursday, May 03, 2007
Source: Telegraph India
2. HR is the name of the gameThe retail sector is dependent on its manpower, and its short supply is leading to companies taking strong steps to retain as well as attract talent. Reliance Retail, for example, has hired 15 people who visit other stores to size up the sales staff and make them on-the-spot offers. Spinach took an even more interesting approach and has hired 100 vegetable and fruit vendors from the street and has given them Rs. 6,000 per month along with benefits such as medical insurance, PF and insurance.
According to Arvind Singhal, chairman of Technopak Advisors, “Education, language no bar. Retailing will create just the kind of jobs India’s unemployed and poor needs.” It is being said that retailing will change the fate of India’s poor in the same way that BPOs changed the fate of the middle class.
Saturday, May 05, 2007
Source: The Economic Times
Apparel & Footwear:
1. Prateek Apparels to introduce international brandsPhulchand Group of Companies, Prateek Apparels will be bringing in 3 international lifestyle brands. The company will be targeting metro cities and will open 11 exclusive stores ranging from 30,000-70,000 sq ft of space. The company will also be launching Prateek Lifestyle as a separate subsidiary. The company provides garments to companies such as Westside, ITC Wills, Benetton, Provogue, Pantaloon, Spykar, Levi’s, Dockers, Allen Solly, Peter England, Van Heusen, Arrow, Weekender, Shoppers’ Stop and many more.
Thursday, May 03, 2007
Source: Business Standard
2. Cottons by Century bets on formal wearBK Birla’s brand Cottons by Century is looking for its formal wear to drive sales in the ongoing financial year. According to Mahendra Padhy, marketing head for Cottons by Century, the company’s new range of apparel will increase sales in the formal wear segment. In recent years, men’s wear accounted from 60% of the company’s sales.
2. Cottons by Century bets on formal wearBK Birla’s brand Cottons by Century is looking for its formal wear to drive sales in the ongoing financial year. According to Mahendra Padhy, marketing head for Cottons by Century, the company’s new range of apparel will increase sales in the formal wear segment. In recent years, men’s wear accounted from 60% of the company’s sales.
The company has made plans to open 100 franchisee stores in 40-50 cities, with the main thrust on tier III cites. Metro and tier II cities are being targeted fro their exclusive stores. Their core customer is between the ages of 25-45 and is both fashion conscious and value conscious.
Friday, May 04, 2007
Source: Business Standard
Home Furnishings:
1. Godrej Lifespace to expand its presenceThe retail division of Godrej & Boyce, Godrej Lifespace has made plans to increase its stores from 49 to 100 by the year 2010, with an investment of Rs. 200 million. The company will also be investing Rs. 500 million on advertising and promotions and Rs. 100 million on developing talent. Besides home and office furniture, home appliances, and accessories, the company will also be adding newer product categories to its range.
At present the company has stores in 25 cities, for a total of 49 stores. New stores will be opening in Andhra Pradesh in cities such as Vijaywada, Vishakapatnam and Hyderabad, which is one of their most successful and profitable centers.
Monday, April 30, 2007
Source: The Economic Times
Consumer Durables:
1. Samsung ties up with larger retailersConsumer electronics major from South Korea, Samsung is aggressively teaming with larger retailers such as Reliance Digital, Croma, Future Group, Metro Cash & Carry and HyperCITY to increase its topline growth. The company plans to earn 10-12% of its turnover from the large format retail channel.
According to Pradeep Tognatta, director of sales for Samsung India Electronics, “We have decided to partner with the large format retail chains. We’ve tied up with top retailers, some of them specialise purely in electronics. There are more tie-ups in the offing. We are using the specialised stores to create a complete brand experience — creating LCD walls and putting up special displays for certain focus categories.”
Samsung will also be tying up with Kuwait based Kirby to set up stores in Noida and Gurgaon. There are also plans to tie up with Dubai based Jumbo Group to set up stores in Delhi and the surrounding areas.
Saturday, May 05, 2007
Source: The Economic Times
Food & Grocery:
1. Reliance Fresh adds groceriesReliance will add groceries to its stores, rather than just selling fruit and vegetables. According to Gunender Kapur, president and chief executive of Reliance Retail’s food business, “We are looking at changing the product mix in our stores. We are learning with time and constantly evolving. We find that some categories aren’t selling up to expectations. We would replace those with other items.” The company will be reducing or completely replacing products that are not selling well in their stores. The sales of fruit and vegetables have been declining at their stores and the company is making an effort to increase the bill size that has stagnated at Rs. 120-130.
The average bill size at Subhiksha is usually around Rs. 300-320, and the company has a 60:40 product mix tilted towards grocery. The high cost of wastage in fresh fruits and grocery is what is making Reliance change its stores. Reliance is still sourcing fresh fruit and vegetables from the mandi as yet, since it’s own farm to fork initiative has not yet started.
Wednesday, May 02, 2007
Source: The Economic Times
Pharma:
1. Wal-Mart might source generic drugs from IndiaWal-Mart is reportedly in talks with several top pharma companies to source generic drugs directly from them for their stores globally. Industry sources report that companies such as Ranbaxy, Dr. Reddy’s Labs (DRL), Cipla, Lupin, Sun Pharma and several other small to mid-sized firms based in Bangalore, Chennai and Hyderabad are holding talks with Wal-Mart.
Tuesday, May 01, 2007
Source: The Economic Times
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