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Every now and then there are reports in media about the rate of growth in the retail sector.
However the following quotes and figures tell a different story:
As per the confirmed media reports in national dailies at least 22136 new outlets have been announced by different retailers (List attached) mostly by the directors of listed companies. According to Retailers Association of India (RAI) “The organized retail sector will grow by 15% (double digit) in 2008-09”. According to Technopak Advisors “Our estimates suggest modern retailing will grow by around 25% ( double digit) this fiscal” Commenting on the footfalls at the company outlets, Major brands director Kamal Kodak said, “There has been no decrease in footfalls across our brands. All brands have performed well and as compared to last year’s figures, our sales figures this year have gone up by 15 – 20 per cent.” India’s leading flower retailer Ferns N Petals has claimed that it has seen the biggest growth this year. “With our outlets across the country and through the online service, we have seen 30 per cent growth in the retail sector and 80 per cent sales increase in the online service this year during Valentine’s Day as compared to the corresponding sales in the last year. Apart from the growth which was seen during valentines, a growth of around 40 per cent is observed in the overall sale as compared to the last year,” said Pawan Gadia, VP - Ferns N Petals.
A report by the global consultancy firm, AT Kearney said "The consumer spending in India has increased by an impressive 75 per cent in the last four years and will quadruple in the next 20 years." Moreover, India recently topped the Nielsen Global Consumer Confidence study, conducted by Nielsen, a market research company. The biannual report revealed that Indians are "the most optimistic lot globally who think that their country will be out of the economic recession in the next twelve months."
Despite the global economic slowdown, Indian retailers are still optimistic about the India growth story. Speaking on the issue, Mr Tarun Joshi, CEO and MD of Brand house Retails said “Fashion retail has not been impacted in a big way. Not even 0.5 per cent of the working population has been hit in India.”
According to a joint study recently conducted by ASSOCHAM and KPMG, “The estimated annual growth of organized retail sector is 40 per cent. The size of the organized retail sector by 2010 is estimated to reach US$ 51 billion”
Where is the recession in Retail? There have been good sales (better than last year) on Diwali, Christmas and the extended period of discounts. Latest reports show increase in net sales in % age over ' Q3 07
Maruti Suzuki sold 79,190 cars last month, up 24 per cent from a year earlier (ET – March 3, 2009). Domestic sales of the SX4 and D'Zire sedans rose more than 300 per cent from year ago. The country's largest two-wheeler maker Hero Honda Motors Ltd (HHML), on March 1,2009 reported a 24 per cent jump in its total sale in the month of February, at 3,29,055 units, as compared to 2,65,431 units in the same month last year. Two-wheeler manufacturer TVS Motors announced a 13 per cent growth in its two-wheeler sales (ET – March1,2009)The Company’s net sales rose to Rs 255.22 crore in the fourth quarter of 2008 from Rs 233.97 crore in the same quarter last year. Bata India announced it has registered a 45.44 per cent growth in consolidated net profit at Rs 59.05 crore for the fourth quarter ended December 31, 2008. The company's net sales rose to Rs 255.22 crore in the fourth quarter of 2008 from Rs 233.97 crore in the same quarter last year. (ET – Feb. 27, 2009)
Inspite of all this optimism, paradoxically no new projects have been announced in the last few months and from the biggest mall in metros to the smallest mall in tier 2/3 cities are all on hold now. Soon the situation will become one of low supply and more demand as 22136 new outlets will soon need a place to open (I doubt there is place on the high streets across the country to accommodate even 2200 outlets)
Those who trusted us and told the great story of Retail and being the biggest employers trading globally have migrated to various retail formats/services/retail/Real estate from other industries- the Trainees and employees at junior and middle levels are paying dearly for this negativity. The prevalent negativity in the market is affecting everyone but none more so than the next generation. Most of us have seen only good times but for the youngsters who have not contributed to the present situation, is it fair to make them suffer? Thousands of students who are pursuing retail course in some of the best B- schools with dreams in their eyes of making it big in the corporate world, is it right to leave them in the lurch by writing dooms day stories ? If we can’t help them at least should not demotivate them either.
Why are we allowing the internal issues of our retail fraternity to fuel the negativity? Friends, there are 11.2 million outlets out there and there is enough space for all of us to grow even in this so called recession. If we can afford 11 million shops, we can very well afford 600 malls in this country; Let us make a concentrated effort to move ahead and spread positivity in the world.
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