As per India Retail Report 2015, India’s retail market is worth Rs.3,893,425 Cr (US$ 649 bn) which is growing at over 16 per cent per annum.
The retail market is generally influenced by the consumption trend and patterns among the populations. This trend and pattern is captured by NSSO in its household surveys on consumption of various products and services in rural and urban areas. These products and services grouped under different categories reflect monthly expenditure incurred on buying and consuming them. The regional retail market is calculated based on these
figures estimated for each state and UT separately. Clubbing them together to define a region, gives us the share of consumption on regional basis. Adopting this approach the size of retail market in western region of India has been estimated. Total retail market size in western region of India is Rs.855,269 Cr (US$ 142.5 bn) which forms 22 per cent of all-India retail market. The categories of Entertainment, Gaming, Beauty, Personal care and Fitness at regional level, however, have little higher contribution to their respective all-India retail market at 24 per cent and above.
Modern Retail
As per India Retail Report 2015, all-India modern retail market size is worth Rs.376, 827 Cr (US$ 62.80 bn) which is growing at around 30 per cent per annum. Modern retail is growing appreciably in the western region of the country as well, as is the case in other parts of the country. However, it is not possible to estimate regional modern retail market size in the absence of region-specific sales data of modern retailers. Nevertheless Images Retail keep receiving and compiling information on business performance and retail presence of modern retailers during its various events. Based on the same the responsible comments are being made on regional modern retail market size & its trends in this report. With the available information on sales, number of outlets and related retail space of 85 national retailers (excluding non-store retailers) across all categories, Images Retail has been able to derive some key insights on region’s Modern Retail environment. Combined annual retail sale of these retailers
is Rs.38,000 Cr which forms around 10 per cent share of total modern retail market in India. The combined sale revenue of the retailers grew by robust 38 per cent over previous year as against all-India growth of 30 per cent per annum. Based on their retail presence in various states of the country it was found that west region holds a share of 29 per cent in the total sale with Maharashtra contributing highest share of 72 per cent in that share. The next highest contributor is Gujarat with 20 per cent contribution to the region’s modern retail sales. Union Territories of Dadra & Nagar
Haveli and Daman & Diu have practically no contribution at all. This is attributed to the fact that none of these 85 retailers has retail presence in these areas. On comparing region’s average store size and annual sale per store with the averages at all-India level,
it was observed that the modern retailers in the region are operating with bigger stores and driving higher sales. With 19 per cent larger average store size the region is able to draw 24 per cent higher sales than national sale average. This translates into region’s monthly Sale density of Rs. 954 which is also 7 per cent higher than National Sale density. It is found that larger average store size in the region is due to presence
of higher number of large sized retail outlets. For instance, west region houses 97 Department stores and Hypermarkets combined together which is second only to the region of South India. Similarly number of multiplexes in western region is highest amongst all regions of India. The high number of such larger sized outlets adds up to the overall average store size in the region.
Retail Mix on the basis of Revenue
Modern retailers in the region were grouped under sixteen different retail categories depending upon their retail offering to understand sale trend. The data reflected some
interesting facts in West India’s modern retailing. In terms of retail revenue one-third of total revenue comes from Entertainment category thanks to the multiplexes present
in the region. On a deeper look it is found that more than 90 per cent of share in the category’s revenue is held by Maharashtra and Gujarat together. Big box retail formats like Department stores and Hypermarket together is another category with second highest contribution to the revenue of the region. Together they have 29 per cent share in the revenue with 97 outlets spread in various cities of the region as mentioned above. Little over three fourth of these outlets are based in cities of Maharashtra alone.
Retail Mix on the basis of number of outlets
The retail expansion happens by adding new outlets in the retail chain. As this number keeps growing in different geographies it keeps shaping and reshaping regional retail
presence of the retailer. Based on the same parameter small & medium (store size of less than 5,000 sq ft) sized retail outlets selling fashion merchandise, accessories along with outlets selling mobile & telecom products & services together hold more than 45 per cent share of retail presence in the region. The concerned merchandise being retailed through these outlets do not require large retail space and thus have more scalability and expandability owing to their capacity to serve smaller catchments with low investments. The segment which follows them is Food service which holds 10 per cent share in terms of number of outlets in the region. The constituting retailers were primarily fast food players which operate multiple outlets within smaller catchments or are present in smaller distances between their two outlets. Thus Food service segment
also appear to follow similar trend of retail presence as the other mentioned retail categories.
Retail Mix on the basis of Retail Space
Besides the retail revenue retail space also plays significant role in yielding retailer’s overall performance. In terms of retail space the region holds a share of 27 per cent of all-India retail space. In this share formats like Large fashion stores (store size of more than 5,000 sq ft), Multiplexes, Department stores and Hypermarkets together consume 72 per cent of region’s total retail space. The first two formats are operating with average store size of 20,000 sq ft, Department stores have 33,000 sq ft and Hypermarkets in the region have highest average store size of 44,000 sq ft. interestingly Home & Office Improvement stores also reflect average store size of 20,000 sq ft but their share in the region’s retail presence is miniscule of 0.4 per cent. This makes Home & Office improvement category contribute only around 2 per cent to region’s total retail space. In terms of State wise diversity, Maharashtra has highest
average store size of 4,960 sq ft which is even higher than the region’s average. At the same time Goa reflects lowest average store size.
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