Organised Retailing

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Category: Business and Industry

Date Submitted: 10/16/2010 12:59 AM

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Organised retail segment has been growing at a blistering pace, exceeding all previous estimates.The fastest growing segments have been the wholesale cash and carry stores (150 per cent) followed by supermarkets (100 per cent) and hypermarkets (75-80 per cent). Further, it estimates the organised segment to account for 25 per cent of the total sales

by 2011.The Indian retail market, which is the fifth largest retail destination globally, according

to industry estimates is estimated to grow from the US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by 2015.

Amidst all these milestones the organised retailing has still a long way to go. The country lacks quality logistics infrastructure which hinders scaling up of retailing operations. Supply chain management(SCM) systems have very low penetration especially in the vast rural hinterland. There is also no reliable national cold chain system, leading to enormous wastages especially in rural India (unofficial loss estimates are over Rs 50,000 crore in food products alone).

Key issue arises from the fact that the bulk of retailing in India is in food and grocery. India has one of the largest numbers of retail outlets in the world. Of the 12 million retail outlets present in the country, nearly 5 million sell food and related products. Inconsistent agriculture and fertilizer subsidies by states lead to price anomalies and variations for the same product; this leads to supply chain inefficiencies. Power, transport, communication and IT infrastructure issues creates difficulty in sustaining retail operations across the country. Stringent laws prevent the much needed growth in real estate development which is imperative for retail growth.

Taxation is still a complex issue in Indian scenario. The Government urgently needs to recognize the fact that players in the industry leading the countryĆ­s economic transformation are plagued with different tax structures...