This presentation is not made by me. Found it knowledgeable so uploading it for others use.

1. FOOD RETAILING

2. WHAT IS RETAILING?
• Retailing – a set of business activities that
adds value to the products and services sold
to consumers for their personal or family use.
• A retailer is a business that sells products
and/or services to consumers for personal or
family use.

3. RETAILING IN INDIA
• Emergence of modern retail formats
• Increased pressure on opening up FDI in retail sector
• Rapid Evolution of New-age Young Indian Consumers
• Rapidly increasing middle class
• Rising Incomes levels
• Increased Awareness Level among Consumers
• Exposure to International Brands
• Retail Space is no more a constraint for growth

4. INDIAN RETAIL SCENARIO
• Total Private Consumption Expenditure in India – 375 Billion
USD
• Retail Sale – 205 Billion USD (55%)
• Organized Retail – 6.2 Billion USD (3%)
• Retailing – 35% of GDP
• Outlet Estimates – Over 12 Million
• Format – Only 4% larger than 500 sq.ft.
• Second Largest Employer after Agriculture

5. THE RETAIL LIFE CYCLE
SALES
Maturity
Decline
Growth Profit
Innovation
TIME

6. CLASSIFICATION OF RETAIL STORES
Classification of Retail Stores
Store Based Retailing Non-Store Retailing
Form of Ownership Merchandise offered Direct selling
Independent retailer Convenience stores Mail order
Chain retailer Supermarkets Tele marketing
Franchise Hypermarkets Automated Vending
Leased departments Speciality stores
Consumer co-operatives Departmental stores
Off price retailers
Factory outlets
Catalogue showrooms

7. RETAILING FORMATS IN INDIA
• Malls
• Specialty Stores
• Discount Stores
• Department Stores
• Hypermarts/Supermarkets
• Convenience Stores
• MBO’s

8. ORGANIZED RETAIL
• The Indian organized retail industry is valued at about $300
billion and is expected to grow to $427 billion in 2010 and $637
billion in 2015.
• Retail Market India today is the second fastest growing economy
of the world after China.
• In organised retail the front liners like shop floor
executives, sales executives etc are in great demand.
• Organised trade in India is highly under-developed as compared
with other emerging markets in Asia, Latin America and Eastern
Europe and developed markets like the US.

9. ORGANISED RETAIL MARKET IN INDIA
(Rs. Cr.)

10. FOOD RETAILING
• Food retailing has come of age –
Food items were sold in small road side grocer shops &
mandis, now being sold through supermarket stores.
• Shopping for groceries is no longer a strenuous and
uncomfortable affair.
• Food & beverages is the major segment, in organized Retail of
India, worth Rs 8,97,000 crore.
• Food retail has surpassed the dominating apparel and
accessories sector.
• From simple trading activity, food retailing is now heading to
the status of an industry.

11. SOME FACTS ABOUT FOOD RETAILING IN
INDIA
• Food Retailing is growing at 30% rate which makes it a major
driving force of the economy.
• At US$ 175 billion today the food industry is likely to grow to US$
400 billion by 2025.
• Modern state of the food retailing is not a demand led but the
supply led one.
• Food has the largest consumption in the Indian economy and will
remain the single largest category.
• There are 10 million street vendors in India, of which 6 million
only sell food.
• Indian consumers are happy with store goods than branded
goods.

12. FACTORS PAVING THE WAY TO
REVOLUTIONIZING FOOD RETAILING IN INDIA
• Changing life styles and tastes
• Growing need for convenience
• Increasing disposable income
• Increasing numbers of working women
• Change in consumption patterns
• Higher aspirations among youth
• Impact of western lifestyle
• Plastic Revolution – Increased use of credit cards and
debit cards

13. ORGANIZED FOOD RETAIL CHAIN

14. UP-AND-COMING FOOD RETAIL
FORMATS
• Neighbourhood Stores
In India about 90% of food purchases are made within a distance
of 1.5 km from the customer's home. The outlets closest to a
neighbourhood store in India are 'Safal' outlets operated by
Mother Dairy in Delhi, Margin Free in Kerala and Subhiksha.
• Supermarkets:
This format caters to the consumers' need for choice and variety.
These stores cater to the consumers in a catchment area with a
radius of 3 to 4 km. Examples of supermarkets already in India
are Food World, Trinetra and Nilgiris.

15. UP-AND-COMING FOOD RETAIL
FORMATS
• Hypermarkets: Hypermarkets are essentially destination stores
catering to the consumers' bulk shopping needs in both food and
non-food categories. Spencer’s (RPG), Big Bazaar (Pantaloons),
Star India Bazaar.
• Cash & Carry (C & C) Stores: These stores sell their products to
their members only. The members are typically retailers and
institutions. The key added value is a wide range of products
under one roof, available at wholesale prices. Metro has started
the first C & C store in India in Bangalore. The typical area of a C &
C store is 70,000 to 100,000 sq. ft.

16. FOOD RETAIL FORMATS
“Food Retail Format” as a retail offering that
can be segmented based on the different
value that it offers to the consumer along
three key dimensions – Choice, Service and
Price.

17. THREE MODERN FOOD RETAIL FORMATS
• Hypermarkets:
- Self service stores, mix of food & non food.
- Essentially low price
- 40,000– 75,000 Size (sq.ft)
• Supermarkets:
- Food, laundry and household maintenance products.
- Self service
- low cost
• Convenience stores:
- Mix of products
- 500-1,000 (sq.ft)

19. OPPORTUNITIES FOR NEW FOOD RETAIL
FORMATS
1. Limited-Range Discount Stores
2. Mini-Marts
3. Compact Hypermarkets
4. Specialty Food Stores
5. Convenience Plus

20. LIMITED-RANGE DISCOUNT STORES
• Small
• Easy-to-shop
• Easy-to-access configurations
• Low-priced

21. MINI-MARTS
• low-priced neighborhood stores
• Limited range of fresh food
• Dry groceries and household products

22. COMPACT HYPERMARKETS
• Small in size than hypermarkets
• Reduced range and assortment
• Brings together the strengths of both
hypermarkets and supermarkets

23. SPECIALTY FOOD STORES
• Large produce sections
• Area between 200 and 500 square metres

24. CONVENIENCE PLUS
• Neighborhood shops
• Stand to do well in markets with busier
lifestyles and an ageing population

26. THE BUSINESS ENVIRONMENT AND ITS
INFLUENCE ON FORMATS
1. The cost and availability of real estate

27. 2. Regulatory environment

28. 3. Development of distribution in infrastructure
4..State of technology

29. KEY PLAYERS IN INDIAN FOOD RETAIL
SECTOR
• Reliance fresh
• Subhiksha
• Food bazaar
• More retail
International player
Wall mart- Super center

30. RELIANCE FRESH
Type Supermarket
Founded 30 October 2006
Headquarters Mumbai, India
Key people Mukesh Ambani, CEO

31. • Reliance Fresh is the convenience store format
• Headed by MUKESH AMBANI.
• Reliance plans to invest in excess of Rs 25000 crores in the
next 4 years in their retail division.
• The company already has in excess of 560 reliance fresh
outlets across the country.
• Reliance Fresh store is approximately 3000-4000 square. feet
and caters to a catchment area of 1-2 km.

32. VISION
To create a blend of a typical Indian Bazaar andInternational
Supermarket atmosphere with theobjective of giving the
customer, all the advantages ofQuality, Range and Price
associated with large format stores and also the comfort of
being able to touch andfeel the products.

33. SUBHIKSHA
Type Discount department
store
Founded Chennai, India
(1997)
No. of locations 1000 stores
Key people R. Subramanian
Industry Retail
Employees 25,000

34. • Subhiksha is an Indian retail chain with more
than 1400 outlets
• selling groceries, fruits, vegetables, medicines
and mobile phones.
• It was started and is managed by
R. Subramanian
• Subhiksha plans to open 1000 outlets by
December 2008.
• plans to invest Rs.500 crore to increase the
number of outlets to 2000 across the country
by 2009

35. FOOD BAZAAR
• Food Bazaar, the supermarket variant of
future group.
• Has adopted the 'negotiated and
predetermined' model to source vegetables
and fruit from farmers across states.
• The company will use the model to procure
potatoes from farmers in Uttar Pradesh where
the quantity and quality of the produce is
predetermined. The company decides the
price after the harvest to give maximum
benefit to the farmer.

36. • 35+ stores; pan Indian format
Bhubaneshwar, Nagpur, Nashik, Durgapur….Sa
ngli
• Simple, Indian model
• Minimum habit change for the customers
• Use small entrepreneurs to the hilt, for
category management
• Largest Food Retailer – But just a small spec in
the market
• Shooting for Rs 1000 Cr this year; Rs 2000 Cr
next year

37. MORE RETAIL STORE
Type Department store
Founded 2007
No. of locations 40-50(Mumbai)
Industry Retail

38. • The more. chain of supermarkets, are bright
and clean stores, at convenient locations with
layouts that allow ease of navigation. The
product display is well organised and
facilitates ease of choice. The stores have
been designed by Fitch, the leading
international retail design firm.

39. WAL-MART SUPERCENTER
• The number of non-traditional retail
outlets,such as warehouse clubs and discount
mass merchandisers,has increased
substantially in the pastdecade.
• Traditional supermarkets are facing
seriouscompetition from these retail outlets
because nontraditionalretailers with low-
operating margins areable to provide low-
price appeal to consumers.
• supercenters,ranging in size from 100,000-
200,000 square feet.

42. COMPETITIVE ANALYSIS
(FOOD RETAIL)

44. SUBHIKSHA
• Subhiksha is an Indian retail chain with more than
1400 outlets selling
groceries, fruits, vegetables, medicines and
mobile phones.
• Subhiksha plans to open 1000 outlets by
December 2008.
• Plans to invest Rs.500 crore to increase the
number of outlets to 2000 across the country by
2009.

45. • Subhiksha has seen a considerable growth by
offering goods at cheaper rates and there by
increasing its customer base.
• It is also dubbed as India's largest retail
chain.vision to deliver consistently better value to
Indian consumers.

46. • Subhiksha now has the pan Indian presence
with stores across Delhi, UP, Punjab, Hariyana,
Gujarat, Maharashtra, AP, Karnataka and TN. It
has recently commenced operation in Kerala
also.

47. • Thinking:-
• Bringing in a model that is Indian, capable of
supporting the middle class of India.
• A business model from India is superior to a
business model imported from the West.
• We genuinely believe that through
efficiency, we are helping the consumers save
more.

49. RELIANCE FRESH
• Reliance Fresh is the convenience store format which
forms part of the retail business of Reliance industries of
india.
• Mukesh Ambani Reliance plans to invest in excess of Rs
25000 crores in the next 4 years in their retail division.
• Stores would provide direct employment to 5 lakh young
Indians and indirect job opportunities to a million people,
according to the company.

50. • The company also has plans to train students
and housewives in customer care and quality
services for part-time jobs.
• Company-owned stores currently totals just $8
billion in India.

52. MORE
4 YOU
• The MORE chain of supermarkets, are bright and
clean stores, at convenient locations with layouts
that allow ease of navigation.
• MORE is the answer to the shopping needs of the
Indian housewife who wants a modern and
convenient option in her neighbourhood.

53. • MORE also has a range of products from its
own stable available across value, premium
and select ranges.
• The Rs 9,000-crore pan-Indian plan would
have neighbourhood supermarkets catering to
daily and weekly household shopping needs of
customers.

55. • Food Bazaar supermarket variant of Pantaloon
Retail Ltd, has adopted the predetermined'
model to source vegetables and fruit from
farmers.
• Almost 20% of the cost is saved if the produce is
procured directly from the farmers.

56. • Kishore Biyani-run retail major, Pantaloon, is
awaiting amendments in the Agriculture
Produce Marketing Committee (APMC) Act in
different states to source its produce directly
from the farmers.
• The floor area for the stores will range from
5,000 sqft to 20,000 sqft.

57. • Of the 8,000 stock keeping units available
across the stores, 10% constitute the farm
fresh segment, while the international
standard is around 12%. The company wants
to push the former to 15% in the next three
years.

58. KEY SUCCESS FACTORS FOR FOOD
RETAILING
Increasing need for convenience
• Eight to ten outlets to purchase various food
products
• Time-consuming and inefficient way of
shopping for food
• Changing lifestyle
• ‘Value for time' and ‘Value for money'

59. Availability of quality retail space
• In late 1990s cost of real estate was high and
hence food retail business models were not
financially viable in metropolitan areas
• In the last few years, various factors have led to
increased availability of real estate for
organized retail formats
• 300 malls are at various stages of construction
across metros and mini metros in the country
• The average size of a mall is about 100000 sq ft
• Additional retail space of 30 to 40 million sq. ft.
over the next three to five years

60. Taxation: Implementation of VAT helping
organised retailers
• The Indian government has launched value
added tax (VAT) nationwide April 2005
• Aim was to: boost state revenues, reduce
inter-state barriers to trade and make
accounting more transparent
• This was in favour of organized retailers given
their multi- location presence

61. Increasing share of private labels
• Share of private labels in the basket of key
food retailers is increasing
• Fierce competition with the well-established
brands of the leading FMCG companies
• Trent (A Tata Group Company) has now
launched a hypermarket with focus on Star
India Bazaar and aim to achieve a significant
share of sale through private labels.

62. Retailers' eye on the unbranded food space
• Modern food formats like Food Bazaar and
Spencer's have their eye on the unbranded part
of the consumer's shopping basket
• Retailers are offering a package of convenience
and freshness
• Food retailers are also offering 'live kitchen'
formats
• Examples: Grinding coffee fresh at store, idli
batter, paneer, curd and cut vegetables

63. KEY CHALLENGES IN FOOD RETAILING
 Penchant for fresh/home-made and value
consciousness
• Dietary patterns, poor electricity supply, low
penetration of refrigerators and a family structure
• Value conscious
• A TSMG study indicates that packaged food
players need to drive down prices by almost 35-
40% to be comparable on cost with home made
food

64. Diversity of tastes and preferences
• Multiple cultures, languages and religions
• Preferences of the Indian consumer.
• A challenge for players aspiring to develop a
pan Indian presence.

65. Willingness to travel
Sourcing base and efficiency
Real estate availability and cost
• Rentals account for 7-7.5%
• Real estate availability and costs
• Factors like adequate parking, ambience and
proximity the key drivers of footfalls
Manpower availability

66. EMERGING TRENDS IN FOOD
RETAILING
Big becoming bigger
• Size drives profitability, not just through
economies of scale in operations but also
through higher bargaining power
• The growth stage will be characterized by
rapid expansion and consolidation among
these players.

67. Rise of organic foods and health and wellness
segment
• Consumer attitudes and preferences are
undergoing a shift
• Factors like increased disposable
incomes, changes in lifestyle patterns, shift in
age structure, increased number of working
women and multi cultural exposure
• Increasing health consciousness in the future
• Organic foods and wellness products

68. Increasing focus on private labels
• Competition in the organized retail market
• Discounts and promotions are expected to
play a critical part in generating footfalls
• More attractive to promote private labels or
store brands given their higher margins.
• Consumer would benefit from lower prices.

69. FUTURE OF FOOD RETAILING
 Innovation on Retail format
• by targeting specific customer segments and
serving their needs better e.g. working
women, single office goers, etc
• by changing the product mix e.g. entirely private
label stores, exclusively fresh produce stores
• by offering new forms of convenience and wider
range to the customer e.g. tele retail and internet
retail

70. Technological Innovations
• Self-scan checkouts
• Using RFID tags
• Web-enabled POS systems, e-SCM systems, e-
Procurement systems and warehouse
management systems
• Use of cutting edge analytics

71. THANK YOU..