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Organized retail to see grow faster than GDP: KPMG
By agencies
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Thursday, 29 September 2005, 19:30 IST
NEW DELHI: Driven by changing lifestyles, higher disposable income and favorable demographic patterns, the organized retailing will grow faster in India than the GDP, a KPMG report said.
The report titled `Consumer Markets in India: the next big thing?' said the retailing sector is developing fast with shopping malls becoming common in large cities and the addition of 150 new shopping malls by 2008.
The report said the annual growth of department stores is 24 percent, much higher than retail; and supermarkets have captured a higher share of general food and grocery trade over the last two decades.
Higher disposable incomes are specific to urban areas, `well-off' and affluent classes and the growing number of double-income households, the report said adding the potential of rural areas has been grossly under estimated.
The report said as the Indian market is evolving gradually; there is hidden consumption power in the low-income rural areas that the companies can target. The growth of the retail sector is expected to double if consumer companies can reach untapped areas.
With the advent of specialized retailers in consumer durables and white goods, books, music, lifestyle goods, household furnishings, furniture, healthcare & beauty, etc, the Indian retailing is undergoing a slow but major shift.
The consumers are moving away from total reliance on countless small family-run stores towards larger, more formal retail outlets, the report said adding foreign retailers who want to do business in India, cost of retail space, FDI controls, `unorganized' sector competition, shortage of urban retail space could be a cause of concern.