The Hindu Business Line : Falling property prices to aid retailers, say experts

Cautious expansion: (From left) Mr R. Subramanian, Conference Chairman and Managing Director, Subhiksha Trading Services; Mr B.S. Nagesh, Managing Director, Shopper’s Stop Ltd; Mr Pradipta K Mohapatra, Immediate Past Chairman CII-Southern Region; Mr Manikam Ramaswami, Chairman, CII, Tamil Nadu; and Mr C.K. Ranganathan, Vice-Chairman, CII, Tamil Nadu, at a conference on ‘Retailing for India’ organised by CII in Chennai on Tuesday. — Bijoy Ghosh

Our Bureau

Chennai, Dec. 2 The global meltdown does cast its shadow on the Indian retail sector resulting in lower offtake across categories, barring the food and groceries segment, say experts.

Speaking at a conference on ‘Retailing for India’, organised here by the Confederation of Indian Industry, they said, however, with the falling property prices, the industry will expand — albeit cautiously.

Industry captains feel that though property prices have already fallen by 20–25 per cent from the levels they were in the early part of this year.

“We are expecting another 30-40 per cent correction in the months to come, when we can take our expansion plans forward,” said Mr R. Subramanian, Managing Director of the discount retail chain Subhiksha, and Conference Chairman.

Citing Amma Nana, a stand-alone retail store in Chennai, as an example, Mr Pradipta K. Mohapatra, Immediate Past Chairman, CII-Southern Region, said though the industry failed to grow the way it was expected, it is at an inflection point.

The organised segment will capture at least 10 per cent of the industry in the next couple of years, driven by food and groceries and apparels. By 2010, at least three retail companies will cross $1 billion turnover.

Mr Mohapatra blamed the retail industry for the ‘exorbitant’ cost of personnel. “Retail companies have been offering compensations to its executives, which are unsustainable, and this is the right time to correct the trend by rationalising compensations,” he said.

The CII also released a joint study with PricewaterhouseCoopers on the Retail and Consumer Industry – The Benefits of Modern Trade to Transitional Economies.

According to the study, the retail industry will be a critical enabler for the rural, semi-urban and urban employment.

Every 50,000 sq. ft of retail space developed will create employment opportunities for at least 200 people.

Nearly two million individuals will be employed by the industry by 2010, and 50 per cent of them will be women.

Presenting the study, Mr N.V. Sivakumar, Executive Director, Financial Advisory Services, PricewaterhouseCoopers Pvt Ltd, said the growth of organised retail will also lead to creation of local distribution channels in India, which in turn will improve the quality of produce available in the market place.

“Farmers can also be benefited by being integrated into the supply chain system,” he said.

More Stories on : Real Estate & Construction | Retailing

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page