Time for new retail formats

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It is the time for ‘new retail formats’ in the Indian retail landscape. According to a latest Technopak study on ‘Top trends in Indian retail sector’, India will see the emergence and widespread growth of new retailing formats such as:

1. Cash & carry wholesale format
2. Forecourt retailing
3. Super speciality format

According to the study, the cash & carry format offers a lucrative mode for international retailers, as 100 per cent FDI is allowed in this format. At present, Germany’s Metro Cash & Carry is the only player that has set up shop in this format.

The study says that competition in this segment is set to hot up with the entry of Bharti Wal-Mart, Reliance Retail and Future Group. The study goes on to say that around six per cent of total investments planned in retail over the next five years are expected to happen in the cash & carry space.

The cash & carry business has huge potential in India, as 97 per cent of the estimated 12 million retailers in India are small and cannot afford their own backend infrastructure, says the study.

On forecourt retailing, the study points out that customers give importance to convenience, and due to the increasing pressure on margins that the oil majors bear due to competition, oil companies have set in motion big plans of entering into non-fuel retailing by utilising their existing fuel station space.

However, it needs to be pointed out that Reliance Industries has recently decided to suspend the operations of its around 900 fuel retail outlets across the country by mid-April. A source close to the developments told Indiaretailing that these 900 retail outlets comprise the two categories of company-owned, company-operated outlets and company-owned, dealer-operated outlets. The decision to shut the outlets is an act of protest for not getting government subsidy, which is available to government-owned fuel retailers like Indian Oil, Bharat Petroleum and Hindustan Petroleum.

Super-speciality formats that focus sharply on demographic profiles are also expected to do well in the times to come, the study says. Super-speciality formats meant for kids, expectant mothers, and plus-sized men and women are already present. On similar lines, apparel stores for middle-aged women and exclusive retail formats for teenagers and tweens are expected. In this age of time starvation, increasingly the consumer needs to go to a place that offers exactly what she is looking for, says the study.

– Raja Ghoshal

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