The Indian Macro Economy

Tops AT Kearney list of emerging markets for global Retailers to en

ter.
•

2nd Fastest growing economy in the World and 50% of the total GDP led by
services
such as IT, telecommunications, healthcare and retailing.
•

GDP growth rate for the year 2007-08 ended at 9.4% (in 1st quarter) and current
GDP (6
%) is better than China and other developed country.
•

Reserves crossed the $150 billion mark, showcasing India as one of the top ten
holders of
Foreign exchange reserves.
•

Population – 1000+ Million – 50 Million Rich and 300 Million Middle class
•

65% of population below 35 years and 54% below age 25 years

•

Working population in India is growing like most other developed countries.

•

China has issues of median age 30-34 years at the early stage of development
and
psychology issues after implementation of “one child policy”
•

Housing Boom – due to nuclear family, low interest rates, tax benefits from
government
and lastly strong Indian values driven by savings and “owning home”
•

Economy - 4h largest economy in the world on PPP basis (next only to USA, China and
Japan) -One of the fastest growing economy with 6.5% average growth in GDP for last 10
years and is expected to rank 3rd by 2010, just behind the US and China
•

Fragmented retailing with 5 million retailers and 95% less than 500 sq ft – nation
of
shop-keepers -brilliant trading and entrepreneur community
•

Over 3.9 million tourists visited India this year, up from 3.0 million last year.
•

India is on the track to be the servicing capital of the world (As China is
manufacturing
capital) and Organized retail growing at 25-30%+ p.a. compound growth

1. Executive Summary
[ICBM-SBE]
Prepared by Ajay Kumar Gupta
Project Report
Executive Summary
Retailing is emerging as a sunrise industry in India and is presently largest employer after

agriculture. Some economists say that Retailing is one of the pillars of the economy in India,

and some say it is gold mine of Indian economy. Retailing in its present form started in the

latter half of 20th century in USA and Europe. Retail industry is divided into organized and

unor

anized sectors. Over 12 million outlets operate in the country and only 5% of them being

larger than 500 sq ft (46 m²) in size. Organized retailing in India is projected to grow at the

rate of 25-30% p.a., is estimated to grow from the US $ 330 billion in 2007 to US $ 427 billion

by 2010 and US $ 637 billion by 2015. Indian Retail Sector is growing very fast with so many

new players are coming in this growing organized sector and trying to attract customers by

giving attractive offers and offering competitive prices etc.

Spencer’s Retail Ltd is India’s leading retailer that operates in multiple formats. The company

operates over 6 million square feet of retail space, has over 350 square feet of retail stores

across 60 cities in India and employs over 4500 people.

The motive of the study is to know the market potential at Dr. A.S. Rao Nagar, Hyderabad

with reference to Supermarkets & find out the customer’s perception about Supermarkets &

what are the customers’ expectations from Spencer’s Retail. The main purpose of the study

is to find out the target customers, preferences of the customers and sales potential with

reference to Spencer’s.

The study is done with the help of primary data given by respondents during survey and

secondary data to know the market potential and customer preferences at Dr. A.S Rao

Nagar, Hyderabad market with reference to Spencer’s Retail Ltd, and also to understand the

current market position of Spencer’s Daily at that area and know the potential customers.

This study is done with the help of area mapping and catchment analysis technique. Primary

data is collected through personal interview using structured questionnaire and secondary

data is collected from management of the Spencer’s Retail Ltd, various book, journals and

from Spencer’s website.

[ICBM-SBE]
Prepared by Ajay Kumar Gupta

Dr. A.S. Rao Nagar is a developing area of Hyderabad and it consists of all classes of

families. Most of the families belong to Socio Economy Class (SEC) A & B. Most of the

residents fall in to age group 18-45. Most of the families have 4 to 5 members in their

families. Residents are well educated and holding jobs. Their monthly incomes are ranging

from 10,000-20,000 and above. Approximately 86.5% people visit Supermarket for shopping

and 50.75% people visit to Spencer’s Daily Supermarket. From the above data it can be

observed that there is a potential for good market opportunities for retail Supermarket.

The reason for visiting super markets as mentioned by the respondents varied from better

services to pricing to variety of products available with the super markets. 44.75%

respondents visit super markets for the prices offered by the super markets and 46.75%

mentioned that the quality of product provided by the super markets is the reason for their

visit to super markets.

The other factors which attract the respondents to various super markets are variety of

products offered, fresh products like fruits and vegetables, availability of dairy products,

home delivery, parking facilities, accepting debit/ credit cards, fast billing, booking counters,

customer service, courteous and friendly behavior and ambience.

Most of the customers complained regarding customer service, variety of product with deep

assortment, store image, arrangement of products, pricing, product knowledge of employee,

quality of products, parking space, product updation, closing time at Dr. A.S. Rao Nagar with

reference to Spencer’s Daily.

Company can enhance its business or increase its sales by doing these things; provide

better customer service than its competitors, increase the variety of merchandise with deep

assortment, arrangement of product should be in proper way that creates good store image,

provide club Spencer’s membership card to the customers. Company should also include

apparels segment in the store, should advertise through pamphlets about various offers,

provide parking space and employ knowledgeable sales staff.

[ICBM-SBE]
Prepared by Ajay Kumar Gupta
Project Report

This study helped me a lot for analyzing the market, understanding retail business and how

to respond in critical situations. Findings and suggestions/recommendation of this report

might be helpful for the company to improve its performance and business.
[ICBM-SBE]
Prepared by Ajay Kumar Gupta
Project Report

2. Introduction to retailing
Introduction
The word retail has its origin in French wordretaillier and means “to cut a piece
off’’ or“to
break bulk” .

The term Retailing is defined as “All activities involved in selling goods and

services directly to final consumers for their personal and non-business use”. In simple

terms, it implies a first-hand transaction with customer. Retailing involves a direct interface

with the customer and the coordination of business activities from end to end right, from the

concept or design stage of a product or offering, to its delivery and post delivery service to

the customer. The industry has contributed to the fastest changing and dynamic industries in

the world today.

Retailing, it is an emerging trend in the India and Hyderabad is not far behind which is also

witnessing the stupendous growth and opportunities presented by this sector. Many

institutions- Manufacturing, Wholesalers and retailers – do retailing, but most retailing is

done by Retailers. A business wholesales come from primarily from retailing. It is a proven

fact that in India the retail industry has become the 2nd largest employer after agriculture.

Indian retail sector is in boom period and many reasons are contributing to it.

The retail scenario in India is unique. Much of it is in the unorganized sector, with over 12

million retail outlets of various sizes and formats. Almost 95% of these retail outlets are less

than 500 sq. ft. In size, the per capita retail space in India being 2 sq. ft. compared to the US

figure of 16 sq. ft. Thus India’s per capita retailing space is the lowest in the world.

With more than 9 outlets per 1000 people, India has the largest number of outlets in the

world. Most of them are independent and contribute as much as 95% to the total retail sales.

Because of the increasing number of nuclear family, working women, greater work pressure

and increased commuting time, convenience has become a priority for the Indian

consumers.
[ICBM-SBE]
Prepared by Ajay Kumar Gupta
Project Report
The growth and development of organized retailing in India is driven by two main factors –

lower price and benefits the consumers can’t resist. According to experts, economies of

scale drive down the cost of supply chain, allowing retailers to offers more benefits offered to

the customers. Globally, retailing is customer-centric with an emphasis on innovation in

products, process and services. In short, the customer is the king.

The Indian retail market is the 5th largest retail destination globally. It is
estimated to grow from
the US $ 330 billion in 2007 to US $ 427 billion by 2010 and US $ 637 billion by
2015.

In Hyderabad, Spencer’s Retail came up as the organized retail outlet in the form of a

Hypermarket in the year 2001, with its inception in Hyderabad, shopping got an altogether

new meaning in Hyderabad. Some of the striking features of Spencer’s Retail – a big and

different formats having nice store image, along with soothing music and luring visual display

of the products with self-selection facility magnetizing customers to choose from a wide

assortment and variety of the products priced with entrancing discounts and fabulous offers.

The emergence of organized retailing has led to competition which has resulted to the

demographics & psychographic changes in the life of urban consumers. The life style and

purchasing power of the middle class & upper class segment have fuelled the growth of

organized retailing to intense competition among the big players.

Spencer’s Retail is facing big intense competition from organized retail outlets like Big

Bazaar, More, Vijetha, Hyderabad Central, Spar, Shopper’s Stop, Pantaloon’s, Heritage

fresh @, Food World, Reliance fresh, Vishal Mega Mart etc, to name a few, and from

unorganized retailers like Kirana shops, Garment shops etc. Competition in retail sector has

become extremely keen. Many new players coming in the retail market has increased the

degree of competition by adopting 5 P’s (i.e. place, product, price, promotion and people) for

successful retailing. While some of the exiting retailers survived, others failed to do so