Page 8 - DMGT550_RETAIL_MANAGEMENT

Unit 1: Introduction to Retailing

Retailing consists of the sale of goods or merchandise from a fixed location, such as a department Notes
store or kiosk, or by post, in small or individual lots for direct consumption by the purchaser.
Retailing may include subordinated services, such as delivery. Purchasers may be individuals
or businesses. In commerce, a retailer buys goods or products in large quantities from
manufacturers or importers, either directly or through a wholesaler, and then sells smaller
quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at
the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary
part of their overall distribution strategy. The term “retailer” is also applied where a service
provider services the needs of a large number of individuals, such as a public utility like electric
power.



Caselet Industry Status for Retail Sector?

arely recovering from the slump in the economy, organised retailers in the country
demand that the sector should be given industry status, besides easing foreign
Binvestment norms in the forthcoming Budget. “Industry status has been a long
standing demand of the retail sector. Besides we also want a relaxation in the foreign
direct investment (FDI) norms,” Retailers Association of India chief executive officer Kumar
Rajagopalan said. Sharing similar views, Koutons Retail India chairman D P S Kohli said:
“Industry status has been a recurring demand of the retail sector for many years since only
then will the retailers be able to fully enjoy the benefits of organised financing, insurance
and fiscal incentives.”
According to industry figures, only around five per cent of the estimated over USD 450
billion Indian retail sector is currently organised. Calling for easing of FDI norms,
Rajagopalan said, “No industry in India has grown without FDI participation and for
retail to emerge as a big player, more FDI should be allowed.” Besides, he said even if FDI
norms are not relaxed in the Budget, the government must give a clarification on FII and
foreign PE funding route as there is a lot of ambiguity.
Kohli said clarity on the issue will help Indian retailers raise funds from abroad as the
global liquidity condition is showing improvement. At present, the government allows
51 per cent FDI in single brand retailing and prohibits any foreign investments in the
multi-brand segment.

Source: indianrealitynews.com

Self Assessment

State whether the following statements are true or false:

1. Retailing is the last link in the supply chain that delivers goods to the final consumers.
2. Retailing is concerned with selling of goods only to the final consumers.
3. Retailing is a part of manufacturer’s overall distribution strategy.

1.2 Functions of Retailing

Retailers are crucial players in the emerging market scenario. Large brands are running first to
get into the desired retail formats to cater to the growing middle class of India. Retailers perform
various functions like providing assortments, sorting, breaking the bulk, rendering services,

LOVELY PROFESSIONAL UNIVERSITY 3