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The changing demographic profile of the country with a third of its population under 14-years of age, the rise in the number of working women besides the growing number of consumers with an outlook on value-for-money spending would propel growth of organized retail houses.

FOCUS ON RETAIL: Mr N.S. Muthukumaran, Director, A C Nielsen-ORG MARG, Bangalore, at a BL Club meeting at Sri Krishna College of Engineering and Technology in Coimbatore. — S. Siva Saravanan

Coimbatore April 26 Consumer patronage for organised/modern retail formats is stronger in the South metros and urban centres compared to its peers in other regions in the country.

While the average sale of fast moving consumer goods (FMCG) through organised retailing at the national level constitutes only around 2-3% per cent, the percentage share for this from the southern modern retail formats works out at 20-23%.

Kerala's commercial capital of Kochi came on top in recording large volume sale through modern retail stores and Coimbatore in Tamil Nadu has taken the fourth spot in according high volume sale for the organised retailers, according to Mr N.S. Muthukumaran, Director, Online Research and Technical Training, AC Nielsen ORG-MARG Pvt Ltd, Bangalore.

The retail consumer market studies done for 2005-06 by the Nielsen company have found that the next round growth of organised retailing would involve about 160 towns/district centres in the country.

The share of modern trade format stores in retail trade in the country is projected to rise to 10 per cent by 2010 from the present 2 per cent when the number of format stores would be around 5,500.

This would mean that the modern retail stores in metros would garner 30 per cent of FMCG retailing from the present 10 per cent.

Mr Muthukumar was delivering a keynote address at `CEO-Speak', a management programme organised under the aegis of the `Business Line' Club of the School of Management (SoM) in Sri Krishna College of Engineering and Technology at Kuniamuthur here.

The driver for the growth of organised retailing would come from foreign direct investment in retailing and the higher GDP growth.

The changing demographic profile of the country with a third of its population under 14 years of age, the rise in the number of working women and change in their lifestyle, besides the growing number of consumers with an outlook on value-for-money spending would propel growth of organised retail houses.

Change dynamics

The dynamics of retailing in recent times are changing towards favouring convenient stores as signalled in the shifting sale of over-the-counter medicine business from traditional chemists to grocery stores. Even as organised retail stores could steadily increase higher footprints, the traditional retailers' market share in grocery sale in 2006 fell to 74 per cent from 82 per cent in 2005.

In the light of the evolving modern retail trade, the market researchers trying to capture the consumer behaviour vis-à-vis the income levels of households, have found the existing socio-economic classification (SEC) proving inadequate to gauge consumer behaviour.

To reflect this, the Market Research Society of India has undertaken a revamp of the 1986 SEC so as to incorporate additional variables that could sharply discriminate the income levels in urban and rural households, Mr Muthukumaran said.

Among those who were present at the programme included Dr S. Subramanian, Director of SoM, Dr T. Srinivasan, Dean of the college, and Mr D. Rajkumar, Senior Regional Manager, The Hindu, Coimbatore.

More Stories on : Retailing | Events | Tamil Nadu

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