Page 288 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Unit 14: A Review of Retailing: Environment and Operations

Materialism: There is a very definite shift in the people’s cultural value from spiritualism Notes
towards materialism. We are spending more money than ever before on acquiring products
such as air-conditioners, cars, CD players, etc. which adds to our physical comfort as well as
status.

Positive Impact of Cultural Change

In India the retail sector is one of the largest employers after agriculture. But it is highly fragmented
and chiefly consists of small independent, owner — managed shops. New formats like super
markets and large discount and department stores have started influencing the traditional looks
of bookstores, furnishing stores and chemist shops. The retail revolution, apart from bringing
in positive changes in the quality of life in the metros and bigger towns, is also bringing in slow
changes in lifestyle in the smaller towns of India. Increase in literacy, exposure to media, greater
availability and penetration of a variety of consumer goods into the interiors of the country,
have all resulted in tapering down the differences of spending between the consumers of larger
metros and those of smaller towns. However, the supply of quality real estate space would be
instrumental in propelling the future growth momentum of the retail sector in India. The
addition of better and affordable retail space would enable retailers to distribute more better-
quality products and services to the consumers. For the retail sector to accomplish more growth,
the increase of organized retailing has to become a countrywide phenomenon. The growth of
the organized retail industry in the country will mean thousands of new jobs, increasing income
levels and living standards, better products, and services, a better shopping experience, and
more social activities.
Table 14.1: Retail Trade in India

2005 2006 2007 2008 2009 2010
Retail trade
Retail sales (` bn) 15,409 17,360 19,465 21,715 24,215 27,107
Retail sales (US$ bn) 349.4 385.8 421.3 467.0 516.3 564.7
Retail sales volume growth (%) 6.0 7.5 7.7 6.9 6.8 7.3
Retail sales US$ value growth (%) 13.6 10.4 9.2 10.8 10.6 9.4
Clothing, cosmetics & household goo.
Clothing, sales value (US$ m) 58' 32 "1 8 74 1 84'72 4 96 1 '7 1
Perfumes & fragrances, sales value (US$ m) 2,103 2,291 2,464 2,696 2,941 3,169
Electronic & domestic appliances
Television sets (stock per 1,000 population) 91 94 97 101 109 118
Television sets, sales volume ('000) 8,867 9,436 10,029 10,655 11,204 11,795
Cable-TV subscribers (per 1,000 population) 28 29 30 31 32 33
Personal computers, sales volume (000) 693 789 894 1,026 1,178 1,352
.
Refrigerators, sales volume ('000) 4,230 4,626 5,048 5,505 5,996 6,542
Video recorders, sales volume (000) 121 121 125 127 128 129
.

The retail sector in India is undergoing substantial growth and development, driven by the
impact of rising incomes, increasing urbanisation, low interest rates, greater brand competition
and a youth-driven culture. Retail sales grew by 10.5% in rupee terms in 2005, equivalent to a
volume rise of 6%. Retailing is undergoing a structural shift in India, as supply slowly moves
from small, family-run shops to larger, organised retail outlets. The rising number of attractive
stores and foreign brands, coupled with readily available credit, will support steady real growth
in retail sales of 7.2% a year between 2006 and 2010.

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