Indian unorganized retail sector would grow annually by 10%

Unorganized retail sector would grow annually by 10% to reach $ 496 billion by 2011/12, up from 309 billion in 2006/7, despite organized retail sector expansion:

 

According to a report from the parliament based on data from Indian Council for Research on Economic Relations, the Indian retail sector is expected to grow by 13% annually and from $ 322 billion in 2006/7 to 590 billion by 2011/12.

 

However, while taking into account the relatively weak financial position of the organized retail and the constraints in space of their expansion projects, this sector alone is not able to answer to the growing demand.  Organized retailing now accounts for a small 4% of the total retail sector and is expected to grow much more quicker at an annual pace of 45 to 50% and to quadruple its total share to 16% in 2011/12.

 

The report underlines however that small shopkeepers located near organized retailers have registered declining sales and profits after arrival of large players. Consumers have benefited from the situation and their global spending has grown up.

While all income groups saved when shopping at organized retail stores, the report underlines that lower-income households saved more. Farmers were large beneficiaries while selling directly to organized retailers making about 60% profit more than while selling in the local markets. 

 

The report gives also a few recommendations such as pushing cooperatives and non-organized retail associations to supply directly from farmers. It also recommends to facilitate cash & carry outlets to sell their merchandise to unorganized retailers and ease the license and modern store opening authorization towards a national uniform policy in all states facilitating the modern retail sector.

 

Source : The Economic Times