A Report On

INDIAN RETAIL INDUSTRY

Submitted by:

Anagh Goel; 17021141013

Damini Mota; 17021141029

Ankit Lodha; 17021141016

Himani Chauhan; 17021141027

Anjana Anand; 17021141015

Of MBA 2017-19

Subject:

Business Environment

Submitted to:

Dr. Tanmoy De

Submitted on:

14.09.2017
 OVERVIEW

The overall retail market in India is estimated to be ~630 Billion USD in 2015. The

organized market is estimated to be 9-10% of the total market i.e. ~ 60 Billion USD.

The sector has grown at ~12 % over the last decade and going forward we expect

growth to be moderately higher. We expect the retail market to be 1100-1200 Billion

USD by 2020, of which organized retail could be potentially 140-160 Billion USD.

The overall growth would be driven by significant demographic shifts: 70% increase in

income levels, 100 Mn youth entering the workforce, increasing nuclearization & 35%

of Indians living in urban centres.

In the last few years, retail has been one of the top performing sectors globally from a

shareholder returns perspective. However, in India, retail lags other sectors on key

metrics of profitability and return on capital. The average profitability in retail is lower

by 300-500 bps and return on capital employed by 500-1000 bps vs other sectors. The

same comparison also indicates Indian retailers deliver lower returns when compared

with global peers.

The sector performance is shaped by

• Value conscious, digitally connected consumer, who demands lower prices and

is getting increasingly digitally influenced.

• Supply side economics: Lower margins relative to global peers driven by lower

salience of organized retail and higher rents

• Competitive landscape Strong value proposition and low cost model of

traditional retailers; Emergence of E-commerce as "new competition "

 • Regulatory barriers: Ability to attract capital, running a cost efficient operation

and ease of doing business constrained by regulation, both at the Centre and

the State level

The one big trend that would shape the industry is the increasing expectations for

retailers to provide a true all-channel experience.

By 2020, it is expected that

• ~650 Million consumers will be online, of which 350-400 Million consumers

would be "digitally influenced" in retail categories

• E-commerce market to grow to 45-50 Billion USD online. There could be a

potential upside with active steering by the supply side

• The drivers of buying online would not be just price but convenience, availability

of a relevant, wider variety. In Tier 2 towns, the relevance of variety would

increase, driven by lack of options in organized retail

• Pure-play online players would continue to grow and strengthen their business

models and capabilities. Retailers who are able to build strong capabilities in

omni-channel would be better poised to win vs pure play in most categories.

However, the growth for organized retail is not a given. The size and profitability of the

opportunity would be driven by both some external uncontrollable factors but also by

the actions of the players themselves.

 TRENDS: Consumption and Production

The Indian retail market size stands at about USD 585 billion and is expected to grow

at CAGR of 13 percent to reach USD 1080 billion by 2020. This growth is largely

attributed to the coming of age of the Indian retail sector, which has gone through

major transformation over the last decade with a noticeable shift towards organised

retailing.

Speaking specifically on the Indian fashion accessories segment, the market was

worth around US$ 3 billion in 2013 and is expected to grow at a CAGR of 12 percent

touching US$ 6 billion by 2019. This growth in the fashion accessories market can be

contributed to various factors like:

- FDI policy for single and multi-brand retailing.

- Increasing fashion awareness and aspirations among consumers.

- Easy access to information facilitated by technology.

- Growth and acceptance of e-commerce in fashion sector.

- Less risk in design creativity- This allows designers to experiment with the

product design with lesser risk as compared to creativity in gold jewellery.

However, this market is still largely dominated by unorganised players, wherein it is

estimated that organised retail contributes only 16 percent to the bags, belts and

wallets markets of the accessories segment. This organised retail has been an influx

of some of the world’s biggest fashion retailers with far more conducive FDI norms

than in the past.

E-commerce has also changed the face of Indian retail sector in the past few years.

As the acceptance towards technology increases, more and more consumers are

willing to explore web based shopping alternatives. This has lead to an overcrowding
of platforms as customers are flooded with options. In such a scenario, E-tailers are

turning to innovative ways of interacting with their consumers, seamlessly blending

off-line and online channels, all the while trying to stay connected with their target

consumers via various touch points – social media being the most crucial of them.

These brands look to offer the consumers an experience, which extends beyond the

product and creates a long-term relation with them.

For Example – Though the advent of Demonetisation was beneficial to the nation’s

long-term growth it took a toll on the Fashion Retail Industry, especially the Luxury

market. Again, the post-demonetisation surge in gold prices in the country had

discouraged the consumer from investing into gold. Suppose these speculations in

gold prices continue in future, it would prove beneficial to an already growing fashion

jewellery market as consumers look for a cheaper substitute. Similarly, the real estate

market would also face a slowdown, leading to fall in property rates. This could again

prove beneficial to retailers who look towards expansion.

Strong Growth in the Indian Retail Industry:

The retail sector in India is emerging as one of the largest sectors in the economy.

the total market size is estimated to be around USD600 billion, thereby registering a

CAGR of 7.45 per cent since 2000. Retail industry is expected to grow to USD1.3

trillion by 2020, registering a CAGR of 9.7 per cent between 2000- 2020.
Factors affecting Demand of Retail Industry:

 Higher brand consciousness

 Rising incomes and purchasing power

 Growing aspiration levels and appetite to experiment

 Credit availability

 Growing young population and working women

 Changing consumer preferences and growing urbanisation

Factors affecting Supply of Retail Industry:

 Rapid real estate and infrastructure development

 Easy availability of credit

 Emergence of new categories

 Expansion plans of existing players

 Development of supply chain improving efficiency

 R&D, innovation and new product development

 PRICING TRENDS

India is the fifth largest retail destination globally. The country is among the highest in

the world in terms of per capita retail store availability. India’s retail sector is

experiencing exponential growth, with retail development taking place not just in major

cities and metros, but also in Tier-II and Tier-III cities. Healthy economic growth,

changing demographic profile, increasing disposable incomes, urbanisation, changing

consumer tastes and preferences are the other factors driving growth in the organised

retail market in India.

Retail industry accounts for 10% of the total GDP of the nation and 8% of total Indian

employment. There are 12 million retail outlets in the country employing more than 33

million people. Retail industry has been on a growth trajectory over the past few years.

Indian retail market is expected to reach US$ 950 billion by 2018, registering a

compound annual growth rate of 8.9 per cent during 2000-18 and is expected to

double to US$1.3 trillion by 2020 from US$ 600 billion in 2015. Of this, organized retail

is expected to grow at a rate of 25% per annum. The traditional and organized retail

are expected to reach a size of US$ 650 billion (76% of total) and US$ 200 (24% of

total) trillion respectively by 2020.

India’s online retail may increase seven times more in next five years. E-commerce is

expected to be the next major area for retail growth in India. Retail e-commerce sales

in India are expected to reach $17.5 billion (Rs 105,120 crore) by 2018, from $5.3

billion (Rs 31,800 crore) in 2014

Retail market is divided into the organized sector comprising of licensed retailers

operating in hypermarkets, super markets, malls, departmental stores etc and, the

unorganized sector dominated by large number of small retailers comprising of local

kirana shops, owner manned general stores, chemists, apparel shops, pavement

vendors, hand cart hawkers etc. A third form of retail is the virtual retails where

products are ordered via mail, telephone or online without having examined physically

but instead in a catalogue, on television or on a website.

Increasing participation from foreign and private players has given a boost to Indian

retail industry. India’s price competitiveness attracts large retail players to use it as a

sourcing base. Global retailers such as Wal-Mart, GAP, Tesco and JC Penney are

increasing their sourcing from India and are moving from third-party buying offices to

establishing their own wholly-owned/wholly-managed sourcing and buying offices.

The Government of India has introduced reforms to attract Foreign Direct Investment

(FDI) in retail industry. The government has approved 51 per cent FDI in multi-brand

retail and increased FDI limit to 100 per cent (from 51 per cent) in single brand retail,

and plans to allow 100 per cent FDI in e-commerce, under the arrangement that the

products sold must be manufactured in India to gain from the liberalised regime.

Margins for retail businesses are extremely variable. Dollar stores, for example,

generally have low margins and aim for high sales, while stores selling luxury items

will sell far less product in a given time period, but can expect profit margins to be

considerably higher.

Pricing usually falls into one of two types "Cost-plus” prices are set by the retail store

based on a mark-up over their cost to purchase inventory.

“Suggested retail” prices are determined by the manufacturer and are often printed on

the product. Retailers can discount from the Manufacturer's Suggested Retail Price

(MSRP), but not generally mark prices up.

RESOURCE REQUIREMENTS

RAW MATERIAL

The above figure explains the Supply Chain of goods’ distribution right from
manufacturers, until it reaches the end consumers. This chain originates from
manufacturers, who distribute their products to different manufacturers’ distribution
centres. These centres are usually warehouses and godowns who inturn distribute
these products to the retail distribution centres located at various places. Finally, the
products are moved on to the retail outlets located at different vicinities, such as D-
mart, More, BigBazaar etc, thus getting into direct contact with the end customers.
SKILL MANPOWER
Retailing is the vital link in any typical supply chain as it is closest to the customers.

Retailing adds value in terms of bulk breaking, providing a wide assortment of goods,

and incidental services to customers. The value chain and core processes involved in

retail are given below.

Human Resource and Skill Requirements in the Organised Retail sector

Store operations play a critical role in shaping the customer perceptions towards the

store/mall. Store operations involve selling, management of goods flow, store

maintenance, customer service and transaction processing. The sales person plays

an important role in technology goods, high value high involvement goods such as
jewellery, watches, etc. Customer service includes delivery, repair, warranty work and

handling of customer returns, etc.

Merchandising
It involves selecting and displaying of the assortment of goods to be sold. The right

mix/kind of merchandise plays an important role in selection of a particular store by

the customer and is a key differentiating factor. It is a dynamic activity which has to be

in resonance with customer trends and also has implications for the top-line and

bottom-line of a retail outlet.

Logistics

The infrastructure bottlenecks in India i.e., road conditions, lack of strong cold chains,

poor warehousing facilities, are well documented. These bottlenecks add up to the

logistics cost both in terms of time and money. Logistics plays an important role for

Organised Retail as the economies of scale are mainly on account of centralised

sourcing systems. The high logistics cost also forces the retailers to trade-off between

availability of goods to the customer and high inventory costs.

Marketing

Marketing strategies of a firm shape both the pulling the target audience to the store

through advertising and pushing merchandise to the customers through sales

promotion programmes. The challenge for Organised Retail is to ensure both high

footfalls and conversion ratio. Increasing the average transaction size is one of the

main concerns for a retail outlet. Effective CRM strategies such as loyalty programmes

play an important role in achieving the aforementioned objectives.

Purchase

Centralised purchasing is important for the organised retailers to get advantage of their

scale of operations. Retailing often involves a number of products and stock keeping

unit (SKU) which make this task even more difficult. Purchasing function has to work in

co-ordination with logistics and merchandising. The function also takes care of Vendor

selection and development

Corporate services

Corporate services are support functions such as Finance, HR, IT, Administration. IT

and HR functions are increasing in importance. IT plays a key role in improving the

efficiency as well as CRM activities.

TECHNOLOGY

Retailers are becoming more innovative in hopes of attracting modern customer.

Technological advances have found more and more retailers struggling to keep up.

By becoming early adopter, some retailers have manged to rapidly outspace the

competition. Some of the technologies used by modern retail store is listed below:

1. Barcode Scanner

2. Billing software

3. Metal Detector

4. E-commerce

5. Travelator

6. CCTV

7. Kiosks Machine
 8. Packaging

9. Swipe machine

10. Electronic weighing machine

11. Glass sensor Doors

There are many different miscellaneous technologies used in stores such as

computer, refrigerator, Air conditioner, lifts, lights, etc..

OTHER RESOURCES

Ware House

Warehouse is one of the major constituent in any product based industry. In

accordance to retail industry, which focuses majorly on fast demand high value goods,

stocking of necessary goods is very essential in order to meet the customer demands.

Warehouse management is the primary concern for any retailer as this involves high

cost. Stocks need to be arranged in blocks in warehouse so it become easier for

retailer to identify the product.

Transportation

Every product that has been manufactured has to reach the customers and this is

taken care by transportation. Based on the capacity of the customer the forms of

transportation differ. Transportation is an integral part of the value chain that the cost

incurred in transportation adds to the final price of the product. That is why the industry

people focus much on reducing the transportation cost so that the customer gets

benefited and which in turn results in more customer.

 PROFITABILITY ANALYSIS

Organized retail is a difficult business in India. As can be seen in the exhibit below, the

sector performance lags most other sectors on key metrics. In this analysis top 10

companies across a set of sectors are considered to evaluate their performance on

profitability and RoCE (Return on Capital Employed).

The Indian economy has been showing a persistent growth in the past five years, the

GDP has grown from US$ 1.823 trillion in 2011 to US$ 2.264 trillion in 2016, with the

annual growth rate for 2016 being 7.1%. A booming economy has in turn led to

increase in consumer expenditure reaching US$ 1.25 billion. The increased consumer

expenditure has been beneficial to the retail sector at large. The retail sector in India

is emerging as one of the largest sectors in the economy. It’s total market size was

estimated to be US$ 672 billion in 2016, registering a Compounded annual growth rate

(CAGR) of 7.74% since 2000. A growth to US$ 1.3 billion is expected by 2020.

Gross Contribution

The retail sector contributed to 10% of the total GDP of India in 2016, i.e. US$ 226

billion; and 8% of the employment making it one of the largest contributors in the

service sector.
 INDUSTRY TREND AND CHALLENGES

 Retail consolidation

 Manufacturer practices

 Advances in technology and innovation

 Big Box Retail Gets (More) Local

 Omni-channel is Expanding

Retail consolidation:

Recent M&As have been listed below.

Mergers and acquisitions (M&A) have resulted in the consolidation of retail chains,

thereby substantially altering the retail competitive arena. The effects of consolidation

results in strengthen their competitive positions in the marketplace by increasing their

size which helps them to facilitate offerings and extend their reach, thereby lowering

costs (by improving their bargaining position vis-à-vis manufacturers), expanding

revenues from consumers and markets, and gaining market share across channels

and formats. Consolidation becomes more attractive to customers by offering a wider

assortment than competing retailers

It improves the profitability of retailers by increasing the distribution of retailers’ higher

margin private label offerings vis-à-vis national brands.

Manufacturer practices:

Manufacturers have treated retailer pricing as a chain-wide coordinated strategic

variable. By focusing on a single buyer for an entire chain, they are able to sell more

efficiently with fewer account managers. Retailers typically appoint a specific

manufacturer as “captain” for each major category. They rely on the consumer

behaviour analysis and pricing recommendations of the category captain. Since

category captains are likely to make pricing recommendations

The grocery industry relies heavily on manufacturers’ trade allowances or promotional

funds, which account for about 54% of the marketing dollars. Trade allowances have

traditionally been used to adjust pricing and support promotions at the retail level.

Manufacturers provide trade funds to retailers in the form of either scan-back

allowances, which means reimbursement is based on units sold by the retailer, or off-

invoice allowances, meaning that reimbursement is based on units purchased by the

retailer.
Advance in technology and innovation:

The shift toward data and technology-driven approaches has been a cultural change

for many retailers. Information management and supply chain management helped by

technological advances have driven retailers’ costs down. In the 1990s, supply chain

tools helped improve efficiencies in the flow of goods, but did not always ensure that

retailers had the right merchandise in the right stores at the right price and at the right

time.

Big Box Retail Gets (More) Local:

big box retailers are slowly moving away from chain-wide marketing and

merchandising and allocating an increasing amount of floor space and presentation

based on a store’s geographic location. With this more localized perspective, a retailer

can spotlight local, favourite brands, and also source more products locally. This more

localized approach requires the retailer to reconsider digital discovery alongside in-

store experiences, as retailers learn to more effectively leverage 1:1 marketing

strategies. Stores can also utilize advanced technologies to modernize the customer

experience and bolster the back-of-house infrastructure with analytics, product

location, sales and CRM systems for inventory management, personnel management

and more.
Omni-channel is Expanding:

Mobile are influence approximately $1 trillion in spending this year for U.S. brick-and-

mortar retailers. Retailers have long realized that establishing an Omni channel

presence is necessary to bridge the digital and physical divide. In 2016, retailers will

invest heavily across each channel to create seamless experiences to meet shopper

demand as they engage with retailers across multiple touch points. Areas that will

continue to gain momentum include ship from store options and Buy-Online-Pickup-

In-Store (BOPUS) services. Mobile platform increases present opportunities to

engage shoppers who use smartphones to search for specific products to purchase.

Brands will desire to reach highly targeted retail audiences through mobile.
 CHALLENGES

Retail Demand Depends on the Economy:

Economic factors, including personal income, consumer confidence, job growth, and

interest rates, can greatly affect consumer spending and the retail sector. During

recessionary periods, retail sales growth can slow drastically and even decline. Retail

spending grows rapidly during periods of strong economic growth, as consumers

spend a greater share of income and increase their personal debt. Rising interest rates

affect consumer credit and consumer ability to finance large retail purchases, such as

cars.

Industry Concentration:

In many retail segments, large companies dominate and hold the majority of the

market. Small retailers specialize in a niche area of product. Although this can be

strength when consumers are looking for product expertise, small retailers are

dependent on a limited range of products to make sales. Suppliers favour large

retailers by offering volume discounts. With limited marketing funds, small retailers

struggle to compete with the large advertising budgets gives upper hand to large

retailer.

Seasonal Cash Flow:

For many retailers, cash flow is uneven because of seasonal demand. Due to

increased demand during the winter holidays, many retailers, including toy, jewellery,

and consumer electronics stores, generate a disproportionate share of revenue.

General merchandise stores must build and finance inventory in seasonal

merchandise categories to prepare for key selling periods.

Trends Affect Demand:

Consumer tastes and preferences can change rapidly and greatly affect demand for

retail items. Fashion fads and product life cycles can be unpredictable and companies

may struggle to make merchandising decisions based on future trends. Forecasting

error can result in excess merchandise or out-of-stocks and missed opportunity. The

fickle nature of certain demographics, such as children and young adults, has resulted

in short product life cycles and high new product failure rates in some categories.

Improving efficiency, time and speed of delivery:

In the world of retail today cheaper, faster, better is necessity. Efficiency drives

competitive success. The greater streamline and creates flow of goods and services

in a better way .Tight budgets, achieving more with less staff and information overload

all contribute to the time challenge of every manager in the sector.

Upcoming of E-commerce:

A company dropped from 5% in 2011 to 2% in 2014 as revenues of companies is hit

by its online rivals. Online companies are now penetrating Tier II and Tier III cities,

several brick-and-mortar players are also expanding either to new geographies or to

new micro-markets within cities. Expansion of ECOMMERCE has created threat for

small and large retailers as it provides portal for all goods and services at reasonable

price and on your door step. The graph below highlights growth of E-COMMERCE

from 1997 to 2016.

 OUTLOOK

Sector Strengths

Indian retail’s growth potential is highly attracting investors as it occupies a

remarkable position in global retail rankings. It enjoys four major appeal factors,

namely:

 Robust Demand

 Innovation in financing

 Policy Support

 Increasing Investments
In FDI Confidence Index, India ranks 8th; while being ranked 2nd in the Global Retail

Development index 2016. These rankings are witnessed by the US$ 511.76 billion in

the first half of 2016 alone.

Opportunities

There are ample growth opportunities in the retail Industry.

 Large number of retail outlets

India has been experiencing exponential growth in the retail sector.

Development in this sector has been evidently observed in major cities,

metros, as well as Tier-II and Tier -III cities.

 Rural markets offer significant growth potential

FMCG players are focusing on rural market as it accounted for over 40 per

cent of FMCG consumer base in India in 2016. With increasing investment in

infrastructure, retailers would be able to increase their access to high-growth

potential rural markets.

 Private label opportunities

The organised Indian retail industry has begun experiencing an increased level of

activity in the private label space. The share of private label strategy in the US

and the UK markets is 19 per cent and 39 per cent, respectively, while its share

in India is just 6 per cent. Stores like Shopper Stop, Lifestyle generates 15 to 25

per cent revenues from private label brands.

 Sourcing base

India ‘s price competitiveness attracts large retail players to use it as a sourcing

base. Global retailers such as Walmart, GAP, Tesco and JC Penney are

increasing their sourcing from India and are moving from third-party buying

offices to establishing their own wholly-owned/wholly-managed sourcing and

buying offices.
  Luxury retailing

Luxury retailing is gaining importance in India. This includes fragrances, gourmet

retailing, accessories and jewellery among many others. The Indian luxury

market stood at around US$ 18.6 billion in 2016 from US$ 14.7 billion in 2015 ,

thereby registering a growth of 26.5 per cent.

Innovations and Sustainability

To enjoy a sustainable growth in the industry, companies need to be innovative in

their strategies. The Boston Consultancy Group has identified Pricing as one of the

Key areas which require attention as it is often executed poorly.

Pricing

A host of issues come up for consideration in retail pricing; the nature of the local

competition; product discounts; and defining the rules of pricing by store catchment,

geography and product hierarchy. Most retailers in India, take a fairly simple

benchmarking-based approach with pricing without considering the ability of the

consumers in the catchment to pay, or the historical price elasticity. This approach

falls short of identifying opportunities to drive both price perception and profitability,

Price perception plays a key role in deciding choice of shopping destination. The

pricing model needs to be well synchronised with the overall banner proposition

along with tools to handle large amounts of data to drive benefits in a short time.

An integrated approach to pricing has been proven successful. The key for deriving

short and long-term value from pricing is to win both price and price perception. It is equally

critical that the principles behind the pricing model are closely linked to the core banner
proposition. A dynamic pricing model requires looking at a wide gamut of levers. It also

requires institutionalizing the use of multiple objective techniques such as customer price

discovery, benchmarking and elasticity analysis.

 MARKET LEADERS AND THEIR PERFORMANCES

ADITYA BIRLA RETAIL

The Aditya Birla Group is an Indian multinational conglomerate headquartered

in Mumbai, India. It operates in 40 countries with more than 120,000 employees

worldwide. The group was founded by Seth Shiv Narayan Birla in 1857. The group

interests in sectors such as viscose staple fibre, metals, cement (largest in India),

viscose filament yarn, branded apparel, chemicals, fertilisers, insulators, financial

services, telecom, BPO and IT services.

Aditya Birla Retail Limited (ABRL) is the retail arm of Aditya Birla Group company. ABRL is the

fourth largest supermarket chain in the country after Future Group, Reliance Retail and D-Mart. It

operates two different store formats - Supermarket and Hypermarket under the brand more. It has

about 494 supermarkets and 19 hypermarkets around the country. ABRL plans to open 100

supermarkets and 6-8 hypermarkets.

Aditya Birla Retail Limited provides customers products under its own labels. Private label Food

Brands include Feasters, Kitchen's Promise, and Best of India. Home & Personal care brands

include Enriche, 110%, Pestex, Paradise and Germex. As per a report in Economic Times, Aditya

Birla Retail Ltd ( ABRL) with its 500 + 'More' branded supermarkets and 14 hypermarkets reported

sales of Rs 1,966 crore and a net loss of Rs 650 crore in the year ended March 2012. The company

has accumulated losses of Rs 2,984 crore since it entered the segment over six years ago.
PERFORMANCE ANALYSIS OF ADITYA BIRLA RETAIL

NET SALES

YEAR 2017 2016 2015 2014 2013

NET SALES 6602 6060 1850 1661 1285

NET SALES (₹ IN CRORES)

7000 6602
6060
6000

5000

4000
3000
1850 1661
2000 1285
1000

0
2017 2016 2015 2014 2013

OPERATING PROFIT

YEAR 2017 2016 2015 2014 2013

OPERATING
PROFIT 437 396 72 33 66.12

OPERATING PROFIT (₹ IN CRORES)

500
437
400 396

300

200

100
72 66.12
33
0
2017 2016 2015 2014 2013
 NET PROFIT

YEAR 2017 2016 2015 2014 2013

NET PROFIT 53 -104 -228 -187 -68

NET PROFIT (₹ IN CRORES)

100

50

0
2017 2016 2015 2014 2013
-50

-100

-150

-200

-250

TOTAL REVENUE

YEAR 2016 2015 2014 2013

REVENUE 6060 1851 1661 1285

TOTAL REVENUE (₹ IN CRORES)

6060

1851 1661
1285

2016 2015 2014 2013

PERFORMANCE SUMMARY

The above graphs give us a clear analysis, that the net sales has increased steadily

overtime. The operating profit dipped in the beginning and then increased

exponentially. The net profit dipped steeply for three years and increased steeply. The

total revenue was low and quite constant from 2013 to 2015 and then increased with

a steep slope.

All this shows that the company was in losses before but, it turned its losses into profits

and grew in the last five years.

FUTURE RETAIL

As India’s leading retailer, Future Retail inspires trust through innovative offerings,

quality products and affordable prices that help customers achieve a better quality of

life every day. We serve customers in more than 240 cities across the country through

over 11 million square feet of retail space.

Future Retail is the flagship company of Future Group, India’s retail pioneer catering

to the entire Indian consumption space. Through multiple retail formats, we connect a

diverse and passionate community of Indian buyers, sellers and businesses. The

collective impact on business is staggering: Over 330 million customers walk into

our stores each year and choose products and services supplied by over 30,000 small,

medium and large entrepreneurs and manufacturers from across India.

Future Group is a corporate group and nearly all of its businesses are managed

through its various operating companies based on the target sectors For e.g., retail

supermarket/hypermarket chains Big Bazaar, FBB, Food Bazaar, Food Hall,

Hometown etc. are operated by its retail hand, Future Retail Ltd, while its fashion

outlets Brand Factory, Central, Planet Sports etc. are operated via another of its

subsidiaries, Future Lifestyle Fashions With these many fashion outlets and

supermarket, the group also promotes respectively, its fashion brands like Indigo

Nation, Spalding, Lombard, Bare etc., and FMCGs like Tasty Treat, Fresh & Pure,
Future Group retail services sorted by operating companies

 Food Bazaar

 Fbb

 HomeTown

 E Zone

 Foodhall

 FutureBazaar.com (e-retailing)

 Easyday

 Big Bazaar
 PERFORMANCE ANALYSIS OF FUTURE RETAIL

NET SALES

YEAR 2017 2016 2015 2014 2013

NET
SALES 17,075 6,844 1,779 2,343 1,578

NET SALES (₹ IN CRORES)

18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2017 2016 2015 2014 2013

OPERATING PROFIT

YEAR 2017 2016 2015 2014 2013

OPERATING
PROFIT 581 85 -384 -588 -486

OPERATING PROFIT (₹ IN CRORES)

1000

500

0
2017 2016 2015 2014 2013
-500

-1000
 NET PROFIT

YEAR 2017 2016 2015 2014 2013

NET PROFIT 368 14 -379 -314 -538

NET PROFIT (₹ IN CRORE)

368

14
2017 2016 2015 2014 2013
-314
-379
-538

TOTAL REVENUE

YEAR 2017 2016 2015 2014

REVENUE 17098 6863 5782 1849

TOTAL REVENUE (₹ IN CRORES)

20000

15000

10000

5000

0
2017 2016 2015 2014
PERFORMANCE SUMMARY

According to the graphs, we can see that the net sales of the company has been

increasing throughout the five years. The graph also shows that the net sales has

increased three times from the last year. And the net profit has also increased almost

25 times which proves that the company is making a lot of profit thus we can say that

company is in a good position. The graph also give a clear view to us that the company

started to progress in last two year and now they are almost the number one company

in retail industry in India.

V-MART

V-Mart is a complete family fashion store that provides its customers true value for

their money.

V-Mart offer customers a great shopping experience each time they visit store by

offering a vast range of products under one roof. Maintaining high standards in

quality and design, V-Mart offers fashion garments at down-to-earth prices and over

a period of time it has emerged as the destination of choice for bargain hunters and

the fashionable alike.

V-Mart primarily operate in tier II & tier III cities with the chain of “Value Retail”

departmental stores. Their stores cater to the needs of the entire family altogether by

offering apparels, general merchandise and kirana goods.

“Priceless Fashion” is the main motto through which we believe in providing the

latest trends to the upwardly mobile Indians at the best possible price.

V-Mart has 153 stores across 129 cities in 14 states and union territories. Our

stores are located in prime states/cities such as Bihar, Chandigarh, Gujarat,

Haryana, Jammu & Kashmir, Madhya Pradesh, New Delhi, Punjab, Rajasthan, and

Uttar Pradesh. They are amongst the pioneers in setting up modern ambience stores

or large retail malls across various small towns and cities.

 PERFORMANE SUMMARY OF V-MART

NET SALES

YEAR 2017 2016 2015 2014 2013

NET SALES 1001 809 720 574 383

NET SALES (₹ IN CRORES)

1200

1000

800

600

400

200

0
2017 2016 2015 2014 2013

OPERATING PROFIT

YEAR 2017 2016 2015 2014 2013

OPERATING
PROFIT 83 62 64 53 39

OPERATING PROFIT(₹ IN CRORES)

100

80

60

40

20

0
2017 2016 2015 2014 2013
 NET PROFIT

YEAR 2017 2016 2015 2014 2013

NET PROFIT 39 27 37 25 18

NET PROFIT

39
37

27
25

18

2017 2016 2015 2014 2013

TOTAL REVENUE

YEAR 2017 2016 2015 2014

REVENUE 81042 72239 69783 54783

REVENUE

81042
72239 69783
54783

2017 2016 2015 2014

PERFORMANCE SUMMARY

The above graphs show that the net sales increased by 161% over the years,

operating profit has also steadily increased over the years, the net profit grew till 2015

then took a sharp dip in 2016 before growing back again in 2017, but the revenue has

remained quite steady over the years. This shows that the company has remained

steady and enjoyed some good profitable years.

 Bibliography

 https://media-publications.bcg.com/india/Retail-Transformation.pdf

 https://www.ibef.org/download/Retail-January-2017.pdf

 https://www.equitymaster.com/research-it/sector-info/retail/Retailing-Sector-

Analysis-Report.asp

 https://www.slideshare.net/jinsesunny/indian-retail-industry-analysis

 https://www.ibef.org/economy/economic-survey-2015-16

 https://www.franchisehelp.com/industry-reports/retail-industry-report/

 http://www.ruthnbolton.com/Publications/RecentTrendsandPracticesinPricing.

pdf

 http://smallbusiness.chron.com/top-challenges-retail-industry-20404.html

 http://www.moneycontrol.com/india/stockpricequote/retail/adityabirlafashionretail

/PFR

 http://www.moneycontrol.com/india/stockpricequote/retail/futureretail/FR