Submitted By:
Ajay Kumar Gupta

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Retailing – Customer is King
“A Customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption on our work. He is the purpose of it. He is not an outside of our business. He is a part of it and we are not doing him a favor by servicing him. He is doing us a favor by giving us an opportunity to do so.” Mahatma Gandhi
Some Published issue of Retail Industry
The retail industry is expected to grow into a USD 427 billion industry by 2010- FICCI.
India’s retail industry, which is in the middle of rapid growth, has already
scripted success stories fit to be the subject of a Bollywood film-Business Standard.
The impact of organized retailers that have seen swarming of malls lately, on the “mom-n-pop stores” in 20 Indian cities- Indian Council of Research in International Economic Relations (ICRIER).
Modern Retailing Comprehensive policy vital- The Hindu
Retail boom triggers ancillary industry growth- The Times of India
The Indian Macro Economy
Tops AT Kearney list of emerging markets for global Retailers to enter.
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.
IPL has again drastically changed the outlook of the whole world towards India. It has the highest paid players across the Globe / Sports.
Real Estate & Retailers in India are the most aggressive in Asia in expanding their businesses, thus creating a huge demand for real estate. Their preferred means of expansion is to increase the number of outlets in a city and also expand to other regions.
Driven by changing lifestyles, strong income growth and favorable demographic patterns, Indian retail is expanding at a rapid pace.
Besides the 6 metros, India has 61 other cities with populations greater than 0.5 million and contributes about 14% to the country’s GDP.
India Vs World
Indian retail is fragmented with over 12 million outlets operating in the country which is 13 times more the all retail outlets operating in USA (0.9 million outlets).
India has the highest number of outlets per capita in the world - widely spread retail network but with the lowest per capita retail space (@ 2 sq. ft. per person)
Annual turnover of Wal-Mart (Sales in 2001 were $219 billion) is higher than the size of Indian retail industry. Almost 100 times more than the turnover of HLL (India's largest FMCG Company).
Wal-Mart - over 4,800 stores (over 47 million square meters) where as none of India's large format store (Spencer’s, Big Bazaar, Shoppers' Stop, Westside, Lifestyle) can compare.
The Wal-Mart sales per hour of $22 million are incomparable to any retailer in the world. Numbers of employees in Wal-Mart are about 1.3 million where as the entire Indian retail industry employs about three million people.
One-day sales record at Wal-Mart (11/23/01) $1.25 billion - roughly two third of HLL's annual turnover.
Developed economies like the U.S. employ between 10 and 11 percent of their workforce in retailing (against 7 percent employed in India today).
60% of retailers in India feel that the multiple format approach will be successful here whereas in US 34 of the fastest-growing 50 retailers have just one format
Inventory turns ratio: measures efficiency of operations. The U.S. retail sector has an average inventory turns ratio of about 18. Many Indian retailers have inventory turns levels between 4 and 10 - KPMG surveyed.
Global best-practice retailers can achieve more than 95 percent availability of all SKUs on the retail shelves (translating into a stock-out level of less than 5 %).The stock-out levels among Indian retailers surveyed ranged from 5 to 15 percent.
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 unorganized 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.
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.
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.