Retail Business Revolution

Most of the organizations are planning to enter into retailing business, because there is a lot of scope for retailing business in developing countries like India. Here the following concepts gives an overview of retail management.

Retailing: All activities involved in selling goods or services directly to final consumers for their personal, non business use.

Retailer: Business whose sales comes primarily from retailing

Ex: Wal- Mart, Shoppers Stop, Cross Roads,Reliance,Big Bazaar,Spencer,Bharati,Pantaloons etc.

Types of Retailing:

There are different types of retailers depending on their size, shape, product lines, amount of service they offer and prices they charge etc. Some of them are given below.

a) Speciality Store: A store that carries a narrow product line with a deep assortment with in that line.

b) Department Store: A retail organization that carries a wide varieties of product lines- typically clothing, home furnishings and household goods; each line is operated as a separate department managed by specialist buyers or merchandisers.

c) Super Market: Large, low-cost, low-margin, high-volume, self service store that carries a wide variety of food, laundry and household products.

d) Discount store: A retail institution that sells standard merchandise at lower margins and selling at higher volume.

e) Factory Outlet: Off- price retailing operation that is owned and operated by a manufacturer and that manufacturers' surplus, discontinued, or irregular goods.

f) Chain stores: Two or more outlets that are owned and controlled in common, have central buying and merchandising, and sell similar lines of merchandise.

g) Franchise: A contractual association, between a manufacturer, wholesaler, or service organization and independent business people who buy the right to own and operate one or more units in the franchise system.

The major difference between wholesaling and retailing is that, retailing involves selling for personal consumption unlike wholesaling. Retailer has the actual contact with the ultimate customer/ consumer.

Retailing in India:

The Pantaloon is one of the largest retail chains in India It belongs to Pantaloon Retail India Ltd (PRIL). Reliance Petroleum Ltd (RPL) is also doing retailing with petrol, diesel as products. The company has established many retail outlets, which are fully owned by the company. The companies like Shoppers Stop, Cross Roads, Spencer's chain, Food World are in retailing business. The above businesses are having crores of rupees turnover for example food world annual turnover is more than rupees 310 crores. There is lot of scope for retail business in India. It can be called as retail revolution but organizations must concentrate on place (city), area choice and should do market research on households of various strata of the society. The Wal- Mart is very much eager to enter into Indian retailing business.


Retail is India's largest industry. It accounts for over 10 per cent of the India's GDP and around eight per cent of the employment. Retail sector is one of India's fastest growing sectors with a 5 per cent compounded annual growth rate. India's huge middle class base and its untapped retail industry are key attractions for global retail giants planning to enter newer markets. Driven by changing lifestyles, strong income growth and favorable demographic patterns, Indian retail is expected to grow 25 per cent annually. It is expected that retail in India could be worth US$ 175-200 billion by 2016.

The organized retail industry in India had not evolved till the early 1990s. Until then, the industry was dominated by the un-organized sector. It was a sellers market, with a limited number of brands, and little choice available to customers. Lack of trained manpower, tax laws and government regulations all discouraged the growth of organized retailing in India during that period. Lack of consumer awareness and restrictions over entry of foreign players into the sector also contributed to the delay in the growth of organized retailing. Foundation for organized retail in India was laid by Kishore Biyani of Pantaloon Retails India Limited (PRIL). Following Pantaloon's successful venture a host of Indian business giants such as Reliance, Bharti, Birla and others are now entering into retail sector.

A number of factors are driving India's retail market. These include: increase in the young working population, hefty pay-packets, nuclear families in urban areas, increasing working-women population, increase in disposable income and customer aspiration, increase in expenditure for luxury items, and low share of organized retailing. India's retail boom is manifested in sprawling shopping centers, multiplex- malls and huge complexes that offer shopping, entertainment and food all under one roof.

But there is a flip side to the boom in the retail sector. It is feared that the entry of global business giants into organized retail would make redundant the neighbourhood kiryana stores resulting in dislocation in traditional economic structure. Also, the growth path for organized retail in India is not hurdle free. The taxation system still favours small retail business. With the intrinsic complexities of retailing such as rapid price changes, constant threat of product obsolescence and low margins there is always a threat that the venture may turn out to be a loss making one.

A perfect business model for retail is still in evolutionary stage. Procurement is very vital cog in the retail wheel. The retailer has to fight issues like fragmented sourcing, unpredictable availability, unsorted food provisions and daily fluctuating prices as against consumer expectations of round-the-year steady prices, sorted and cleaned food and fresh stock at all times.

Trained human resource for retail is another big challenge. The talent base is limited and with the entry of big giants there is a cat fight among them to retain this talent. This has resulted in big salary hikes at the level of upper and middle management and thereby eroding the profit margin of the business. All the companies have laid out ambitious expansion plans for themselves and they may be hampered due lack of requisite skilled manpower.

But retail offers tremendous for the growth of Indian economy. If all the above challenges are tackled prudently there is a great potential that retail may offer employment opportunities to millions living in small town and cities and in the process distributing the benefits of economic boom and resulting in equitable growth.