Retail Dude

We just “love” acronyms! ASSOCHAM, FICCI, IIT, NatGeo, SET et-ce-te-ra.

Oops! Forgot MBA completely ;-P  Oh My God, the title above can also be called MBA. Just joking!

There was this article on Mint, yesterday (read at http://epaper.livemint.com/Default.aspx?selpg=883&selDt=12/15/2008&BMode=100 ). Many other news-media have been reporting similar analysis, of the “Organised Retail” scenario, one after another.

Factually, retail takes 3rd place after economy & terror, on print media!

At the same time I find bold expansion plans or entry plans of new corporations, into this same hot-spot! What’s up guys? Agreed that organised retail has a very long way to go, from the measly 5% share. Also agreed that retail real-estate prices/rentals have “corrected” by at least 20%. And I do agree that FMCG consumption is likely to remain bouyant too.

Even then, how does it make sense to sink fresh investment in retail, at this juncture? Specially by the “unititiated”? If you read the Mint article carefully, you’ll find definite insecurities (about the industry), expressed in very subtle terms. Example: “If the organised retailers get on to the right model, it can grow by 20-25%”. Key words here - If, right model, can. All very “iffy”.

Big bosses like KB & others are all doing some “cutting-shutting” (remember that ad featuring two kids?) Which is very appropriate. Surgery is almost always the 1st resort. Chemo comes closer towards the end.

This scenario is very dicey! Who has so much surplus funds, to let them earn returns on such a long-tail cycle? If they do, why aren’t they investing the same in much safer (in the short term at least) ventures? Is there a grey area here?

India cannot afford to lose more money chasing bad. The effects will be catastrophic! I really hope we are not turning into a country run by Blind managers, following in the footsteps of our blinkered politicians.

Belt up, we are perilously close……

- Arnab

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