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This tracker has been compiled from external sources and does not necessarily reflect the views of the company. Links provided will take you to the full articles appended at the end of the file.

© 2008 Zenith Optimedia.

 

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39. 'Retail Sector To Consolidate In Medium Term'

11 May, 2008

 

Growing retail industry in India would see a phase of consolidation in the medium term while ill-planned malls were likely to go out of business, an official of real estate management company Jones Lang LaSalle Meghraj (JLLM) said.

 

"There is a huge potential for the retail sector in the country since India is a large economy and 97 per cent of the country's retail trade is still in the unorganised sector," JLLM Managing Director (Kolkata market) Abhijit Das told reporters.

 

With the country's economy projected to grow at a rate of nine per cent per annum, there would be gradual shift of the retail business from unorganised to organised sector, he said.

 

In spite of this, retail sector would see a phase of consolidation in the medium term. According to Das, malls which are ill-planned and of less than average standards would be under severe pressure.

 

Companies like Reliance Retail, Future Group's Big Bazaar are expanding their network in the country while new players are entering the market, he said.

 

To a query whether only big players with deep pockets would survive only, Das said that the issue was not about big or small players.

 

He said a small player with an outstanding mall in terms of design, positioning, tenant mix and value proposition would always do better than a large player with a below average mall, ill-designed and poor value proposition.

 

The sector would continue to attract investments in the next five years,he said, adding that there was no scope for deceleration in the growth of the industry in the country.

 

 

 

40. HyperCity Retail To Focus On Big Box And Multi-Channel Format

12 May, 2008

 

HyperCity Retail, part of Mumbai-based K Raheja Corp, which also owns the Shoppers Stop chain of department stores, has called off plans to launch convenience formats, ExpressCity, announced last year. The retailer is instead shifting its growth plans to focus on the big box format and multi-channel retailing.

 

Officials said it made better business sense to focus on larger formats since the profit margins in convenience formats were too low. The current crop of convenience formats, including Subhiksha, Reliance Fresh and Spencers, are struggling with the challenges of operating a low-margin grocery business in the face of spiralling real estate costs, high supply-chain costs and tough competition from the traditional formats.

 

HyperCity CEO Andrew Levermore said: “The experiment with the convenience format has been put on the back burner for now. It is clear that the HyperCity format delivers greater returns than the small formats in the retail space, so we have decided to expand HyperCity. We may revisit the small convenience format experiment at some point in the future.” Sources said huge rentals charged by property developers made low-margin businesses unviable.

 

As a result, retailers are grappling with the issue of delayed property developments and challenges of seizing the right locations at the right price. Industry players say the retail business has been impacted by spiralling real estate costs and a weak back-end and supply-chain.

 

Currently, the company is accelerating the roll-out of seven additional big format stores this year. Its maiden HyperCity store at Malad in Mumbai has completed two years and the company recently launched a multi-channel, catalogue and internet retailing format, HyperCity Argos. It had set up its first convenience format ExpressCity in Jaipur as a market tester.

 

In mid-2007, HyperCity Retail had announced plans to roll out as many as 300 smaller grocery stores in the next four years. ExpressCity was to sell vegetables, fruit and food items and the stores were estimated to be spread over 3,500-5,000 sq ft.

 

The company had announced plans to stock pre-cut and refrigerated fruits and vegetables, apart from refrigerated ready-to-cook food products and 12 meal options as well. After the test-launch in Jaipur, the original plan was to launch four additional stores and then work on a pan-India presence.

 

“Convenience stores have to be set up at prime locations and be accessible to consumers who are in any case used to the mom and pop formats which offer efficient and quick deliveries. Given the current property rates, it may not have been feasible for HyperCity to operate such stores profitably without getting the locations right,” a source said.

 

 

 

41. Upmarket Spencer's Eyes 250 New Stores

10 May, 2008

 

RPG Group company Spencer’s Retail, a multi-format retailer, plans to reposition itself as an upmarket brand with increased focus on fashion, food and home decor. Besides, the company would invest close to Rs 1,500 crore to open 250 new retail outlets this year. Presently, Spencer’s operates 400 stores under different formats, such as supermarkets, hypermarkets and express.

 

“Fashion is a significant segment of the country’s retail industry as it has influenced lifestyle in a big way. With consumers’ new look-good and feel-good attitude, fashion offers huge potential to tap the untouched markets,” said RPG Enterprises vice-chairman Sanjiv Goenka at the launch of the two new hyper stores at Ghaziabad and Gurgaon on Friday.

 

The company is also in talks with various international retail players to set up joint ventures across different categories in the country and is targeting a turnover of Rs 1,800 crore by end of the current fiscal.

 

Spencer’s new stores will retail a wide range of formal wear, casual wear, evening wear and sport wear for men, women and children.

 

The company would also offer a separate apparel range under its private labels such as Mark Nicolas, Notting Hill, Island Monks and Asankhya introduced recently. Besides, variety of merchandise would be made available across food and non-food categories apart from latest electronic gadgets, gizmos, homecare and home-decor items.

 

On the investment plans, Mr Goenka said, “We would invest Rs 1,500 crore across different formats within a year to open additional 250 stores. The company’s total retail space would go up to 22.5 lakh sq ft by March 2009.”

 

 

 

42. Retailers On Catalogue Blitz To Increase Footfalls

21 April, 2008

 

As retailers in India look at ways and means to garner more footfalls, catalogues are slowly emerging as a force multiplier to the marketing initiatives undertaken by various formats. Catalogue marketing, though in its infancy, is seen as an effective marketing tool for formats to target audiences beyond the restricted catchment area. Thus players like Croma, Big Bazaar and Hypercity have initiated catalogue marketing programmes with an eye to increase not only brand visibility but also offtake of certain categories.

 

Big Bazaar will shortly launch a customised catalogues of what’s on offer within a particular store. Big Bazaar CEO Rajan Malhotra says that the format will be launching the catalogues across 50-55 stores in smaller towns and cities. “Catalogues are add-on media and we think it works best within a particular catchment or city,” he says.

 

Ajit Joshi, CEO, Infiniti Retail, which runs Croma, says that catalogues reduce the transaction time on the floor. “The purchases are family-oriented and evenings are the peak time at our stores. So, catalogues enable one to exactly zero in on the desired item to take a look before purchasing it,” says Mr Joshi. So for purchasing a LCD or a washing machine, which may take about 45 minutes on the floor, catalogues help reduce transaction time, which means fast turnaround during peak hours. Croma brings out a catalogue every alternate month, with offers on around 200 products for a specific period.

 

Catalogues, as a promotional tool, offers two benefits — it helps create brand recall and allows retailers to promote certain offers and promotions for products. “It helps in advertising new product range on offer and services like extended warranty schemes,” explains Mr Joshi. Hypercity used catalogue to good use when it started operations way back in 2006, says Hypercity CEO Andrew Levermore.

 

“By using catalogues, retailers can eliminate catchment limitations and hope to cater to a bigger audience,” says AT Kearney principal (consumer & retail practice) Hemant Kalbag. Big Bazaar had initiated catalogue programme some years back, but discontinued it as the format grew bigger and using mass media became a viable option. “But now promotional effort is also necessary. It complements our mass media activity. Catalogues help in local area activation as the categories within a store has grown with a lot more SKUs added than before,” explains Mr Malhotra.

 

Typically, catalogues are distributed as newspaper inserts, stocked within the store or distributed in and around the catchment area. But using a blanket bombing approach to distribute them often doesn’t lead to desired results. What’s needed is a more focussed approach where retailers can use their existing database and customise accordingly.

 

“For any retailer with a large customer loyalty scheme database, mailing these leaflets to this base is very effective. Newspaper inserts are helpful if you want to target a specific customer profile. The worst results in our case come from a blanket delivery of leaflets into an area,” says Mr Levermore.

 

There are possibilities of creating synergy between catalogues and other mediums like phone-ins and internet, but in India it is still sometime away. “When it involves high-ticket purchases, customers still want experience the product before purchasing.

 

Certain consumer segment, as the market evolves, can look at phone-in or internet after browsing through the catalogue,” explains Mr Kalbag. In the Indian retailing arena, trial and error is the norm. Looks like catalogue marketing will also go through stages of evolution as well in the time to come.

 

 

 

43. Marks & Spencer, Reliance Retail Announce JV In India

18 April, 2008

 

Britain's clothing and food retailer Marks & Spencer will set up of a joint venture firm with Mukesh Ambani-led Reliance Retail at an investment of 29 million pounds (around Rs 230 crore) to mark its foray into India.

 

The British company will hold a 51 per cent stake in the JV, to be named Marks and Spencer Reliance India Pvt Ltd, while the remaining will be with Reliance Retail.

 

"India is a very exciting opportunity for Marks & Spencer and a market where there is the potential for M&S to become a major retail brand. Reliance Retail is the ideal partner for us to accelerate our expansion and create the opportunity to open much bigger M&S stores," Marks & Spencer Chief Executive Stuart Rose said in a statement.

 

The new joint venture will have the right to operate Marks & Spencer stores in India, selling items such as homewares and clothing for women, men and children. It will aim to open at least 50 new stores in the country over the next five years.

 

Planet Retail, Marks & Spencer's existing franchise partner in India, will continue as a franchisee in respect of the 14 existing stores.

 

The announcement is part of Marks & Spencer's plans to grow its international business to 15-20 per cent of group revenues within the next five years.

 

The Chief Executive Officer of Marks and Spencer Reliance India Pvt Ltd will be Mark Ashman, while Chief Financial Officer will be Jatin Luthra.

 

"M&S is a very well respected brand globally. At Reliance, we have always strongly believed in the power of the Indian consumer market," Reliance Industries Chairman Mukesh Ambani said.

 

 

 

44. Bharti Retail Opens Its First Store 'Easy Day'

16 April, 2008

 

Bharti Retail Ltd, a subsidiary of Bharti Enterprises, has launched its first food and grocery stores ahead of the roll-out of its wholesale centres that are being set up with Wal-Mart Stores Inc.

 

Bharti Retail said on Wednesday it had opened three Easy Day stores selling groceries, personal care and household products in Ludhiana in western Punjab state. Bharti Retail aims to spend $2.5 billion by 2015 in multiple-format stores including hypermarkets and supermarkets, that will compete with Pantaloon Retail India Ltd, the Aditya Birla Group, RPG Group and Reliance Industries.

 

Bharti Enterprises also has an equal venture with Wal-Mart for wholesale cash-and-carry and back-end supply chain management. The venture will launch the first store by the end of 2008 and aims to open 10 to 15 centres over seven years. The high cost of real estate was a challenge, Managing Director Rajan Mittal told Reuters recently.

 

The Easy Day neighbourhood stores, measuring 2,500 to 4,500 sq. ft., were offering jobs to vendors of fruits, vegetables and meat, as well as to housewives and retired people, Bharti Retail said in a statement. "These initiatives will help facilitate inclusive growth in communities in which its stores operate," it said.

 

It may also help mitigate concerns about job losses from the growth of modern retail in India, where only about 3 percent of the retail industry is in the hands of large companies. The tightly-controlled industry, estimated at about $350 billion, is forecast to nearly double in size by 2015.

 

Foreign multiple-brand retailers are currently only allowed wholesale and franchise operations in India. Germany's Metro AG and Shoprite Holdings have wholesale centres, while France's Carrefour and Tesco Plc are also in talks for similar deals.

 

Bharti Opens Its First Retail Store ‘Easy Day’

16 April, 2008

 

Bharti Retail, a subsidiary of Sunil Mittal-promoted Bharti Enterprises, on Wednesday launched its operations by opening first store in Ludhiana, Punjab.

 

The stores, known as 'Easy Day', would be a one-stop shop to cater to every family's day-to-day needs, company officials said, adding that "it will bring together a relevant and wide product range, good quality products and great-in-experience and service-all under one roof".

 

The store would sell personal care products, stationary, household articles, hosiery items, daily-need groceries like staples, processed foods, bakery and diary products, meat and poultry, and fresh produce.

 

The company had earlier announced an investment of up to 2.5 billion dollars (Rs 10,000 crore) by 2015 in retail operations including multi-format retail outlets across all cities in India that have population of over one million.

 

Announcing the road map for its retail ventures in 2007, Rajan Mittal, Joint Managing Director of Bharti Enterprises, had said that Bharti was looking at approximately 10 million square feet of retail experience throughout the country and employing about 60,000 people.

 

Wednesday's launch is exclusive from Bharti's proposed joint venture with US retailer WalMart for the back-end operations.

 

Bharti-WalMart joint venture is likely to kick off its cash and carry (wholesale) business in the third quarter of 2008.

 

Under this, the two would sell products only to other retailers and not directly to the consumers, as this is not allowed under the existing guidelines.

 

In its Ludhiana store, Bharti has employed people from the local communities and employees at the outlet have been provided intensive and structured training by Bharti Academy of Retail, which has been set up by Bharti Retail.

 

So far the academy has trained about 1,800 people.

 

 

 

45. Get It Started In Here, Says The New Shoppers Stop

28 April, 2008

 

Shoppers Stop has undergone a rejuvenation: a new logo, a new base line, new uniforms for its staff, an anthem and a whole new philosophy.

 

Shoppers Stop as a brand has been growing since its inception in 1991. The kind of merchandise that is on sale, too, has seen change. Starting with Indian brands, they brought in international brands, now they’ve even pulled in luxury brands. The changes were brought about because it was felt that the Shoppers Stop consumer has changed drastically, and so it was necessary to change the way the brand is perceived.

 

Ravi Deshpande, chief creative officer, Contract Advertising, which is the brand’s creative agency, says, “The time has come to cut down the age of the brand, start connecting with the youth, look more contemporary, and start looking more relevant to the times.” He continues, “We thought it required a brand idea that has a good and strong philosophical bent, where the idea goes beyond the rationale.”

 

The newly evolved brand idea prompts the consumer to do, to “start something new”. Shoppers Stop hadn’t planned on changing its earlier baseline, ‘Shopping. Think Beyond.’ The ‘Start Something New’ idea was suggested by Deshpande, who thought that “the earlier baseline was quite nebulous”.

 

Shopping is a treat. It makes you feel like a new person. Contract felt that this could be made into an idea like “start something new”, so that life is looked at completely differently, something as different as responding to the environment and its issues, saving trees, recycling, being a child again, or just doing nothing. All of this with a fashionable twist to it. The print ads bring the idea out in sharp relief.

 

The TV commercial for the first campaign for Shoppers Stop, ‘Feel the Experience while You Shop’, was shot by Deshpande himself. He couldn’t shoot the latest TVC because of other commitments. The brand has largely depended upon print and outdoor to carry forward this premise and this campaign, with its two TVCs, is coming out around nine years after the first TVC for the brand was aired.

 

In the context of the TVC, Contract has tried to look at simple things. “When you remind people about the nicer things in life, they feel grateful towards the brand,” says Deshpande. The idea was to take those insights and make them part of the film. In the print ad, the brand looks at a planet friendly idea while still endorsing high fashion. The print and TV campaigns are in black ad white as is the tradition at Shoppers Stop.

 

Of the two TVCs, the first one, shot in and around Bangkok by Australian director Jeff Balsmeyer, relives the moments of childhood that we let go of once we’re adults. Moments like running after a butterfly; tossing flat stones in a lake; climbing trees and dancing on a crowded road without embarrassment. The shot ends by asking the viewer, ‘When was the last time you were a child?’

 

The second TVC, which has an original composition written and sung by Malobi Dasgupta, writer at Contract, has a family enjoying themselves on a beach. Without a worry, without a care in the world. Living the beautiful things in life, doing nothing. The ad ends saying, ‘Enjoy Doing Nothing’.

 

The ads don’t exactly tell you to go out and shop, but they have an underlying subtle message. “Shoppers Stop can now afford to say something big and powerful that will grow to become a philosophy, much like Nike and how it is much beyond just shoes,” says Deshpande.

 

The print ads, too, take the ‘Start Something New’ baseline a little further. Saving the environment and yet being stylish is the underlying theme. One of the print ads says, ‘Wear a short skirt. Hitchhike. Conserve fuel.’ The print ads were shot in Cape Town, South Africa, with seems to be a favourite destination these days with the ad fraternity.

 

The TVCs have been produced by MAD Films. The creative team involved in the copywriting and art direction include Malobi Dasgupta, Kapil Sawant, Raj Nair and Mangesh Rane, along with Deshpande. The music has been scored by Zubin.

 

 

 

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