FDI in Retail - Shutters down in Cuttack - New Federation in Bangalore
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Jan 16, 2008, 12:30:28 PM1/16/08
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Dear Friends,
India FDI Watch campaign organized a seminar in Bangalore on National
Policy on retail Trade on 1 January, 2008. Retailers also decided to
form its federation to take on the retail giants. On 4th January,
traders and hawkers call for shutter down in Cuttack (Orissa) evoked
spontaneous response. Shops and business establishments at almost all
places remained closed as the city wore a holiday look throughout the
day.
While all the major commercial zones as Badambadi, Buxi Bazaar,
Mangalabag, Dolmundai, Ranihat, Choudhury Bazaar were closed, the
vegetable market Chhatra bazaar and commodities mandi Malgodown also
did not function. On the other hand, French retail giant Carrefour is
reported to move closer to enter into a partnership with Reliance.
With Best Wishes!
Dharmendra Kumar
Director, India FDI Watch
M-09871179084
Email:dkford...@yahoo.co.uk, dkford...@gmail.com
Demand for national policy on retail trade :
http://www.hinduonnet.com/2008/01/02/stories/2008010259870500.htm
Bangalore: The Centre should frame a national policy on retail trade
that will impose restrictions on large corporates, demanded speakers
at a seminar here on Tuesday.
The policy should give local stakeholder committees -- comprising
traders, workers and administrative authorities -- the power to issue
licences to open retail outlets and withdraw them in case of
violations, said K.N. Umesh, State Secretary of Centre of Indian Trade
Unions (CITU). There should be guidelines on where such outlets can be
opened, how much space they can occupy and what products they can
sell, he added. He pointed out that even in developed countries big
malls and retail chains are not opened in central parts of the city.
Vinod Shetty, coordinator of India FDI Watch, said that opening up the
retail market to big corporates affects the livelihood of over 4 crore
people in India, including traders, transporters, daily wage workers
and street vendors. Destroying livelihoods to favour big business
houses was a grave human rights violation, he added.
Bandh call evokes spontaneous response :
Friday January 4 2008 12:00 IST - Express News Service
http://www.newindpress.com/NewsItems.asp?ID=IEQ20080103233730&Page=Q&Title=ORISSA&Topic=0
CUTTACK: The traders' opposition to the opening of retail stores by
Reliance was evident as the shutter down call given by different
traders' bodies evoked spontaneous response in the City on Thursday.
Shops and business establishments at almost all places remained closed
as the city wore a holiday look throughout the day. While all the
major commercial zones as Badambadi, Buxi Bazaar, Mangalabag,
Dolmundai, Ranihat, Choudhury Bazaar were closed, the vegetable market
Chhatra bazaar and commodities mandi Malgodown also did not function.
The traders staged a demonstration at the office of the district
collectors demanding Reliance's withdrawal from the retail sector. The
company should not be allowed to open its Reliance Fresh stores in
different neighbourhoods and sell commodities and other essential
items as it would have a serious impact on the local traders and
vendors. They alleged that the administration had gone back on its
promise of not allowing to open its stores in Cuttack without
discussions with the local traders community and getting their
approval, Small Business and Street Vendors Association president
Subash Singh said.
Reliance Retail, incidentally, has planned to open eight Fresh outlets
in the City. Of them, it recently opened two at Mahanadi Vihar and CDA
Markat Nagar. While the traders' opposition has forced the Mahanadi
Vihar outlet to close, the CDA one is functioning. The administration
is yet to convene a meeting with local traders, they alleged. They
have expressed fears that the stores would eat into the business of
local traders and vendors to such extent that many would be rendered
without livelihood. The street vendors and the neighbourhood ration
shops would be the worst sufferers.
They have also called for setting up of vending zones in the city for
street vendors before intensifying the eviction drive and harassing
small businessmen under the new Police Commissionerate system.
Carrefour may partner with Reliance in retail :
http://economictimes.indiatimes.com/News/News_By_Industry/Services/Retailing/Carrefour_may_tango_with_Reliance_in_retail/articleshow/2673244.cms
NEW DELHI: French retail giant Carrefour has been trying to enter the
Indian market for a while with little success so far. Numerous
attempts to enter into partnerships with Indian companies have gone
nowhere. But for two weeks now, industry has been abuzz with talks of
a possible deal between two giants -- the French retailer and Mukesh
Ambani's Reliance Retail. The trigger was a recent meeting between
Carrefour's top team and a few executives from Mukesh Ambani's office.
Sources also indicated that a top Reliance team led by Mr Ambani's
close associate Manoj Modi is likely to go to France for further
talks. "If it happens, it will be a global alliance. But these things
take very long time to materialise," said sources
Buddhadeb defends corporates' retail entry :
http://www.thehindubusinessline.com/2007/12/29/stories/2007122951890100.htm
Kolkata, Dec. 28 The West Bengal Chief Minister, Mr Buddhadeb
Bhattacharjee, on Friday defended entry of corporate houses in retail,
saying, "if we want a market mechanism, we must allow corporate houses
in retail, though slowly and cautiously."
Addressing the annual general meeting of the Bengal Chamber of
Commerce & Industry here, Mr Bhattacharjee indicated that his
Government was trying to work out a compromise formula to obtain the
benefits of modern market mechanism without sacrificing employment
opportunities.
Conceding that the entry of big corporates might throw a number of
people out of jobs, mostly old time intermediaries between farmers and
consumers, he said, "we're examining how to protect them."
Retail, real estate poised for 35% and 45% growth in `08: ASSOCHAM :
http://www.indiainfoline.com/news/innernews.asp?storyId=55088&lmn=1
Organized and unorganized retail size in 2007 was estimated at US
$330bn which is likely to increase up to US$365bn in 2008 and further
reach the size of US$440bn by 2010
Retail and real estate boom will spill over down into 2008 as these
two key sectors are well poised to register a year-on-year growth of
30-35% and 40-45% respectively over the calendar year 2007, according
to projections made by the Associated Chambers of Commerce and
Industry of India (ASSOCHAM).
In calendar year 2007, the retail sector ended up with a growth rate
of 25-28% as against 35-38% for the real estate sector. Organized and
unorganized retail size in 2007 was estimated at US$330bn which is
likely to increase up to US$365bn in 2008 and further reach the size
of US$440bn by 2010. Releasing the assessment, the ASSOCHAM President,
Venugopal N. Dhoot said that of total US$330bn, retail industry size
in calendar 2007 particularly in its organized retail segment is
around less than 5% which works out to be slightly more than US$16bn.
The organized retail occupied a space of 1 million sq. ft. in the year
2002, which shot up to nearly 14 million sq. ft. by calendar 2007 and
in 2008, the space occupation in the organized retail sector is likely
to be 16 million sq. ft. as retailers like Reliance, Plaza, DLF,
Spenser and even Aditya Birla Group more would witness their major
expansion drive in retail sector in calendar 2008, pointed out Dhoot.
As per estimates made by ASSOCHAM, the organised retail segment would
witness an additional investment of US$ 70bn by 2010 and in 2008
especially, the investment size would be around US$ 25-28bn as the
Chamber has projected retail growing between 30-35% in next 3-4 years.
The ASSOCHAM Chief also said that in 2007-08 fiscal, total retails,
contribution to national GDP is estimated between 8-10% which would
further jump up to nearly 12% in next few years. By 2010, retails
contribution to national GDP in totality is likely to be 22%.
The Chamber is also of the view that India has already emerged as the
5th world's largest investment destinations globally in retail sector
because of its market and potential which is made up of India's
population base. The retail outlets most of which are in showroom
category in India are estimated around 15 million as of now, the
number of which would further multiply.
Out of 15 million retail outlets, nearly 5.5 million sell food and
retail products. The rural retail which would be in unorganized sector
even by 2010, its size would touch about US$45bn and in 2015, the
projections and estimates are made for US$65bn. In 2007, rural retail
size has been estimated at US$30bn which by 2008, is expected to be
around US$36bn.
As per ASSOCHAM estimates in 2008, 150 new malls are likely to be
added that would capture larger organized retail market size. As
regards to real estate sector, the market size is currently estimated
at US$15bn which has been growing between 35-38% in the last couple of
years as a result of which huge investments have poured into it. From
2008 onwards, the real estate sector is likely to grow between 40-45%
but witness a slow down in metros and large cities by 2010.
As a result of this, the reality sector in tier II and tier III and
even tier IV cities would make major expansion drive for providing
dwelling units to neglected lot of society. Dhoot also said that an
estimated US$ 10 billion is expected to flow into the domestic reality
sector by end of 2008. India's FDI's in retail sector account for 22%
of its total FDI's inflow which is because in India, return on real
estate investments are around 22% as against 5-6% of world's developed
market.
Currently, 100 world's lead players in real estate have already found
a footholding in Indian reality sector. The increased flow of funds
has resulted in various policy measures to check the guess of
speculative money. About 94% of capital investment being made in the
sector is in tier I cities of Mumbai, Delhi and Bangalore. As the
property in metros has become costly and money got dearer, the
developers are moving towards tier II and tier III cities.
The reality sector is likely to notch US$90bn by 2015. The demand for
both commercial and residential property is outstripping supply. Home
loans formed 11% of total outstanding credit of scheduled commercial
banks in March 2005, up from just 2.4% in March 1990. The sales value
of housing construction has witnessed an exceptional leap from
Rs176.1mn in 1991 to Rs41.82bn in the year 2006. Housing loans grew at
an average rate of 47.68% during 2000-01 to 2004-05, subsequently
slowing down to an average of 27.85% IN 2005-06 and 2006-07.
Now, farmers' malls to take on retail biggies :
http://timesofindia.indiatimes.com/India/Now_farmers_malls_to_take_on_retail_biggies/articleshow/2665710.cms
PUNE: Farmers from Pune have ensured that they are not left behind
while making New Year resolutions, and that too, in keeping with the
times.
They have jointly resolved to take on retail biggies like Reliance
Fresh, Bharti, Subhiksha, More and Spencer's by establishing farmers'
malls beginning 2008.
On December 26, members of about 15 fruit and vegetable producers'
associations in Maharashtra gathered here to discuss the idea of a
farmers' mall. Officials of the Maharashtra State Agriculture
Marketing Board were also present.
"We are not opposed to free market, but we want to take up the
challenge. If private companies can establish malls to sell products
by farmers, why can't farmers sell their own products directly?" said
Sopan Kanchan of Grape Growers Federation of India.
Reliance Retail taste for dairy :
http://www.telegraphindia.com/1080103/jsp/business/story_8735637.jsp
New Delhi, Jan. 2: Reliance Retail is in talks with several food
manufacturers in India to enter the dairy business. It is looking at
several options, including acquisitions, buyouts, leasing and capacity
sharing.
Last month, Himalaya International signed an agreement with Reliance
Retail, which will sell Himalaya's products in the domestic market.
Sources from Reliance Retail said, "We will soon be sourcing yogurt
and flavoured milk from Himalaya International. We will also be buying
cheese from them for our stores."
Reliance has also started pilot projects in Punjab and Andhra Pradesh
where it is buying milk directly from farms. The milk is sold under
the Dairy Pure brand name at its Reliance Fresh outlets. It may expand
this project to other states at a later date.
Reliance is also planning to source other dairy products such as
butter, cheese, paneer, ice cream and flavoured yoghurt. However,
Reliance officials said, "We are in no tearing hurry to expand. We
plan to roll out the milk brand in a phased manner across the
country."
The national plans of Reliance Retail include launching three variants
of milk -- family milk, low fat and whole milk. It would also diversify
into a range of value-added dairy products.
The company plans a milk procurement target of 1 crore litre per day
over the next four years, when its retail stores are rolled out across
the country.
Reliance Retail is going to set up a number of farm hubs all over
India. Both the farm products and milk will be brought to these hubs
before being processed and sent to retail outlets.
Mukesh Ambani, chairman and managing director of Reliance Industries,
had earlier indicated that the retail venture would invest up to Rs
25,000 crore and aim at a sales target of Rs 100,000 crore over the
next four years. However, officials refused to place a figure on the
amount to be invested in the dairy business.
Tata Group eying food retail business :
http://www.ndtvprofit.com/homepage/storybusinessnew.asp?id=42531&template=&cache=1/2/2008%2010:31:46%20AM
The Tata Group is planning to launch a mid-price range food retailing
business offering below Rs 100 meals to cater to the growing urban
market.
The company terms the urban market as a segment clearly untapped and
dominated by the unorganised sector. This has tempted the group for
the second time entry into the food retailing business.
It is Tata Group's re-entry in the mid-range food retailing space
after it burnt its fingers with Barista and sources say that the
bitter Barista experience will come in handy this time.
Clearly, there is more to this business plan than just selling meals.
The venture has direct synergies with the group's focus on health
drinks business, which is presently being built through Tata Tea.
As the group unleashes its international drinks portfolio in India
build-in through foreign acquisitions, this venture will immediately
offer its ready distribution network across the country.
While the sources maintain that plans are still on the drawing board,
one thing is clear from Ginger Hotels to St James Court that Rata Tata
wants to make his presence felt across hospitality value chain and
health foods for the urban Indian.
FDI a no-no, but local retailers in overdrive mode during 2007 :
http://indiapost.com/article/techbiz/1722/
NEW DELHI: Government's plans to open up the retail sector for foreign
firms remained in cold storage this year, while domestic companies
strengthened their foothold in the sensitive industry despite
agitation by smaller traders.Although political opposition stopped the
government from allowing greater foreign investment, yet the world's
biggest and second-biggest retailers Wal-Mart Stores Inc of the US and
French firm Carrefour found a way out to establish their presence in
the 330-billion-dollar lucrative industry.
The action-packed year, however, began on a wrong note for global
players wanting to enter India with UPA Chairperson Sonia Gandhi
expressing concerns over the government's foreign direct investment
policy in retail. In a letter to Prime Minister Manmohan Singh, she
asked the government to address issues raised from many quarters on
the impact of these supermarket chains on the livelihood of small
stores.
While this was music to the ears of opponents of FDI in retail,
especially the Left parties, the commerce ministry pressed ahead with
plans to increase FDI limit to 51 per cent in specific categories like
electronic goods and sports items although the Cabinet note in this
regard is yet to be cleared.
The government is expected to examine FDI in multi-brand products only
after it receives reports from Indian Council for Research on
International Relations and the National Council for Applied Economic
Research. Currently, 51 per cent FDI is allowed in only single brand
retailing.
"The year has been a mixed one for the retail industry there were not
much progress on further relaxation on FDI policy and the 'big vs
small' debate has taken a larger political shape," Asitava Sen, KSA
Technopak's vice-president of retail and consumer goods, said. MORE
PTIPioneer of organised retail in India, Kishore Biyani's Future Group
carried on with its expansion plans aiming revenue of Rs 30,000 crore
by 2010. The Group announced a new format, KB Fair Price Shops, on the
lines of local kirana stores, a clever move to prevent any protests.
The sector also attracted other homegrown corporates. These included
tractor-to-software group Mahindra & Mahindra, realty firm Parsvanath,
two-wheeler maker Hero Group. Aditya Birla group acquired Andhra
Pradesh-based Trinethra Super Retail Ltd, while rumors were also
afloat about Subhiksha promoters selling a stake in the southern India-
based firm.FMCG major Dabur also set up a subsidiary to run its
branded stores with an initial investment of Rs 140 crore for opening
retail stores to sell health and beauty products.
RPG Group-owned Spencer's embarked on a new branding strategy and trim
the number of its current retail formats, with plans to invest up to
Rs 2,500 crore till March 2009.Besides, private equity investments and
public issues gained momentum and M&A activities picked up during the
year.
Indiabulls Wholesale Services, the retail arm of Indiabulls Real
Estate acquired 63.92 per cent stake in Piramyd Retail at an
enterprise value of around Rs 208 crore. On the other hand, some
retailers like Koutons and Vishal Retail came out with initial public
offers to fund their expansion activities."PE and IPOs will fund
growths in the sector.
On the back of the huge growth in organized retail, investments in the
sector are likely to increase from USD 3 billion in 2006 to over USD
25 billion by 2010," Ranjan Biswas, E&Y partner and national leader
for retail and consumer practice, said.
India : Organized Retail - The year that was :
http://www.fibre2fashion.com/news/daily-textile-industries-news/newsdetails.aspx?news_id=47342&page=1
2007 was a trail blazing year for the Indian retail Industry. The
who's who of corporate India joined the retail bandwagon in the year
gone by. Among them were the Bharti's of Airtel who tied up with the
retailing giant Wal-Mart with revenues of more than US $ 350 billion,
the Aditya Birla Group with many more in the Q who are willing to
invest substantially to grab a piece of the Rs3,50,000 lakh retail
cake.
The veterans of the industry like the Future Group have consolidated
their positions by opening more stores and entering new verticals like
home solutions as well as consumer durables. The future group has more
than 25 retail formats, including JVs catering to a wide consumption
space with more than 1000 stores across India.
The group will increase its footprint from present 7 million square
feet to over 13 million sq. ft of retail space. This will mainly see
the expansion of present flagship formats but will also include some
new formats.
Reliance Retail, which faced stiff resistance from a few states, has
put behind the same and is aggressively adding stores across the
country and entering newer verticals like branded apparels, tying up
with luxury brands across the globe along with venturing into the
promising wholesale business.
Reliance has 9 formats across India which includes Reliance hyper
markets, Reliance Fresh, Reliance Super, Reliance Mart, Reliance
Digital, Reliance Trendz, Reliance Footprint, Reliance Wellness,
Reliance Jewels and Reliance Timeout.
International cuisine pushes retailers' margins :
http://timesofindia.indiatimes.com/Business/India_Business/International_cuisine_pushes_retailers_margins/articleshow/2681793.cms
BANGALORE: What's for dinner tonight? If someone asked Sandhya Iya
(45) that, the answer would as easily be pasta or pizza as it would be
dal or sambhar. "At least once in ten days, I wind up making au
gratins, Chinese noodles or macaroni, since my son Anurag (14)
relishes it," says the HR consultant. Iya stocks up on cheeses, salsa
and Italian sauces from the neighbourhood FoodWorld and FabMall and
picks up coloured peppers, babycorn and mushroom from Reliance Fresh.
There's a growing urban population that's integrated international
cuisine as part of their daily diet and from food companies to
retailers, everyone's cashing in.
"There are an increasing number of people who're travelling abroad
more often at a much younger age. This group has higher disposable
income and higher aspirational living. Change in diet is one of the
first few reflections of this," says Vineet Chabbra, MD-group CEO of
Global Green, which runs the Tify brand of products like salsa, salad
dressings and relishes.
There are few companies like Global Green that started out growing and
packaging gherkins, pickled cucumbers and the like for international
retailers, but discovered tremendous potential in the domestic market.
"The Indian market forms only 1% of our business, but it's phenomenal
growth rate makes it significant," Chabbra says.
There's a slew of Indian and international brands entering the market
-- AVT Natural Products' Santa Maria range of Mexican spices and foods
compete with imported variants of taco shells and nachos, ITC Foods'
Sunfeast pasta fights for shelf space with Barilla and McVities and
Oreo are taking on Britannia and Parle.
Urban professionals in the age group of 25 to 40 years, expats,
returned NRIs or the homemaker in your neighbourhood who wants to try
out the latest Sanjeev Kapoor recipe -- the market for exotic,
international cuisine is a varied one.
For retailers -- particularly those in the premium segment -- this
widening of the palette couldn't have been timed better.
Food retailing has traditionally been a low margin business with
margins in the fresh section being as low as 5% to 7% and groceries
touching 10%. International cuisine and brands come at much higher
margins -- roughly 25%-30%.
"Exotic vegetables -- defined as those which are not traditionally used
in our cuisine -- form at least 15% of our fresh section at Food
Bazaars. In upmarket neighbourhoods, that percentage is higher," says
Arvind Chaudhary, CEO (food business), Future Group. "Celery, basil,
leek, broccoli, avocados and passion fruits are all very popular with
our customers. Mushrooms and lettuce aren't even considered exotic by
customers anymore." Exotic food is set to play a much greater role in
the group's Gourmet Food Bazaar.
An extensive cheese section, a wide range of wines and imported
variants of every other product from cookies to cereals and sauces to
squashes are commonplace at most food retailers and hypermarkets.
Spencer's conducts international food festivals with live chef
sessions at their Gurgaon and Mumbai hypermarkets in association with
foreign embassies. "The festivals are a huge hit with our customers
and helps foster loyalty. They're also a great way to educate our
customers on how to use the ingredients available in our store to
conjure up interesting recipes," says Samar Sheikhawat, VP
(marketing), RPG Retail.
The Indian audience takes to cuisine closer to native palette or which
can be made closer to native cuisine. "Salsa is like a tomato chutney
with onions, Chinese noodles is Indianised with vegetables and even a
jeera seasoning, Mexican refried beans are a different version of
rajma and mushrooms are used in pav bhaji," says an industry expert.
"If the urban SEC A and B+ audience looks for authenticity, the small
town audience looks for Indianess in foreign items. So although the
market may be considered niche, it's huge and will be a major profit
driver in the next three to five years."
Is Carrefour in a bind over India ? :
http://www.dnaindia.com/report.asp?newsid=1142718
Chain says talks are on with partners, there's no change in plan
NEW DELHI: Is Carrefour finding it tough to arrive at a viable
business model for India?
Late last year, the world's second-largest retailer had set up two
separate companies in India.
While Carrefour Wholesale Cash & Carry, as the name suggests, was for
its cash-and-carry business, Carrefour India Master Franchise Company
was set up to lend the Carrefour banner, technical services and
knowhow to an Indian company for direct-to-consumer retail.
Carrefour had indicated that while both formats would commence
operations only in 2009, the company was close to signing on a
strategic partner.
But with several potential partners walking away from negotiations in
the last few months, Carrefour's plans to partner an Indian biggie for
the consumer-facing retail venture may have been delayed.
Among the parties the Carrefour team has held (unsuccessful) talks
with are real estate developers Parsvanath and DLF; and business
houses of Nusli Wadia, Mukesh Ambani and AV Birla. But Herv Clec'h,
managing director of both the Indian entities, told DNA Money from
France that "there is no change in strategy for India".
A company spokesperson based in New Delhi said negotiations were on
with several potential partners but no decision has been reached as
yet.
As per existing policy, Carrefour does not require an Indian partner
to begin wholesale cash-and-carry business, but to enter front-end
retail, it needs to partner with an Indian company since no foreign
direct investment (FDI) is allowed in multi-brand retailing.
A retail industry expert points out that despite having a senior team
of people stationed in India for the last four years, Carrefour has
been unable to come up with a clear strategy.
Indian retail seen touching $365 b in 2008 :
http://sify.com/finance/fullstory.php?id=14582651
New Delhi: The boom in India's retail sector will continue and top
$365 billion in 2008, against $300 billion a year before, says a study
by a leading industry chamber released Monday.
With a year-on-year growth of 30-35 per cent, the retail trade sector
in India will top $440 billion by 2010, says the study by the
Associated Chambers of Commerce and Industry of India (Assocham).
"The retail industry size in calendar 2007, particularly in its
organised retail segment, is around less than 5 per cent, which works
out to be slightly more than $16 billion," said chamber president
Venugopal N. Dhoot.
He also said the organised retail players occupied a space of 1
million sq ft in 2002, which shot up to nearly 14 million sq ft by
calendar 2007.
This, he said, was likely to grow to 16 million sq ft in 2008.
Large players like Reliance Industries, Plaza, DLF and Spenser, and
new-entrant in the field, the Aditya Birla Group, would embark on a
major expansion drive in their retail businesses in 2008, Dhoot added.
The study estimated the organised retail segment would witness an
additional investment of $70 billion by 2010. In 2008, the investment
size would be in the region of $25-28 billion.
The study also estimated that that the share of retail trade in the
country's gross domestic product, currently at between 8-10 per cent,
will jump up to some 12 per cent soon and to 22 per cent by 2010.
The study also estimated that rural retail would continue to be driven
by the unorganised segment for some time, and grow to $36 billion by
2008 and top $45 billion in 2015, from the present size of $30
billion.
http://sify.com/finance/fullstory.php?id=14582408
India FDI Watch campaign organized a seminar in Bangalore on National
Policy on retail Trade on 1 January, 2008. Retailers also decided to
form its federation to take on the retail giants. On 4th January,
traders and hawkers call for shutter down in Cuttack (Orissa) evoked
spontaneous response. Shops and business establishments at almost all
places remained closed as the city wore a holiday look throughout the
day.
While all the major commercial zones as Badambadi, Buxi Bazaar,
Mangalabag, Dolmundai, Ranihat, Choudhury Bazaar were closed, the
vegetable market Chhatra bazaar and commodities mandi Malgodown also
did not function. On the other hand, French retail giant Carrefour is
reported to move closer to enter into a partnership with Reliance.
With Best Wishes!
Dharmendra Kumar
Director, India FDI Watch
M-09871179084
Email:dkford...@yahoo.co.uk, dkford...@gmail.com
Demand for national policy on retail trade :
http://www.hinduonnet.com/2008/01/02/stories/2008010259870500.htm
Bangalore: The Centre should frame a national policy on retail trade
that will impose restrictions on large corporates, demanded speakers
at a seminar here on Tuesday.
The policy should give local stakeholder committees -- comprising
traders, workers and administrative authorities -- the power to issue
licences to open retail outlets and withdraw them in case of
violations, said K.N. Umesh, State Secretary of Centre of Indian Trade
Unions (CITU). There should be guidelines on where such outlets can be
opened, how much space they can occupy and what products they can
sell, he added. He pointed out that even in developed countries big
malls and retail chains are not opened in central parts of the city.
Vinod Shetty, coordinator of India FDI Watch, said that opening up the
retail market to big corporates affects the livelihood of over 4 crore
people in India, including traders, transporters, daily wage workers
and street vendors. Destroying livelihoods to favour big business
houses was a grave human rights violation, he added.
Bandh call evokes spontaneous response :
Friday January 4 2008 12:00 IST - Express News Service
http://www.newindpress.com/NewsItems.asp?ID=IEQ20080103233730&Page=Q&Title=ORISSA&Topic=0
CUTTACK: The traders' opposition to the opening of retail stores by
Reliance was evident as the shutter down call given by different
traders' bodies evoked spontaneous response in the City on Thursday.
Shops and business establishments at almost all places remained closed
as the city wore a holiday look throughout the day. While all the
major commercial zones as Badambadi, Buxi Bazaar, Mangalabag,
Dolmundai, Ranihat, Choudhury Bazaar were closed, the vegetable market
Chhatra bazaar and commodities mandi Malgodown also did not function.
The traders staged a demonstration at the office of the district
collectors demanding Reliance's withdrawal from the retail sector. The
company should not be allowed to open its Reliance Fresh stores in
different neighbourhoods and sell commodities and other essential
items as it would have a serious impact on the local traders and
vendors. They alleged that the administration had gone back on its
promise of not allowing to open its stores in Cuttack without
discussions with the local traders community and getting their
approval, Small Business and Street Vendors Association president
Subash Singh said.
Reliance Retail, incidentally, has planned to open eight Fresh outlets
in the City. Of them, it recently opened two at Mahanadi Vihar and CDA
Markat Nagar. While the traders' opposition has forced the Mahanadi
Vihar outlet to close, the CDA one is functioning. The administration
is yet to convene a meeting with local traders, they alleged. They
have expressed fears that the stores would eat into the business of
local traders and vendors to such extent that many would be rendered
without livelihood. The street vendors and the neighbourhood ration
shops would be the worst sufferers.
They have also called for setting up of vending zones in the city for
street vendors before intensifying the eviction drive and harassing
small businessmen under the new Police Commissionerate system.
Carrefour may partner with Reliance in retail :
http://economictimes.indiatimes.com/News/News_By_Industry/Services/Retailing/Carrefour_may_tango_with_Reliance_in_retail/articleshow/2673244.cms
NEW DELHI: French retail giant Carrefour has been trying to enter the
Indian market for a while with little success so far. Numerous
attempts to enter into partnerships with Indian companies have gone
nowhere. But for two weeks now, industry has been abuzz with talks of
a possible deal between two giants -- the French retailer and Mukesh
Ambani's Reliance Retail. The trigger was a recent meeting between
Carrefour's top team and a few executives from Mukesh Ambani's office.
Sources also indicated that a top Reliance team led by Mr Ambani's
close associate Manoj Modi is likely to go to France for further
talks. "If it happens, it will be a global alliance. But these things
take very long time to materialise," said sources
Buddhadeb defends corporates' retail entry :
http://www.thehindubusinessline.com/2007/12/29/stories/2007122951890100.htm
Kolkata, Dec. 28 The West Bengal Chief Minister, Mr Buddhadeb
Bhattacharjee, on Friday defended entry of corporate houses in retail,
saying, "if we want a market mechanism, we must allow corporate houses
in retail, though slowly and cautiously."
Addressing the annual general meeting of the Bengal Chamber of
Commerce & Industry here, Mr Bhattacharjee indicated that his
Government was trying to work out a compromise formula to obtain the
benefits of modern market mechanism without sacrificing employment
opportunities.
Conceding that the entry of big corporates might throw a number of
people out of jobs, mostly old time intermediaries between farmers and
consumers, he said, "we're examining how to protect them."
Retail, real estate poised for 35% and 45% growth in `08: ASSOCHAM :
http://www.indiainfoline.com/news/innernews.asp?storyId=55088&lmn=1
Organized and unorganized retail size in 2007 was estimated at US
$330bn which is likely to increase up to US$365bn in 2008 and further
reach the size of US$440bn by 2010
Retail and real estate boom will spill over down into 2008 as these
two key sectors are well poised to register a year-on-year growth of
30-35% and 40-45% respectively over the calendar year 2007, according
to projections made by the Associated Chambers of Commerce and
Industry of India (ASSOCHAM).
In calendar year 2007, the retail sector ended up with a growth rate
of 25-28% as against 35-38% for the real estate sector. Organized and
unorganized retail size in 2007 was estimated at US$330bn which is
likely to increase up to US$365bn in 2008 and further reach the size
of US$440bn by 2010. Releasing the assessment, the ASSOCHAM President,
Venugopal N. Dhoot said that of total US$330bn, retail industry size
in calendar 2007 particularly in its organized retail segment is
around less than 5% which works out to be slightly more than US$16bn.
The organized retail occupied a space of 1 million sq. ft. in the year
2002, which shot up to nearly 14 million sq. ft. by calendar 2007 and
in 2008, the space occupation in the organized retail sector is likely
to be 16 million sq. ft. as retailers like Reliance, Plaza, DLF,
Spenser and even Aditya Birla Group more would witness their major
expansion drive in retail sector in calendar 2008, pointed out Dhoot.
As per estimates made by ASSOCHAM, the organised retail segment would
witness an additional investment of US$ 70bn by 2010 and in 2008
especially, the investment size would be around US$ 25-28bn as the
Chamber has projected retail growing between 30-35% in next 3-4 years.
The ASSOCHAM Chief also said that in 2007-08 fiscal, total retails,
contribution to national GDP is estimated between 8-10% which would
further jump up to nearly 12% in next few years. By 2010, retails
contribution to national GDP in totality is likely to be 22%.
The Chamber is also of the view that India has already emerged as the
5th world's largest investment destinations globally in retail sector
because of its market and potential which is made up of India's
population base. The retail outlets most of which are in showroom
category in India are estimated around 15 million as of now, the
number of which would further multiply.
Out of 15 million retail outlets, nearly 5.5 million sell food and
retail products. The rural retail which would be in unorganized sector
even by 2010, its size would touch about US$45bn and in 2015, the
projections and estimates are made for US$65bn. In 2007, rural retail
size has been estimated at US$30bn which by 2008, is expected to be
around US$36bn.
As per ASSOCHAM estimates in 2008, 150 new malls are likely to be
added that would capture larger organized retail market size. As
regards to real estate sector, the market size is currently estimated
at US$15bn which has been growing between 35-38% in the last couple of
years as a result of which huge investments have poured into it. From
2008 onwards, the real estate sector is likely to grow between 40-45%
but witness a slow down in metros and large cities by 2010.
As a result of this, the reality sector in tier II and tier III and
even tier IV cities would make major expansion drive for providing
dwelling units to neglected lot of society. Dhoot also said that an
estimated US$ 10 billion is expected to flow into the domestic reality
sector by end of 2008. India's FDI's in retail sector account for 22%
of its total FDI's inflow which is because in India, return on real
estate investments are around 22% as against 5-6% of world's developed
market.
Currently, 100 world's lead players in real estate have already found
a footholding in Indian reality sector. The increased flow of funds
has resulted in various policy measures to check the guess of
speculative money. About 94% of capital investment being made in the
sector is in tier I cities of Mumbai, Delhi and Bangalore. As the
property in metros has become costly and money got dearer, the
developers are moving towards tier II and tier III cities.
The reality sector is likely to notch US$90bn by 2015. The demand for
both commercial and residential property is outstripping supply. Home
loans formed 11% of total outstanding credit of scheduled commercial
banks in March 2005, up from just 2.4% in March 1990. The sales value
of housing construction has witnessed an exceptional leap from
Rs176.1mn in 1991 to Rs41.82bn in the year 2006. Housing loans grew at
an average rate of 47.68% during 2000-01 to 2004-05, subsequently
slowing down to an average of 27.85% IN 2005-06 and 2006-07.
Now, farmers' malls to take on retail biggies :
http://timesofindia.indiatimes.com/India/Now_farmers_malls_to_take_on_retail_biggies/articleshow/2665710.cms
PUNE: Farmers from Pune have ensured that they are not left behind
while making New Year resolutions, and that too, in keeping with the
times.
They have jointly resolved to take on retail biggies like Reliance
Fresh, Bharti, Subhiksha, More and Spencer's by establishing farmers'
malls beginning 2008.
On December 26, members of about 15 fruit and vegetable producers'
associations in Maharashtra gathered here to discuss the idea of a
farmers' mall. Officials of the Maharashtra State Agriculture
Marketing Board were also present.
"We are not opposed to free market, but we want to take up the
challenge. If private companies can establish malls to sell products
by farmers, why can't farmers sell their own products directly?" said
Sopan Kanchan of Grape Growers Federation of India.
Reliance Retail taste for dairy :
http://www.telegraphindia.com/1080103/jsp/business/story_8735637.jsp
New Delhi, Jan. 2: Reliance Retail is in talks with several food
manufacturers in India to enter the dairy business. It is looking at
several options, including acquisitions, buyouts, leasing and capacity
sharing.
Last month, Himalaya International signed an agreement with Reliance
Retail, which will sell Himalaya's products in the domestic market.
Sources from Reliance Retail said, "We will soon be sourcing yogurt
and flavoured milk from Himalaya International. We will also be buying
cheese from them for our stores."
Reliance has also started pilot projects in Punjab and Andhra Pradesh
where it is buying milk directly from farms. The milk is sold under
the Dairy Pure brand name at its Reliance Fresh outlets. It may expand
this project to other states at a later date.
Reliance is also planning to source other dairy products such as
butter, cheese, paneer, ice cream and flavoured yoghurt. However,
Reliance officials said, "We are in no tearing hurry to expand. We
plan to roll out the milk brand in a phased manner across the
country."
The national plans of Reliance Retail include launching three variants
of milk -- family milk, low fat and whole milk. It would also diversify
into a range of value-added dairy products.
The company plans a milk procurement target of 1 crore litre per day
over the next four years, when its retail stores are rolled out across
the country.
Reliance Retail is going to set up a number of farm hubs all over
India. Both the farm products and milk will be brought to these hubs
before being processed and sent to retail outlets.
Mukesh Ambani, chairman and managing director of Reliance Industries,
had earlier indicated that the retail venture would invest up to Rs
25,000 crore and aim at a sales target of Rs 100,000 crore over the
next four years. However, officials refused to place a figure on the
amount to be invested in the dairy business.
Tata Group eying food retail business :
http://www.ndtvprofit.com/homepage/storybusinessnew.asp?id=42531&template=&cache=1/2/2008%2010:31:46%20AM
The Tata Group is planning to launch a mid-price range food retailing
business offering below Rs 100 meals to cater to the growing urban
market.
The company terms the urban market as a segment clearly untapped and
dominated by the unorganised sector. This has tempted the group for
the second time entry into the food retailing business.
It is Tata Group's re-entry in the mid-range food retailing space
after it burnt its fingers with Barista and sources say that the
bitter Barista experience will come in handy this time.
Clearly, there is more to this business plan than just selling meals.
The venture has direct synergies with the group's focus on health
drinks business, which is presently being built through Tata Tea.
As the group unleashes its international drinks portfolio in India
build-in through foreign acquisitions, this venture will immediately
offer its ready distribution network across the country.
While the sources maintain that plans are still on the drawing board,
one thing is clear from Ginger Hotels to St James Court that Rata Tata
wants to make his presence felt across hospitality value chain and
health foods for the urban Indian.
FDI a no-no, but local retailers in overdrive mode during 2007 :
http://indiapost.com/article/techbiz/1722/
NEW DELHI: Government's plans to open up the retail sector for foreign
firms remained in cold storage this year, while domestic companies
strengthened their foothold in the sensitive industry despite
agitation by smaller traders.Although political opposition stopped the
government from allowing greater foreign investment, yet the world's
biggest and second-biggest retailers Wal-Mart Stores Inc of the US and
French firm Carrefour found a way out to establish their presence in
the 330-billion-dollar lucrative industry.
The action-packed year, however, began on a wrong note for global
players wanting to enter India with UPA Chairperson Sonia Gandhi
expressing concerns over the government's foreign direct investment
policy in retail. In a letter to Prime Minister Manmohan Singh, she
asked the government to address issues raised from many quarters on
the impact of these supermarket chains on the livelihood of small
stores.
While this was music to the ears of opponents of FDI in retail,
especially the Left parties, the commerce ministry pressed ahead with
plans to increase FDI limit to 51 per cent in specific categories like
electronic goods and sports items although the Cabinet note in this
regard is yet to be cleared.
The government is expected to examine FDI in multi-brand products only
after it receives reports from Indian Council for Research on
International Relations and the National Council for Applied Economic
Research. Currently, 51 per cent FDI is allowed in only single brand
retailing.
"The year has been a mixed one for the retail industry there were not
much progress on further relaxation on FDI policy and the 'big vs
small' debate has taken a larger political shape," Asitava Sen, KSA
Technopak's vice-president of retail and consumer goods, said. MORE
PTIPioneer of organised retail in India, Kishore Biyani's Future Group
carried on with its expansion plans aiming revenue of Rs 30,000 crore
by 2010. The Group announced a new format, KB Fair Price Shops, on the
lines of local kirana stores, a clever move to prevent any protests.
The sector also attracted other homegrown corporates. These included
tractor-to-software group Mahindra & Mahindra, realty firm Parsvanath,
two-wheeler maker Hero Group. Aditya Birla group acquired Andhra
Pradesh-based Trinethra Super Retail Ltd, while rumors were also
afloat about Subhiksha promoters selling a stake in the southern India-
based firm.FMCG major Dabur also set up a subsidiary to run its
branded stores with an initial investment of Rs 140 crore for opening
retail stores to sell health and beauty products.
RPG Group-owned Spencer's embarked on a new branding strategy and trim
the number of its current retail formats, with plans to invest up to
Rs 2,500 crore till March 2009.Besides, private equity investments and
public issues gained momentum and M&A activities picked up during the
year.
Indiabulls Wholesale Services, the retail arm of Indiabulls Real
Estate acquired 63.92 per cent stake in Piramyd Retail at an
enterprise value of around Rs 208 crore. On the other hand, some
retailers like Koutons and Vishal Retail came out with initial public
offers to fund their expansion activities."PE and IPOs will fund
growths in the sector.
On the back of the huge growth in organized retail, investments in the
sector are likely to increase from USD 3 billion in 2006 to over USD
25 billion by 2010," Ranjan Biswas, E&Y partner and national leader
for retail and consumer practice, said.
India : Organized Retail - The year that was :
http://www.fibre2fashion.com/news/daily-textile-industries-news/newsdetails.aspx?news_id=47342&page=1
2007 was a trail blazing year for the Indian retail Industry. The
who's who of corporate India joined the retail bandwagon in the year
gone by. Among them were the Bharti's of Airtel who tied up with the
retailing giant Wal-Mart with revenues of more than US $ 350 billion,
the Aditya Birla Group with many more in the Q who are willing to
invest substantially to grab a piece of the Rs3,50,000 lakh retail
cake.
The veterans of the industry like the Future Group have consolidated
their positions by opening more stores and entering new verticals like
home solutions as well as consumer durables. The future group has more
than 25 retail formats, including JVs catering to a wide consumption
space with more than 1000 stores across India.
The group will increase its footprint from present 7 million square
feet to over 13 million sq. ft of retail space. This will mainly see
the expansion of present flagship formats but will also include some
new formats.
Reliance Retail, which faced stiff resistance from a few states, has
put behind the same and is aggressively adding stores across the
country and entering newer verticals like branded apparels, tying up
with luxury brands across the globe along with venturing into the
promising wholesale business.
Reliance has 9 formats across India which includes Reliance hyper
markets, Reliance Fresh, Reliance Super, Reliance Mart, Reliance
Digital, Reliance Trendz, Reliance Footprint, Reliance Wellness,
Reliance Jewels and Reliance Timeout.
International cuisine pushes retailers' margins :
http://timesofindia.indiatimes.com/Business/India_Business/International_cuisine_pushes_retailers_margins/articleshow/2681793.cms
BANGALORE: What's for dinner tonight? If someone asked Sandhya Iya
(45) that, the answer would as easily be pasta or pizza as it would be
dal or sambhar. "At least once in ten days, I wind up making au
gratins, Chinese noodles or macaroni, since my son Anurag (14)
relishes it," says the HR consultant. Iya stocks up on cheeses, salsa
and Italian sauces from the neighbourhood FoodWorld and FabMall and
picks up coloured peppers, babycorn and mushroom from Reliance Fresh.
There's a growing urban population that's integrated international
cuisine as part of their daily diet and from food companies to
retailers, everyone's cashing in.
"There are an increasing number of people who're travelling abroad
more often at a much younger age. This group has higher disposable
income and higher aspirational living. Change in diet is one of the
first few reflections of this," says Vineet Chabbra, MD-group CEO of
Global Green, which runs the Tify brand of products like salsa, salad
dressings and relishes.
There are few companies like Global Green that started out growing and
packaging gherkins, pickled cucumbers and the like for international
retailers, but discovered tremendous potential in the domestic market.
"The Indian market forms only 1% of our business, but it's phenomenal
growth rate makes it significant," Chabbra says.
There's a slew of Indian and international brands entering the market
-- AVT Natural Products' Santa Maria range of Mexican spices and foods
compete with imported variants of taco shells and nachos, ITC Foods'
Sunfeast pasta fights for shelf space with Barilla and McVities and
Oreo are taking on Britannia and Parle.
Urban professionals in the age group of 25 to 40 years, expats,
returned NRIs or the homemaker in your neighbourhood who wants to try
out the latest Sanjeev Kapoor recipe -- the market for exotic,
international cuisine is a varied one.
For retailers -- particularly those in the premium segment -- this
widening of the palette couldn't have been timed better.
Food retailing has traditionally been a low margin business with
margins in the fresh section being as low as 5% to 7% and groceries
touching 10%. International cuisine and brands come at much higher
margins -- roughly 25%-30%.
"Exotic vegetables -- defined as those which are not traditionally used
in our cuisine -- form at least 15% of our fresh section at Food
Bazaars. In upmarket neighbourhoods, that percentage is higher," says
Arvind Chaudhary, CEO (food business), Future Group. "Celery, basil,
leek, broccoli, avocados and passion fruits are all very popular with
our customers. Mushrooms and lettuce aren't even considered exotic by
customers anymore." Exotic food is set to play a much greater role in
the group's Gourmet Food Bazaar.
An extensive cheese section, a wide range of wines and imported
variants of every other product from cookies to cereals and sauces to
squashes are commonplace at most food retailers and hypermarkets.
Spencer's conducts international food festivals with live chef
sessions at their Gurgaon and Mumbai hypermarkets in association with
foreign embassies. "The festivals are a huge hit with our customers
and helps foster loyalty. They're also a great way to educate our
customers on how to use the ingredients available in our store to
conjure up interesting recipes," says Samar Sheikhawat, VP
(marketing), RPG Retail.
The Indian audience takes to cuisine closer to native palette or which
can be made closer to native cuisine. "Salsa is like a tomato chutney
with onions, Chinese noodles is Indianised with vegetables and even a
jeera seasoning, Mexican refried beans are a different version of
rajma and mushrooms are used in pav bhaji," says an industry expert.
"If the urban SEC A and B+ audience looks for authenticity, the small
town audience looks for Indianess in foreign items. So although the
market may be considered niche, it's huge and will be a major profit
driver in the next three to five years."
Is Carrefour in a bind over India ? :
http://www.dnaindia.com/report.asp?newsid=1142718
Chain says talks are on with partners, there's no change in plan
NEW DELHI: Is Carrefour finding it tough to arrive at a viable
business model for India?
Late last year, the world's second-largest retailer had set up two
separate companies in India.
While Carrefour Wholesale Cash & Carry, as the name suggests, was for
its cash-and-carry business, Carrefour India Master Franchise Company
was set up to lend the Carrefour banner, technical services and
knowhow to an Indian company for direct-to-consumer retail.
Carrefour had indicated that while both formats would commence
operations only in 2009, the company was close to signing on a
strategic partner.
But with several potential partners walking away from negotiations in
the last few months, Carrefour's plans to partner an Indian biggie for
the consumer-facing retail venture may have been delayed.
Among the parties the Carrefour team has held (unsuccessful) talks
with are real estate developers Parsvanath and DLF; and business
houses of Nusli Wadia, Mukesh Ambani and AV Birla. But Herv Clec'h,
managing director of both the Indian entities, told DNA Money from
France that "there is no change in strategy for India".
A company spokesperson based in New Delhi said negotiations were on
with several potential partners but no decision has been reached as
yet.
As per existing policy, Carrefour does not require an Indian partner
to begin wholesale cash-and-carry business, but to enter front-end
retail, it needs to partner with an Indian company since no foreign
direct investment (FDI) is allowed in multi-brand retailing.
A retail industry expert points out that despite having a senior team
of people stationed in India for the last four years, Carrefour has
been unable to come up with a clear strategy.
Indian retail seen touching $365 b in 2008 :
http://sify.com/finance/fullstory.php?id=14582651
New Delhi: The boom in India's retail sector will continue and top
$365 billion in 2008, against $300 billion a year before, says a study
by a leading industry chamber released Monday.
With a year-on-year growth of 30-35 per cent, the retail trade sector
in India will top $440 billion by 2010, says the study by the
Associated Chambers of Commerce and Industry of India (Assocham).
"The retail industry size in calendar 2007, particularly in its
organised retail segment, is around less than 5 per cent, which works
out to be slightly more than $16 billion," said chamber president
Venugopal N. Dhoot.
He also said the organised retail players occupied a space of 1
million sq ft in 2002, which shot up to nearly 14 million sq ft by
calendar 2007.
This, he said, was likely to grow to 16 million sq ft in 2008.
Large players like Reliance Industries, Plaza, DLF and Spenser, and
new-entrant in the field, the Aditya Birla Group, would embark on a
major expansion drive in their retail businesses in 2008, Dhoot added.
The study estimated the organised retail segment would witness an
additional investment of $70 billion by 2010. In 2008, the investment
size would be in the region of $25-28 billion.
The study also estimated that that the share of retail trade in the
country's gross domestic product, currently at between 8-10 per cent,
will jump up to some 12 per cent soon and to 22 per cent by 2010.
The study also estimated that rural retail would continue to be driven
by the unorganised segment for some time, and grow to $36 billion by
2008 and top $45 billion in 2015, from the present size of $30
billion.
http://sify.com/finance/fullstory.php?id=14582408
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