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315 hypermarkets likely in tier I & II cities by 2011: ASSOCHAM

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Yet another example of the buoyant retail sector in India: 315 hypermarkets will come up in most of tier I and II cities by 2011 and sell off all articles from automobiles to needles under one roof, forecasts a joint study by ASSOCHAM and KPMG.

The study named `Reinventing India’s Retail Sector’ in its analysis of feasibility of hypermarkets in tier I and II towns between 2008-11 points out that even in year 2008, 212 towns have sufficient market potential for hypermarkets for break-even existence. That this potential has yet to be realised is a different matter. But this fact of the huge potential that smaller towns have to offer modern retail was reiterated by founder and CEO of Future Group, Kishore Biyani at the recently concluded India Retail Forum where he spoke about impressive turnovers that the company has been able to achieve from their foray into smaller towns/rural areas.

Organised retail, which is growing at 20 per cent annually, is encouraging mall building activities at a phenomenal rate which would ultimately amount to creation of chains of hypermarkets, reveals the study.

Releasing the study, ASSOCHAM president Sajjan Jindal said that given the expected growth in number of households as well as in income and consumption per household in urban India, particularly in its leading 25 towns, five or more hypermarkets per city are feasible even in 2008.

He further added, “Going forward, in 2011, this number is anticipated to grow to 52 as a few tier III towns also gain the market potential to support 5 or more hypermarkets. Tier IV towns that constitute the bottom of the pyramid, considered for this analysis emerge as unviable for modern retail formats not only in 2008 but also in 2011.”

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