Food Retail Segment

Presented by :Group 11

Presented to: Sapna Malhotra

Group Members

• Aamir Khan 02• Aashish Agarwal 17• Gaurav Vashishth 47• Harshada Bombat 52• Himani Lal 55• Himanshu Chatterjee 56

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.

Introduction• The food industry is on a roller coaster ride as Indians continue to have a feast

• Food retailing has come of age where most of the food are retailed through supermarket stores

• Consumers can inspect, select and pick up the products that they like and also ready to pay a fair price

• From simple trading activity, food retailing is now heading to the status of an industry.

• Indian retail food industry has revolutionized shopping experience of Indian customers.

• Growing at the rate of 30%, the Indian food retail is going to be and no doubt is the major driving force for the retail industry

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.

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

Types of Food retailing markets

• Supermarket(weekly, monthly and occasional needs)

such as Food World, Trinetra and Nilgiris.

• Hypermarket(cater bulk shopping in both food and non-food categories) such as Spencer, BigBazar(Pantaloons).

• Neighborhood stores(caters daily and weekly needs) such as Mother Dairy , Subhiksha.

• Cash and carry stores (products for members only) supply both food and non-food items such as C&C store in Bangalore

• Specialty stores

• Discount stores

Packaging

Food Bazaar

• Pantaloon Retail (India) Limited is India's leading retailer that operates multiple retail formats in both the value and lifestyle segment.

• Its founder Kishore Biyani is known as India's "King of Retail".

• 1987 when the company was incorporated as Manz Wear Private Limited.

• In 1992, Pantaloon launched its IPO.

• In 1994, The Pantaloon Shoppe - exclusive menswear store in franchisee format was launched across the country

• In 2001, Big Bazaar, India's first hypermarket chain was launched.

• In 2002, Food Bazaar, the supermarket chain was launched.

• The Group operates a little over 1,000 stores, with a total retail space of 16 million sq ft.

• 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.

• 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.

• 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.

• To improve efficiency in fresh produce retailing, the group is setting up a separate arm which will handle sourcing, grading, assortment and packing of fresh produce.

Technological innovation

• Packaging Technology

• Air proof Sealing

• Online retailing and e-tailing

• Electronic data Interchange

• RFID technology

•Industry: Retail •Type: Supermarket•Chairman & Managing Director: Mukesh Ambani•First Outlet: Hyderabad( Banjara Hills)•Founded: 30th October 2006 •Headquarter: Mumbai•Area: 2000-4000 Sq. Ft.

• 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.

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.

• 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.

Spencer Retail

Spencer Retail• Spencer's Retail Limited is one of India's largest and

fastest growing multi-format retailer with 250 stores, including 36 large format stores across 50 cities in India.

• Established in 1996

• Spencer's as hypermarkets and convenient stores catering to various shopping needs of its large consumer base.

Spencer Retail

• Based in Kolkata,Spencer's Retail is one of the country's fastest-growing retail companies with approximately 2 million square feet of retail space and more than 400 stores in 65 cities.

• Spencer's Retail is a division of RPG Enterprise, a business group with more than 20 companies in industries such as power, technology, retail, and entertainment

Basically it has five formats. :-

• Spencer’s express – These stores are around 1000 sq ft in size, provides fresh food ranging from bread to vegetables and fruits, coffee, milk to juices.

• Spencer’s Fresh – These are slightly bigger in size than Express outlets with 2000 sq. ft. air-conditioned stores are well stocked with fresh food for a lesser prices than the local vendors.

• Spencer’s Daily – It is a regular friendly neighbourhood grocery store with about 4000-7000 sq ft in size.

Spencer Retail

• Spencer’s hyper – A hypermarket with more than 25,000 sq. ft. in trading area

• MusicWorld :Started in 1997, music and home video retail chain spread across 45 cities in India through 279 outlets. It commands a market share of 20-25per cent in markets where it is present. Today it operates in four formats. Music World Destination stores – 13, Express stores -64, Franchisee stores – 26, Unplugged – 176.

• Spencer’s Travel Services: With a turnover of over US$ 2.2 billion and offices all over India dedicated to Cargo and Passenger transportation.

Spencer Retail

SWOT ANALYSIS

SWOT Analysis

•Private label sale – own products

•Contract Farming

•Network

•Technology intensive

Strength Weaknesses

•Poor inventory control

•Staff – Lack of knowledge about products

•Parking

Opportunities

No middlemen, Farmers – Customer

Rural Retailing

Threat

Un-organised sectors

Shopping Culture

Government Policies and Trend

• The government is also considering the opening up of the $330-billion retail market with adequate provisions to protect neighborhood stores.

• The major development in food retail is consideration of

Foreign Direct Investment (FDI) with a limitation that all companies would have to meet mandated export obligations.

• FDI Policy for Retail: Gates have been opened up for single brand retailers. In February 2006, the door was opened to some extent when the government allowed 51% FDI by single brand companies subject to government approvals

Government Policy on FDI in retailing

• FDI in retailing in not allowed per say, foreign retailers can operate in India through– Joint ventures, where the Indian partner is a export

house– Franchising/Local manufacturing/Sourcing from small-

scale sector – Cash and carry operations (for example, Giant in

Hyderabad)• The McKinsey report states FDI will help the retail

businesses to grow from the present $180 billion to $460-470 billion by 2010.