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Food Retail in India

Industry Profile

Reference Code: 0102-2058Publication date: August 2009



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India - Food Retail

© Datamonitor (Published August 2009)

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EXECUTIVE SUMMARY

India - Food Retail


EXECUTIVE SUMMARY

Market Value

The Indian food retail market grew by 10.6% in 2008 to reach a value of $263.7

billion.

Market Value Forecast

In 2013, the market is forecast to have a value of $392.4 billion, an increase of 48.8%

since 2008.

Market Segmentation I

Convenience stores and gas stations form the most important channel in the market,

accounting for 66.9% of the total value.

Market Segmentation II

India generates 23.3% of the revenues in the Asia-Pacific food retail market.



CONTENTS

India - Food Retail


TABLE OF CONTENTS

EXECUTIVE SUMMARY 3

CHAPTER 1 Market Overview 7

1.1 Market Definition 7

1.2 Research Highlights 7

1.3 Market Analysis 8

CHAPTER 2

Market Value 9

CHAPTER 3 Market Segmentation I 10

CHAPTER 4 Market Segmentation II 11

CHAPTER 5 Competitive Landscape 12

CHAPTER 6 Leading Companies 15

6.1 Pantaloon Retail 15

6.2 Bharti 19

6.3 Reliance Industries Limited 20

6.4 Spencer's Retail 24

6.5 Aditya Birla Group 25

6.6 Apna Bazaar 27

CHAPTER 7 Market Forecasts 28

7.1 Market Value Forecast 28

CHAPTER 8 Macroeconomic Indicators 29



CONTENTS

India - Food Retail


CHAPTER 9 Appendix 31

9.1 Methodology 31

9.2 Industry Associations 32

9.3 Related Datamonitor Research 32

CHAPTER 10 Appendix 33

10.1 Methodology 33



CONTENTS

India - Food Retail


LIST OF TABLES

Table 1: India Food Retail Market Value: $ billion, 2004-2008..........................................9

Table 2:

India Food Retail Market Segmentation I: % Share, by Value, 2008.................10

Table 3: India Food Retail Market Segmentation II: % Share, by Value, 2008................11

Table 4: Key Facts: Pantaloon Retail (Pantaloon) ..........................................................15

Table 5: Key Financials: Pantaloon Retail (Pantaloon)...................................................18

Table 6: Key Facts: Bharti Retail ....................................................................................19

Table 7: Key Facts: Reliance Industries Limited .............................................................20

Table 8:

Key Financials: Reliance Industries ..................................................................23

Table 9: Key Facts: Spencer’s Retail..............................................................................24

Table 10: Key Facts: Aditya Birla......................................................................................25

Table 11: Key Facts: Apna Bazaar ...................................................................................27

Table 12: India Food Retail Market Value Forecast: $ billion, 2008-2013.........................28

Table 13: India Size of Population (million) , 2004-2008...................................................29

Table 14:

India GDP (Constant 2000 Prices, $ billion), 2004-2008...................................29

Table 15: India Inflation, 2004-2008 .................................................................................29

Table 16: India Exchange Rate, 2004-2008 .....................................................................30



MARKET OVERVIEW

India - Food Retail


CHAPTER 1 MARKET OVERVIEW

1.1 Market Definition

The food retail market includes the retail sales of all food products, both packaged

and unpackaged. Beverages includes retail sales of all alcoholic and non-alcoholic

beverages. All on-trade sales of food and beverage are excluded. All currency

conversions are calculated at constant average 2008 exchange rates.

For the purpose of this report, Asia-Pacific is deemed to comprise Australia, China,

Japan, India, Singapore, South Korea, and Taiwan.

1.2 Research Highlights

The Indian market generated total revenues of $263.7 billion in 2008, representing a

compound annual growth rate (CAGR) of 12.3% for the period spanning 2004-2008.

Convenience stores and gas stations proved the most lucrative sales channel for the

Indian market in 2008, generating total revenues of $176.5 billion, equivalent to

66.9% of the market's overall value.

The performance of the market is forecast to decelerate, with an anticipated CAGR of

8.3% for the five-year period 2008-2013, which is expected to drive the market to a

value of $392.4 billion by the end of 2013.



MARKET OVERVIEW

India - Food Retail


1.3 Market Analysis

India’s food retail market has grown more rapidly than any other in the Asia-Pacific

region during the 2004-2008 period. Despite deceleration forecast for the 2008-2013

period, it should continue to perform strongly.

The Indian market generated total revenues of $263.7 billion in 2008, representing a

compound annual growth rate (CAGR) of 12.3% for the period spanning 2004-2008.

In comparison, the Chinese market increased with a CAGR of 9.8%, and the

Japanese market remained virtually unchanged, over the same period, to reach

respective values of $313.6 billion and $387 billion in 2008.

Convenience stores and gas stations proved the most lucrative sales channel for the

Indian market in 2008, generating total revenues of $176.5 billion, equivalent to66.9% of the market's overall value. In comparison, sales through food and drinks

specialists generated revenues of $83.4 billion in 2008, equating to 31.6% of the

market's aggregate revenues.

The performance of the market is forecast to decelerate, with an anticipated CAGR of

8.3% for the five-year period 2008-2013, which is expected to drive the market to a

value of $392.4 billion by the end of 2013. Comparatively, the Chinese market will

increase with a CAGR of 6.6%, and the Japanese market will decline with a

compound annual rate of change (CARC) of -0.02%, over the same period, to reach

respective values of $430.8 billion and $386.7 billion in 2013.



MARKET SEGMENTATION I

India - Food Retail


CHAPTER 3 MARKET SEGMENTATION I

Convenience stores and gas stations form the most important channel in the Indian

food retail market, accounting for 66.9% of the total value.

Food & drink specialist stores account for a further 31.6%.

Table 2: India Food Retail Market Segmentation I: % Share, by Value,

2008

Category % Share Convenience stores & gas stations 66.90%Food & drink specialists 31.60%Hypermarkets/supermarkets and discounters 1.10%

Other channels 0.30%Cash & carries and warehouse clubs 0.10% Total 100.0%

Source: Datamonitor D A T A M O N I T O R

Figure 2: India Food Retail Market Segmentation I: % Share, by Value,

2008

Convenience s tores

& gas stations

66.9%

Hypermarkets /

supermarkets anddiscounters

1.1%

Other channels

0.3%

Cash & carries and

warehouse clubs

0.1%

Food & drink

specialists

31.6%




MARKET SEGMENTATION II

India - Food Retail


CHAPTER 4 MARKET SEGMENTATION II

India generates 23.3% of the revenues in the Asia-Pacific food retail market.

Japan is the most lucrative market in the region, accounting for 34.2% of the total.

Table 3: India Food Retail Market Segmentation II: % Share, by Value,

2008

Geography % Share Japan 34.20%China 27.70%India 23.30%Rest of Asia-Pacific 11.30%South Korea 3.40% Total 100.0%


Figure 3: India Food Retail Market Segmentation II: % Share, by Value,

2008


Japan

34.2%

China

27.7%

India

23.3%

Rest of As ia-

Pacific

11.3%

South Korea

3.4%



COMPETITIVE LANDSCAPE

India - Food Retail


CHAPTER 5 COMPETITIVE LANDSCAPE

The food retail industry will be analyzed taking the retailers as players. The key

buyers will be taken as end-consumers, and food manufacturers, farmers, and

agricultural co-operatives as the key suppliers.

In India, food retail, particularly the hypermarket/supermarket sector, is less

developed than in Western economies. Some companies, including conglomerates

like Aditya Birla, are expanding rapidly in this competitive space. Many small stores

are independently run, often by families and without technical or accounting

standardization. The ratio of such retailers to consumers is high, allowing the latter

great freedom to move between at will, strengthening buyer power.

The sheer volume of potential customers in key areas of the food retail industry

diminishes the standing of any individual customer. The revenue generated by anyparticular consumer is minimal and, in itself, expendable. Yet insofar as they may

represent a set of wider interests across consumers, retailers cannot afford to

disregard the relevant sensitivities of buyers. Price and convenience are two central

concerns however they are not necessarily the only factors. The response of food

retailers must accommodate many diverse interests.

Whilst loyalty towards a specific retailer is common at a small, local scale for various

personal reasons, larger retailers struggle to maintain a strong loyalty that is not

secondary to the need for a competitive pricing scheme, a perceived quality of

product range, or other defining feature. Although high brand recognition does not

automatically translate into consumer loyalty, if it is supported by a product range inwhich popular food products are central, the retailer can often draw indirectly on the

loyalty base that certain food manufacturers have established. With switching costs

generally absent in this area, however, a degree of independence remains for

consumers and other retailers may offer attractive alternatives.

Specialty or luxury retailers can, due to the high level of product differentiation, justify

price levels that would otherwise be unsustainable yet the limited volume of

consumers places restraints on the power of such players. Buyer power, overall, is

moderate.




India - Food Retail


Suppliers to the food retail industry include food manufacturers, and farmers and

agricultural co-operatives. In order to ensure stability and offset the dangers of local

sourcing problems or price fluctuations, large retail companies often attempt to

maintain relationships with a wide range of suppliers. This diffuses dependency,

minimizing the risks to retailers, and strengthening their standing in relation to

suppliers. For this system however, the region must be able to support sufficient

supply chains, and the necessary infrastructure. This is not always the case in the

Indian market, which poses one of the key challenges to retailers, restoring a degree

of power to those who control the limited supply routes in such cases.

Long-term contractual obligations are avoided where possible, however, and

switching costs kept to a minimum. With a firm hold on key distribution channels, the

leading retailers can dominate negotiations with certain suppliers. This is often

impossible for smaller retailers such as specialist or luxury outlets. The limited

number of suppliers in niche areas and the centrality of product quality or preparation

type limits the available range of sourcing options. With switching costs subsequently

higher, the balance of power shifts somewhat from smaller retailers to specialist

suppliers.

Mainstream retailers evade this difficulty due to the large number of suppliers.

Frequently offering only limited product differentiation – in the absence of strong

branding – core products are replicated quickly and the pressure to undercut other

suppliers becomes significant. Whilst the need to satisfy consumer demand for

popular products bolsters the relevant manufacturers, many others face a high

degree of retailer mobility as they shift suppliers in accordance with pricing pressures.

Supplier power is no more than moderate.

Large-scale, established retailers hold a natural advantage in operating businesses

that benefit significantly from economies of scale, allowing aggressive pricing

schemes that are not viable for smaller retailers. Strong branding exercises and fast

paced expansion deepen this asymmetry. Nevertheless, they are not invulnerable to

the threat of new entrants. Exit and entry costs within the industry are relatively low in

regions that offer the relevant infrastructure, encouraging potential entrants. Given

the entrenched status of many large-scale retailers, and the gradual emergence of

heavier branding, direct head-to-head competition is extremely difficult for new

retailers.

The fragmentation of the industry does allow space for smaller retailers to flourish

however, sheltered within local niches, and strong market growth is attractive to more

ambitious entrants.




India - Food Retail


For foreign players, government regulation has a strong influence on ease of market

access. India has tended to adopt a protectionist stance in retail, with multi-brand

retailing subject to caps on foreign direct investment, while the single-brand retail

sector, and also the wholesale sector, more accessible to foreign investment. The

threat from new entrants is moderate.

The chief alternative to food retail is food service. Supported by strong marketing

campaigns in the case of fast food companies, and cultural traditions with respect to

sit-down restaurants, both types represent a relevant alternative for many consumers.

However, they do not constitute a complete substitute for reasons of cost, health and

more basic preferences. This alternative, for the vast majority of people, accompanies

food retail rather than replacing it completely.

Another substitute is found in subsistence agriculture in which individuals or families

farm food to provide for their own personal needs. Despite the introduction of market

capitalism it remains common in many rural areas which are yet to be captured by the

industry. Movement between the two systems is predominantly in the direction of food

retail, however discontent with the decline of traditional lifestyles and its associated

valueshas sparked the occasional exception. Nevertheless, the threat from

substitutes overall is weak.

Competition is often fierce within the food retail industry. The lack of substantial

switching costs for consumers places pressure on retailers to secure their custom.

The limited level of differentiation across the basic product range pushes larger

retailers into competitive pricing policies. Price wars are frequent, intensified by the

increase in consumer awareness generated by ‘comparison sites’. Whilst some

companies operate in other industries (for example, conglomerates like Reliance

Industries) and can absorb the temporary impact of declining food sales, or high

supply prices, for many, food retail lies at the heart of the business. This basic

dependency gives rise to aggressive competition, assessed as moderate overall.



LEADING COMPANIES

India - Food Retail


CHAPTER 6 LEADING COMPANIES

6.1 Pantaloon Retail

Table 4: Key Facts: Pantaloon Retail (Pantaloon)

Address: Knowledge House, Shyam Nagar, Off Jogeshwari VikhroliLink Road, Jogeshwari East, Mumbai 400 060, IND

Telephone: 91 22 3084 1300Fax: 91 22 6644 2222Website: www.pantaloon.comFinancial Year-End: JuneTicker: 523574Stock Exchange: Bombay

Source: Company Website D A T A M O N I T O R

Pantaloon Retail is a subsidiary of Indian company Future Group. It primarily

operates multiple retail formats in both the value and lifestyle segments in India. It

operates over 1000 stores across 71 cities in India, and occupies retail space of

about 12 million square-feet. The company offers its products in various lines of

businesses such as food, fashion, home and electronics, telecom and IT, general

merchandise, leisure and entertainment, wellness and beauty, books and music. The

company also offers products through its Internet retailing store futurebazaar.com.

Pantaloon offers food products through retail formats such as Brew Bar, Cafe

Bollywood, Chamosa, Food Bazaar, and Sports Bar. Brew Bar offers over 15 brands

of domestic and imported beer. Brew Bar also offers snacks and set meals. Cafe

Bollywood (Bollywood refers to the Indian film industry) is a fast food retail chain

offering eateries in a Bollywood ambience. It offers Indian street food, burgers,

pizzas, and juices. Chamosa is a chain of Indian snack counters and is mostly

located in and around high traffic areas. Food Bazaar aims to offer customers a blend

of Western-style supermarket and traditional Indian market, and supplies a wide

range of pre-packed commodities. There are approximately 200 Food Bazaar outlets

in more than 65 Indian cities. Sports Bar is a concept bar that focuses on the world of

sports. Sports Bar offers domestic and imported spirits, beers and wines.



LEADING COMPANIES

India - Food Retail


Pantaloon offers fashion related products under banners such as aLL, Big Bazaar,

Blue Sky, Brand Factory, Celio, Central, Navaras, Pantaloons and Planet Sports. aLL

is a fashion store for plus size men and women. It offers ready-to-wear fashionable

clothes and accessories in western wear, Indo-western or ethnic wear in both formal

and casual categories. Big Bazaar is a fashion and general merchandise

hypermarket. It offers fashion products, home furnishings, utensils, crockery, cutlery,

and sports goods. Blue Sky stores offer branded and private label sunglasses and

watches. Some of the private label watch brands which Blue Sky offers are Cube,

Koenig, RIG, Lombard and UMM.

Brand Factory operates a chain of discount stores that offer apparels for men,

women, and infants along with accessories, cosmetics, footwear, sportswear,

luggage, and home linen. These discount stores stock fashion brands such as Levis,

Pepe Jeans, Dockers, Wrangler, ProVogue, Arrow, Nike, Adidas, Reebok, Louis

Phillip, Allen Solly, Reid and Taylor, Gini and Jony, amongst others. Celio, a market

leader in men's ready to wear clothing in France, is retailed through selected stores of

Pantaloons and Central in India.

Central, the mall concept of Pantaloon, offer over 300 brands across categories such

as apparel, footwear and accessories for women, men, children and infants, and the

product ranges such as, music, books, coffee shops, food courts, super markets

(food bazaar), fine dining restaurants, pubs and discotheques. Central also offers

services such as travel, f inance, investment, insurance, concert/cinema ticket booking

and bill payments. Navaras is a jewelry store that offers branded jewelry in a

hypermarket set-up. Pantaloons stores offers fashion products such as casual,

ethnic, formal, party and sports wear for men, women and kids. Planet Sports is a

sports and lifestyle specialty retail chain with extensive offerings for sportswear and

equipment across all categories including running, tennis, training, golf, fitness,

basketball, motor sports as well as other lifestyle products.

In the general merchandise category, Pantaloons operates retail formats such as Big

Bazaar, Big Bazaar Wholesale Club, Blue Sky, Brand Factory, Central, Navaras,

Pantaloon and Shoe Factory. Big Bazaar is a retail store chain in a hypermarket

format that offer fashion products, home furnishings, utensils, crockery, cutlery, and

sports goods. Shoe Factory, a footwear retail store chain offers branded footwear and

accessories to men, women and kids.



LEADING COMPANIES

India - Food Retail


Pantaloon has presence in the leisure and entertainment space through an affiliated

company, Galaxy Entertainment. Pantaloon's F 123, a gaming and entertainment

zone, offers a range of gaming options ranging from bowling, pool, interactive video

games, bumper cars along with fun foods and services for junior and adult

banqueting. The company also operates Bowling Co., a family entertainment centre,

in Mumbai. In a joint venture with Blue Foods, Pantaloon operates food courts, fine

dine specialty restaurants, thali restaurants, banquets and multiple kiosks with brands

such as Copper Chimney, Bombay Blue, Noodle Bar, Spaghetti Kitchen and The

Spoon.

The company operates specialty stores in the wellness and health retailing. It

operates Star & Sitara and Fit & Healthy. Star & Sitara provides skin and hair related

beauty services for men and women. Fit & Healthy section housed within Big Bazaars

and Food Bazaars provides health products and health related tips, information and

advice.

Pantaloon has presence in the books and music category through 'Depot' which

offers books, music CDs and cassettes, home videos, multimedia (CD-ROMs)

products and gift items. In the home and electronics retailing, the company offers the

furniture, furnishings, home accents and electronic products through Collection I,

Furniture Bazaar, Electronics Bazaar, e-zone, Home Bazaar and Home Town retail

formats.

In the telecom and IT category, the company offers products such as gadgets, mobile

phones, accessories, download kiosks, airtime recharges, landline instruments, blue

tooth accessories, and mobile trinkets. The retail store brands that offer these

products are Gen M, One Mobile, and M Port.



LEADING COMPANIES

India - Food Retail


Key Metrics

The company recorded revenues of INR 58,665 million (approximately $1,338.9

million) during the financial year ended June 2008 (FY2008), an increase of 76.2%

over FY2007. The net profit was INR 208.9 million (approximately $4.8 million) in

FY2008, a decrease of 41.7% over FY2007.

Table 5: Key Financials: Pantaloon Retail (Pantaloon)

All in $ millions, except for employee numbers and margins

Source: Company Filings D A T A M O N I T O R

Figure 4: Revenues & Profitability: Pantaloon Retail (Pantaloon)

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0

2004 2005 2006 2007 2008

Year

U S $ M i l l i o n s

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

P r o f i t M a r g i n (

% )

Revenues Net Income Profit Margin


Metric 2004 2005 2006 2007 2008Revenues 150.6 241.0 427.3 759.7 1,338.9Net Income 4.5 8.8 12.3 8.2 4.8

Profit Margin 3.0% 3.7% 2.9% 1.1% 0.4%Total Assets 94.4 152.2 356.5 746.0 1,526.0Total Liabilities 73.1 101.6 235.8 473.9 1,017.7



LEADING COMPANIES

India - Food Retail


6.2 Bharti

Table 6: Key Facts: Bharti Retail

Address: Aravali Crescent, 1, Nelson Mandela Road, Vasant Kunj,Phase II, New Delhi-110070, IND

Telephone: 91 11 4666 6100 / 6500Fax: 91 11 4166 6137Website: www.bharti.com


Bharti Retail is a wholly owned subsidiary of Bharti Enterprises Limited. The parent

company has businesses including telecommunications, training and education

services, fruit and vegetables (through a joint venture with Del Monte), and financial

services (through joint ventures with AXA), as well as retail.

The two main formats operated by Bharti Retail are Easyday neighborhood stores,

and Easyday Market compact hypermarkets. The first stores opened for business in

2008. As of November 2008, Bharti operated around 12 neighborhood stores.

Bharti also has a joint venture with Wal-Mart that offers wholesale cash-and-carry and

supply chain management functions. Its first cash-and-carry outlet, under the Best

Price Modern Wholesale banner, opened in Amritsar, in May 2009.

Key Metrics

No financial details are available for this company.



LEADING COMPANIES

India - Food Retail


6.3 Reliance Industries Limited

Table 7: Key Facts: Reliance Industries Limited

Address: Maker Chambers IV, Nariman Point, Mumbai 400 021,Maharashtra, IND

Telephone: 91 22 2278 5000Fax: 91 22 2204 2268Website: www.ril.comFinancial Year-End: MarchTicker: 500325; RELIANCE EQStock Exchange: Bombay; India National Stock Exchange


Reliance Industries (RIL) is a private sector company in India. The company operates

in more than 100 countries around the world. It has production facilities at three major locations in India and four in Europe.

The company operates through three major business segments: refining,

petrochemicals, and oil and gas, but has other interests such as retail and textiles.

RIL entered the retail sector in 2006, through its Reliance Retail Limited (RRL)

subsidiary. Its first format was Reliance Fresh, a convenience store format of 3,000 –

4,000 square feet, and expansion since then has led to it operating 590 stores in 13

states of India (as of end 2008). Formats include Reliance Digital, the Reliance Mart

hypermarket, and specialty outlets: Reliance Trends for clothing, Reliance Footprints

for footwear, Reliance Jewels forjewellery, Reliance Timeout for books, music and

similar leisure products. Reliance Autozone for automotive aftermarket products, and

Reliance Wellness for health and wellness products.

In its food operations, Reliance has built relationships with producers, developed

processing centers, and can now sell fruit, vegetable, and staples to wholesalers and

institutional customers.

RIL operates the third largest refinery in the world at Jamnagar, Gujarat. The refinery

has a capacity of 33 million tons per year (0.66 million barrels per day of crude

throughput). IN FY2008, the refinery processed 31.8 million tonnes of crude and had

a high utilization rate of 96.4%.

The segment produces liquefied petroleum gas (LPG), propylene, naphtha,

reformate, gasoline, TAME (tertiary amyl methyl ether), jet/aviation turbine

fuel/superior kerosene oil, high speed diesel, sulphur, and petroleum coke. RIL has

production capacities of (in millions of barrels per annum): LPG up to 2.3, propylene

up to 0.7, naphtha up to 4.0, reformate up to 2.7, gasoline up to 4.0, TAME up to 0.



LEADING COMPANIES

India - Food Retail


25, jet, aviation turbine fuel, and superior kerosene oil up to 3.6, high speed diesel up

to 11, sulphur up to 0.5, and petroleum coke up to 2.5.

In FY2008, RIL produced 33,139 kilotonnes (KT) of petroleum products comprising

28,522 KT of gases and distillates and 4,617 KT of fuel oils and solids. RIL markets

its petroleum products through 1,432 retail outlets in India. The company exported

22.1 million tonnes of refined products in FY2008. Asia accounted for 55% of overall

petroleum products exports, Europe accounted for 20%, and Africa 18%.

The petrochemicals segment encompasses the production and marketing operations

of petrochemical products namely, high and low density polyethylene, polypropylene,

polyvinyl chloride, polyester yarn, polyester fibres, purified terephthalic acid,

paraxylene, ethylene glycol, olefins, aromatics, linear alkyl benzene, and polyethylene

terephthalate. The petrochemicals segment manufactures polymers, polyester,

polyester intermediates, and other petrochemicals.

The polymer business has cracker facility at Hazira, as well as its refinery at

Jamnagar. The company operates plants for polyolefins and PVC (polyvinyl chloride)

with licensors like Novacor, Geon, and Union Carbide. The products manufactured

include polypropylene (PP), high density polyethylene (HDPE), and liner low density

polyethylene (LLDPE), polyvinyl chloride (PVC), and poly-olefin (HDPE and PP)

pipes. The products are sold under various brand names including, Repol

(polypropylene), Relene (high density polyethylene), Reon (polyvinyl chloride), and

Relpipe (HDPE and PP). In FY2008, the business produced 1,712 KT of PP, 1,083

KT of PE, and 579 KT of PVC.

RIL is the largest producer of polyester fiber and yarn in the world. The company has

a manufacturing capacity of 2,000 KT per annum with a production plant at Naroda.

The company has a portfolio of about 120 global patents in the polyester domain. It

has a manufacturing capacity of about 2.5 million tonnes. The products manufactured

include staple fiber, filament yarn, texturized yarn, twisted and dyed yarn, stretch

yarns, cotton look, cotluk feel yarns, can dyed, dope dyed, low pill, hollow fibers,

secondary reinforcement products, quality certified sleep products, and polyethylene

terephthalate (PET). The products are offered under the brand names Recron

(texturized yarn, twisted yarn, staple fiber, and filament yarn), Recron Stretch, Recron

Cotluk, Recron Dyefast, Recron Superblack, Recron Superdye, Recron Fibrefill,

Recron 3S, Recron Certified, and Relpet. In FY2008, the business produced 840

kilotons of PFY, 765 kilotons of PSF, and 305 kilotons of PET.



LEADING COMPANIES

India - Food Retail


The polyester intermediates manufactures paraxylene (PX) and purified terephthalic

acid (PTA) and mono ethylene glycol (MEG). In FY2008, the business produced

1,878 kilotons of PX, 2,035 kilotons of PTA, and 801 kilotons of MEG. The company

is also India's largest manufacturer of linear alkyl benzene (LAB) with a 100 KT per

annum plant at Patalganga in technical collaboration with UOP, the product being

marketed under the trade name Relab. The other petrochemicals products produced

include aromatics, solvents, textile grade chips, tri-ethylene glycol (TEG), ethylene

oxide, and di-ethylene glycollab. These are sourced from the cracker and aromatics

plant at Hazira, aromatics plants at Jamnagar and Patalganga, and the linear alkyl

benzene plant at Patalganga.

In the aromatics category, RIL manufactures benzene, toluene, mixed-xylene, and

ortho-xylene. Products in solvents category includes remax 1, remax 2, washoil,

renine, heavy aromatics, heavy alkylate, and CBFS. The company produces 52 KT

per annum of textile grade chips product and 1.6 KT per annum of TEG. RIL has a

total installed monoethylene glycol (MEG) capacity of 300 KT per annum and

produces 34 KT of DEG (Diethylene Glycol) annually as a by-product.

In the oil and gas segment, RIL is the largest exploration acreage holder in the private

sector in India with 33 domestic exploration blocks covering 337,000 square

kilometers of total area. In addition, the company owns interest in three exploration

blocks in Yemen; two each in Oman, Kurdistan, and Columbia; and one each in East

Timor and Australia covering an area of about 38,000 square kilometers. RIL also has

five coal bed methane (CBM) blocks covering an area of about 4,000 square

kilometers.

RIL has a 30% participating interest in the producing blocks of Panna-Mukta and

Tapti oil and gas fields in Bombay High offshore block. Panna field comprises 430

square kilometers of area, located 50 kilometers east of the Bombay High field and is

95 kilometers northwest of Mumbai city. The Mukta field is comprised of 777 square

kilometers of area, located 100 kilometers northwest of Mumbai city. In FY2008, the

Panna-Mukta fields produced 1,910,000 tonnes of crude oil and 2,030 million metric

standard cubic meters (MMSCM) of natural gas while the Tapti field produced 3,365

MMSCM of gas and 232,000 tonnes of condensate.



LEADING COMPANIES

India - Food Retail


Key Metrics

Reliance Industries Limited generated revenues of $31,786.1 million in the financial

year ended March 2008, an increase of 25.6% compared to the previous year. The

company's net income totaled $3,483.1 million in fiscal 2008, an increase of 39.9%

compared with 2007.

Table 8: Key Financials: Reliance Industries

All in $ millions, except for employee numbers and margins


Figure 5: Revenues & Profitability: Reliance Industries

0.0

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

30,000.0

35,000.0

2004 2005 2006 2007 2008

Year

U S $ M i l l i o n s

8.0%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

11.5%

P r o f i t M a r g i n ( % )

Revenues Net Income Profit Margin


2004 2005 2006 2007 2008

Revenues 12,837.6 16,698.6 20,341.3 25,308.1 31,786.1

Net Income 1,177.7 1,728.1 2,069.9 2,489.6 3,483.1

Profit Margin 9.2% 10.3% 10.2% 9.8% 11.0%

Total Assets 13,436.6 14,482.6 17,492.1 26,784.1 34,187.8

Total Liabilities 5,573.4 5,261.1 6,125.0 4,622.1 6,131.9

Employees 11,358 12,113 12,540 24,696 25,487



LEADING COMPANIES

India - Food Retail


6.4 Spencer's Retail

Table 9: Key Facts: Spencer’s Retail

Address: 7th Floor, 5 Clive Row, Kolkata-700 001, INDTelephone: 91 33 6625 7893Website: www.spencersretail.com; www.rpggroup.com/sretail.html


Spencer’s Retail is an India-based multi-format retailer. It is part of the RPG Group.

Established in 1996, and currently present in 66 Indian cities, Spencer’s is one of the

largest retailers in the country. It offers a wide range of products: food and drink,

consumer electronics and household appliances, clothing, leisure products, and other

categories.

The company has more than 1 million square feet of retail space and 275 stores. It

has two main formats. Spencer’s Hyper stores are 15,000 square feet and above in

size. They stock food and non-food items. Spencer’s stores range in area from 1,500

to 15,000 square feet. This format has a sharper focus on food and beverages,

although the larger stores (above 10,000 square feet) may also offer home care

products, basic clothing, and a limited range of electrical and electronic goods.

Parent company RPG was established in 1979. Its businesses include electric power

generation and distribution, power transmission engineering, tire manufacturing,

carbon black production, entertainment, and software and services. In the retail

sector, as well as Spencer’s, RPG owns the Music World chain of recorded music

stores, and in 2007 opened the first of its Books and Beyond stores, which sell books,

toys, and related items.

Key Metrics

Financial details for Spencer’s Retail are unavailable. RPG itself reported unaudited

revenues of INR 30.98 billion ($707 million) in the fiscal year ending March 2009, an

increase of 9% on the previous fiscal year. Net income rose by 15.5% to INR 4.1

billion ($93.6 million).



LEADING COMPANIES

India - Food Retail


6.5 Aditya Birla Group

Table 10: Key Facts: Aditya Birla

Address: Aditya Birla Centre, 1st Floor C Wing, S K Ahire Marg Worli,Mumbai 400 030, Maharashtra, IND

Telephone: 91 22 6652 5000Fax: 91 22 6652 5741Website: www.adityabirla.com


Aditya Birla Group is a privately held multinational corporation engaged in diversified

businesses. The company has a presence in 25 countries, including India, the UK,

Germany, Hungary, Brazil, Italy, France, Luxembourg, Switzerland, Australia, the US,

Canada, Egypt, China, Thailand, Laos, Indonesia, Philippines, Dubai, Singapore,

Myanmar, Bangladesh, Vietnam, Malaysia and Korea.

The company primarily operates through six subsidiaries: Grasim Industries (Grasim),

Hindalco, Aditya Birla Nuvo, Aditya Birla Retail, Tanfac Industries and Essel Mining &

Industries.

Grasim, a flagship company of the Aditya Birla Group, is engaged in manufacturing

textiles, viscose staple fiber (VSF), cement and chemicals. Its core businesses are

VSF and cement. In cement, Grasim along with its subsidiary UltraTech Cement has

a capacity of 41.6 million tpa and is one of the leading cement players in India.

Textiles Grasim has a nation-wide retail network and also caters to international

fashion houses in US and UK.

The subsidiary company, Hindalco, operates through aluminum and copper divisions.

The aluminum division's product range includes alumina chemicals; and primary

aluminum ingots, billets, wire rods, rolled products, extrusions, foils and alloy wheels.

The copper division produces copper cathodes, continuous cast copper rods and

precious metals. It also provides sulphuric acid, phosphoric acid, di-ammonium

phosphate, other phosphatic fertilizers and phospho-gypsum.

Aditya Birla Nuvo is engaged in the business of garments, viscose filament yarn,

carbon black, textiles and insulators. The company is also involved in life insurance,

mutual funds, equity advisory and investment management, application development,maintenance and enhancement solutions, customer relations management (CRM),

integrated marketing services, knowledge process outsourcing, non-life insurance

advisory and broking services, and apparel retail and exports businesses.



LEADING COMPANIES

India - Food Retail


Aditya Birla Retail began its activities with the 2006 acquisition of Trinethra

SuperRetail, a chain of 170 outlets based in southern India, and continued in 2007

when its own chain of MORE stores was launched. The former Trinethra stores now

also operate under the MORE banner. Aditya Birla has 640 supermarkets and four

MORE Megastore hypermarkets. The retail business employs a workforce of 11,000.

MORE supermarkets are 2,500 square feet and above, while the Megastores have a

minimum of 50,000 square feet retail space. Product lines include fruit and

vegetables, processed food, household and personal products, apparel, and in some

cases also in-store bakery, pharmacy, and other categories.

Tanfac Industries is a joint venture company promoted by the Aditya Birla Group and

the Tamil Nadu Industrial Development Corporation (TIDCO). The company

manufactures and supplies chemicals such as aluminum fluoride, anhydrous

hydrogen fluoride and sulphuric acid. The fluorine based chemicals are applied in

industries such as aluminum smelting, petroleum refining, refrigerant gases, steel re-

rolling, glass, ceramics, sugar, fertilizers and heavy water. Its specialty chemicals are

used as intermediates in the manufacture of pharmaceuticals drugs and

agrochemicals.

Aditya Birla Group's subsidiary, Essel Mining & Industries, is an iron ore mining

company that produces noble ferro alloys. The company's products include calibrated

iron ore lump, inputs for steel making through DRI / BF process, and iron ore fines,

inputs for sinters and pellets, used for making steel.

Key Metrics

Aditya Birla Group posted total revenues of approximately $7.9 billion in 2006, 14%up on the preceding fiscal year. The company does not report its retail subsidiary

revenues, and more recent consolidated group revenues are also unavailable.



LEADING COMPANIES

India - Food Retail


6.6 Apna Bazaar

Table 11: Key Facts: Apna Bazaar

Address: Post Box No. 3, Khairatabad, Head Post Office, Hyderabad500004, India

Telephone: 91 40 2323 3199, 2324 3376Fax: 91 40 2771 9641Website: www.apnabazaar.org


Apna Bazaar is a one of India’s largest supermarket chains, with 500 retail outlets

selling food, beverages, personal products, and other items. It is operated by the

Consumer Awareness and Research Society trust (CARS), which established the

chain in 1993.

The organization has its own warehouse facilities, which not only store products from

around 500 manufacturers, but also clean and package raw produce from suppliers.

Quality testing to ensure compliance with governmental AGMARK standards is also

carried out here.

Expansion is through a franchising system. Individuals are able to establish outlets of

sizes ranging from ‘Home’ to ‘Mega’, by registering as Coodinators, and paying

CARS an fee of INR 1-5 lakh (approximately $2,000 – $10,000), followed by monthly

royalties of INR10 or 2% of turnover, whichever is higher. Coordinators are also

responsible for providing retail space of the appropriate area and recruitingsupervisors and helpers. CARS for its part takes responsibility for obtaining

government licenses, delivering stock, and providing promotional materials. CARS

suggests that suitable Coordinators might include people outside the normal

workforce: women at home, the unemployed, or retired.

Apna customers must pay an annual membership fee of INR 10 ($0.21) per family.

The fees are intended to fund community projects, and also to help fund CARS

activities. Apna claims that its retail prices are 3-30% lower than the prevailing market

rates. In addition, customer members can obtain services such as legal advice. Apna

aims to have 1,000 – 4,000 members per outlet.

Key Metrics

Apna Bazaar does not publish any financial details.



MARKET FORECASTS

India - Food Retail


CHAPTER 7 MARKET FORECASTS

7.1 Market Value Forecast

In 2013, the Indian food retail market is forecast to have a value of $392.4 billion, an

increase of 48.8% since 2008.

The compound annual growth rate of the market in the period 2008-2013 is predicted

to be 8.3%.

Table 12: India Food Retail Market Value Forecast: $ billion, 2008-2013

Year $ billion INR billion % Growth

2008 263.7 11,555.6 10.60%2009 289.8 12,698.7 9.90%2010 314.3 13,772.5 8.50%2011 340.9 14,934.6 8.40%2012 366.9 16,075.7 7.60%2013 392.4 17,193.6 7.00% CAGR, 2008-2013: 8.3%


Figure 6: India Food Retail Market Value Forecast: $ billion, 2008-2013


0

50

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200

250

300

350

400

450

2008 2009 2010 2011 2012 2013

$

b i l l i o n

0.0%

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% Gr ow t h

$ billion % Growth



MACROECONOMIC INDICATORS

India - Food Retail


CHAPTER 8 MACROECONOMIC INDICATORS

Table 13: India Size of Population (million) , 2004-2008

Year Population (million) % Growth 2004 1075.52005 1093.6 1.70%2006 1111.7 1.70%2007 1129.9 1.60%2008 1148.0 1.60%


Table 14: India GDP (Constant 2000 Prices, $ billion), 2004-2008

Year Constant 2000

Prices, $ billion % Growth 2004 593.92005 647.5 9.00%2006 708.1 9.40%2007 772.6 9.10%2008 832.1 7.70%


Table 15: India Inflation, 2004-2008

Year Inflation Rate (%) % Growth 2004 2.72005 3.3 19.00%2006 6.9 111.30%2007 8.1 16.90%2008 9.2 13.50%




MACROECONOMIC INDICATORS

India - Food Retail


Table 16: India Exchange Rate, 2004-2008

Year Exchange Rate

($/INR)

2004 0.022062005 0.022672006 0.022072007 0.024182008 0.02282




FURTHER READING

India - Food Retail


CHAPTER 9 APPENDIX

9.1 Methodology

Datamonitor Industry Profiles draw on extensive primary and secondary research, all

aggregated, analyzed, cross-checked and presented in a consistent and accessible

style.

Review of in-house databases – Created using 250,000+ industry interviews and

consumer surveys and supported by analysis from industry experts using highly

complex modeling & forecasting tools, Datamonitor’s in-house databases provide the

foundation for all related industry profiles

Preparatory research – We also maintain extensive in-house databases of news,analyst commentary, company profiles and macroeconomic & demographic

information, which enable our researchers to build an accurate market overview

Definitions – Market definitions are standardized to allow comparison from country to

country. The parameters of each definition are carefully reviewed at the start of the

research process to ensure they match the requirements of both the market and our

clients

Extensive secondary research activities ensure we are always fully up-to-date with

the latest industry events and trends

Datamonitor aggregates and analyzes a number of secondary information sources,

including:

- National/Governmental statistics- International data (official international sources)- National and International trade associations- Broker and analyst reports- Company Annual Reports- Business information libraries and databases

Modeling & forecasting tools – Datamonitor has developed powerful tools that

allow quantitative and qualitative data to be combined with related macroeconomic

and demographic drivers to create market models and forecasts, which can then be

refined according to specific competitive, regulatory and demand-related factors

Continuous quality control ensures that our processes and profiles remain focused,

accurate and up-to-date



FURTHER READING

India - Food Retail


9.2 Industry Associations

Confederation of Indian Food and Trade Industry (CIFTI)Federation House, Tansen Marg, New Delhi 110001, IndiaTel.: 91 11 373 6305

Fax: 91 11 332 9714www.cifti.com

Global Food Marketing Institute655 15th Street, NW, Washington DC, 20005, USATel.: 1 202 452 8444Fax: 1 202 429 4519www.fmi.org

9.3 Related Datamonitor Research

Datamonitor Industry Profiles

Global Food Retail

Food Retail in Europe

Food Retail in Asia-Pacific

Food Retail in China

Food Retail in Japan



APPENDIX

India - Food Retail


CHAPTER 10 APPENDIX

10.1 Methodology

Datamonitor Industry Profiles draw on extensive primary and secondary research, all

aggregated, analyzed, cross-checked and presented in a consistent and accessible

style.

Review of in-house databases – Created using 250,000+ industry interviews and

consumer surveys and supported by analysis from industry experts using highly

complex modeling & forecasting tools, Datamonitor’s in-house databases provide the

foundation for all related industry profiles

Preparatory research – We also maintain extensive in-house databases of news,analyst commentary, company profiles and macroeconomic & demographic

information, which enable our researchers to build an accurate market overview

Definitions – Market definitions are standardized to allow comparison from country to

country. The parameters of each definition are carefully reviewed at the start of the

research process to ensure they match the requirements of both market and clients

Extensive secondary research activities ensure we are always fully up-to-date with

the latest industry events and trends

Datamonitor aggregates and analyzes a number of secondary information sources,

including:

- National/Governmental statistics

- International data (official international sources)

- National and International trade associations

- Broker and analyst reports

- Company Annual Reports

-Business information libraries and databases

Modeling & forecasting tools – Datamonitor has developed powerful tools that

allow quantitative and qualitative data to be combined with related macroeconomic

and demographic drivers to create market models and forecasts, which can then be

refined according to specific competitive, regulatory and demand-related factors



APPENDIX

India - Food Retail


Continuous quality control ensures that our processes and profiles remain focused,

accurate and up-to-date

food retail india 2009

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