Page 173 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes Grocery is the largest segment, picking up nearly 72 per cent of retail consumption.
Apparel accounts for nine per cent and consumer durables four per cent.
Current scenario in retailing: The key drivers of retail activity are the apparel and F&B
sectors. The organized apparel segment is expected to grow at a steady 9.5 per cent per
annum over the next 3 years, driven primarily by large domestic brands like Westside,
Wills, Lifestyle, Shoppers’ Stop, Pantaloons, Ebony and Globus. In addition to this, the
organized grocery segment has witnessed significant activity in Southern India. Stores
built on the format of Food world and Nilgiris in the south have expanded the boundaries
of grocery markets, which have so far been extremely localized.
A notable trend in the market is the development of integrated retail-cum-entertainment
centers. An increasing number of retailers are focusing on malls as opposed to stand-alone
developments. Several factors determine a retailer’s attraction towards a particular mall.
A recent survey by Knight Frank India revealed that, for a retailer, the most important
parameters in selecting a mall as a potential location are the following:

Consumer demographics
Developer reputation
Cost of leasing space
Quality of other tenants
Car parking
Support facilities

Infrastructure
Maintenance
Whilst the number of shopping malls has seen a surge in the recent past, the future
development is now focused on providing for leisure activities as well. A significant
number of multiplexes are being developed as an integral part of retail malls, along with
amenities such as food courts and video game parlors. Malls are the focus of retail expansion
in India.
Almost all of the large retailers have a presence in the city. Many of these and several new
entrants have aggressive plans for expansion into the various micro-markets of Mumbai.
Leading the pack of retailers with extensive growth plans are the department store and
apparel segments. Lifestyle, Shoppers’ Stop, Piramyd, Westside and Pantaloons are actively
looking at leasing space in what are perceived to be high traffic shopping destinations.
Apparel stores, including Provogue and Weekenders are now targeting malls for expansion
after having been present predominantly on the high street. Specialty stores have become
a fast growing segment of the retail market. Loft, the shoe store housed in the Lakeside
Mall, Powai is now considering expansion. Several furniture stores have mushroomed in
various pockets of the city.
Disposable incomes are increasing, the customer is becoming more discerning and real
estate prices are falling – these are the three key factors driving the growth of the retail
industry in India. Studies indicate that organized retail will grow from a mere 2 per cent
of the total retail industry to a significant 20 per cent by the end of the decade. This is not
surprising, considering that the organized retail sector is growing at the rate of 8.5 per
cent per annum. The size of the organized retail industry has been estimated at ` 19,500
crore ($ 4.24 billion) in the last financial year.

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