Retail Dude

This economic downturn definitely hitted hard the retail business, a business where retailer operates on razor thin margins. And in this time of crisis along with the stock market these margins also dropped, because despite of losses in this period of economic slowdown, the money required for proper operation of existing structure of particular retailer comes from these margins only. But all these retailers are hoping for a dawn after this dark, the dawn of Christmas festive season. As Nielsen reported that, this year, U.S. consumers are expected to spend more than $98 billion during the November-December holiday retail season, and every retailer is eyeing on that amount.

But there are some retailers that not only fought with the toughest economic condition but posted stellar financial results. While other retailers are struggling to support their existing retail structure, these retailers have ambitious plans to open new stores throughout the remainder of 2008 and well into 2009. Some of them are big names while some are small retailers with big dreams of expansion, but at this time what really matters is their surprising success during this crisis. The List of these retailers who beat the odds is -

1.       Target                              - to open 45 new stores

2.       Aeropostale                    - to open 100 stores during the next 18 months

3.       The Buckle                      - In September, same-store sales rose 19.7 percent

4.       Family Dollar                  - to open approximately 200 new stores

5.       RadioShack                      - In September, same store sales grew 7.7 percent

6.       DSW Shoes                      - projected goal of 35 new locations in 2008

7.       KB Toys                            - to open 30 seasonal stores across the country just in time for the holiday season

8.       Tractor Supply                - 21 new store openings for the remainder of 2008

9.       Ulta Salon Cosmetics & Fragrance - plans to add 180 stores over the next two years

10.   PriceSmart                      - same-store sales for September 2008 rose 15.3 percent.

-Prateek Katiyar

Sources- Nielsen, RIS News

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The title of the article has been borrowed from the article found at Knowledge@Wharton, Which helped me answer some of the questions running in my head regarding the complex consumer class in India, The statistics are right about India, its our third consecutive year at the top of GRDI and our consumer goods market is expected to reach $400 Billionby 2010, but we are the same consumer class, who have readily accepted the 100 bucks pop corns at PVR’s but bargain with the auto wallah on our way. We are the same class who have far exceeded any one’s expectation in the mobile market but still have the least mobile Internet penetration, The question is simple: How to capture this complex consumer class?

The article suggests that although the attitude is shifting towards consumerism, being individually poor but collectively rich is what differentiate India from rest of the world, with a large part of the population living below the mark of $1 per day, India still holds a tremendous untapped middle market, and this is what we all will agree to! Its our population which has turned out to be a boon for us, be it the outsourcing mania or now retailing, its the numbers which is making the heads turn towards India!

We can notice the changing trends, as more and more families gain economic independence because of the continued industrialization of the country, the focus of the consumer is shifting from the basic amenities like food and clothing to more advanced consumptions like mobiles and health care, but to capture these markets, retailers need to adopt to strategic mix of pricing and values, as we still are guided by both. A casual surf around landed me at the case of Ram Das Mohan Lal Maheshwari which has strategically crafted this proposition of both price and values, thus firming up the belief. The store, established 60 years back, has over the time offered an optimum mix of price and values, Which so far has skipped out of the hands of the new organized retailers, but this doesn’t necessarily means that the organized retailing is entirely at fault. Rising real estate pricing, and fresh money in the hands of the young consumers have made the numbers go wrong.

Although, Pricing and Values are a sure shot strategy of winning this question, the article suggests that recent researches have shown that the Indian consumer is fast shifting over to the products which are relevant to there experience, As Rajeev Karwal has cited in the article:

“Karwal cited the mobile phone as an example of a product that offers a high degree of functionality at a good price. “It is equipped with features such as a dust-resistant keypad and a built-in flashlight that not only aid truck drivers on India’s poorly lit highways, but also take away the villager’s embarrassment over the lack of electricity. Customized to the Indian market and reflecting the importance of price and value rolled into one, the mobile phone now serves as a great benchmark for market penetration. It is no wonder that the number of mobile phone subscribers far outweighs the number of Internet or credit card users in India”

So, its still a war out there, between pricing and values, and now a different virtue - Experince, Which is although new to a majority of Indian Consumers, but is fast catching up!

India stands as a challenge to all to management theories, I have the numbers, do you have the strategy?

- Sarthak

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The U.S. has Wal-Mart. France has Carrefour. Each country has a retailer that has become the biggest and best, and the one to catch up to. From the 11th annual “Global Powers of Retailing” report compiled by Deloitte Touche Tohmatsu and STORES Magazine, this is the list of the retailers who are leading the way for the retail industry in their homeland. (This list is arranged alphabetically by country, not according to sales or revenue.)

Australia – Woolworths Ltd.
Convenience/Forecourt Store, Discount Department Store, Electronics Specialty, Other Specialty, Supermarket

Austria – SPAR Oster-reichische Warenhandels-AG
Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket

Belgium – Delhaize Group
Cash & Carry/Warehouse Club, Convenience/Forecourt Store, Drug Store/Pharmacy, Hypermarket/Supercenter/Superstore, Other Specialty Supermarket

Brazil – Comanhia Brasileira de Distribuicao SA Grupo Pao De Acucar
Convenience/Forecourt Store, Electronics Specialty, Hypermarket/Supercenter/Superstore, Supermarket

Canada – Loblaw Companies, Ltd.
Cash & Carry/Warehouse Club, Discount Store, Hypermarket/Supercenter/Superstore, Supermarket

Chile – S.A.C.I. Falabella
Department Store, Home Improvement, Hypermarket/Supercenter/Superstore

China – Bailian Group
Convenience/Forecourt Store, Department Store, Home Improvement, Hypermarket/Supercenter/Superstore, Supermarket

Denmark – Dansk Supermarked A/S
Apparel/Footwear Specialty, Department Store, Discount Store, Hypermarket/Supercenter/Superstore

Finland – S Group (SOK)
Apparel/Footwear specialty, Convenience/Forecourt Store, Department Store, Discount Store, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket

France - Carrefour
Cash and Carry/Warehouse Club, Discount Department Store, Hypermarket/Supercenter/Superstore, Supermarket, convenience/forecourt store

Germany - Metro AG
Apparel/Footwear Specialty, Cash & Carry/Warehouse Club, Department Store, Electronics, Specialty, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket

Hong Kong – AS Watson & Company Ltd. SAR
Discount Store, Drug Store/Pharmacy, Electronics Specialty, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket

Hungary – CBA Kereske-delmi Kft.
Supermarket

Iceland – Baugur Group hf.
Apparel/Footwear Specialty, Cash & Carry/Warehouse Club, Convenience/Forecourt Store, Department Store, Discount Store, Drug Store/Pharmacy, Electronics Specialty, Other Specialty Supermarket

Italy – Coop Italia
Discount Store, Hypermarket/Supercenter/Superstore, Supermarket, Hypermarket/Supercenter/Superstore

Mexico – Organizacion Soriana S.A. de C.V.
Cash & Carry/Warehouse Club, Hypermarket/Supercenter/Superstore

Netherlands – Koninklijke Ahold N.V
Convenience/Forecourt Store, Discount Store, Drug Store/Pharmacy, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket

Portugal – Jeronimo Martins, SGPS SA
Cash & Carry/Warehouse Club, Discount Store, Hypermarket/Supercenter/Superstore, Supermarket

Russia – X5 Retail Group N.V.
Convenience/Forecourt Store, Discount Store, Hypermarket/Supercenter/Superstore, Supermarket

South Africa – Pick ‘n Pay Stores Ltd.
Apparel/Footwear Specialty, Convenience/Forecourt Store, Drug Store/Pharmacy, Home Improvement, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket

South Korea — Lotte Shopping Co., Ltd.
Department Store, Hypermarket/Supercenter/Superstore, Supermarket

Spain – El Corte Ingles, S.A.
Apparel/Footwear Specialty, Convenience/Forecourt Store, Department Store, Electronics Specialty, Home Improvement, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket

Sweden – The IKEA Group
Other Specialty

Switzerland – Migros-Genos-senschafts Bund
Apparel/Footwear Specialty, Convenience/Forecourt Store, Department Store, Discount Store, Electronics Specialty, Hypermarket/Supercenter/Superstore, Other Specialty, Supermarket

Taiwan – President Chain Store Corp.
Convenience/Forecourt Store, Department Store, Drug Store/Pharmacy, Other Specialty, Supermarket

Turkey – Koc Holding/Migros Turk TAS
Discount Store, Hypermarket/Supercenter/Superstore, Supermarket

United Kingdom – Tesco
Convenience/Forecourt Store, Department Store, Discount Department Store, Hypermarket/Supercenter/Superstore, Supermarket

United States – Wal-Mart Stores
Cash and Carry/Warehouse Club, Discount Department Store, Hypermarket/Supercenter/Superstore, Supermarket

- Prateek Katiyar

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