Retail sector to grow to US$ 590 billion in 2012

The unorganised retail sector is expected to grow at about 10 percent per annum to reach US$ 496 billion in 2011-12 despite the steady expansion of organised retailers, according to a study by Indian Council for Research on International Economic Relations (ICRIER), a Delhi-based think tank.

The report on the impact of organised retail on small shop owners said the retail business in India would grow at 13 per cent annually from US$ 322 billion in 2006-07 to US$ 590 billion in 2011-12. The unorganised retail industry was valued at US$ 309 billion in 2006-07.

The organised retail that now constitutes a small four percent of the total industry is also likely to grow at a much faster pace of 45-50 per cent per annum and quadruple its share in total retail trade to 16 per cent by 2011-12, the report further stated. According to ICRIER, consumers have gained with the entry of organised retailers and their overall spending has also gone up. Furthermore, all income groups have also saved through organised retail purchases, especially the lower income consumers.

The report said farmers benefit significantly from the option of direct sales to organised retailers. The profits
earned by farmers from selling directly to the organised retailers are about 60 per cent higher than that they
receive from selling in local markets.

The study made certain recommendations like facilitation of cash-and-carry outlets, like Metro, for selling farmers' produce to unorganised retailers. Additionally, it urged for encouraging cooperatives and associations of unorganised retailers for direct procurement from suppliers and farmers. A move towards a nationwide uniform licensing regime in the states to facilitate modern retail and simplification of the licensing and permit regime for organised retail have also been recommended.

Courtesy:ibef