Organised retail, which account for just 4-5 per cent share of the $300-billion retail market in the country, should be treated as an industry in view of its contribution to the overall economy and the Government should help promote India as a retail shopping destination, according to Mr Kabir Lumba, Managing Director, Lifestyle International Pvt Ltd (India), Bangalore.
He said his company, which would soon have about 100 stores under different formats, would grow the number to about 150 stores in the next three years. He told Business Line that while the retail market was growing at about 15 per cent annually, the organised retail market was growing at 20-40 per cent.
Eyeing Rs 4,000-cr turnover
He said the Lifestyle group expected to achieve a turnover of about Rs 2,000 crore by the end of March 2011 across three verticals in its Indian operations. This year, the company has grown by 60-70 per cent compared to last year. In the next two to three years, he expected the turnover to double to Rs 4,000 crore in India.
He said the company would soon have 29 Lifestyle departmental stores, 13 ‘Home Centre' stores for furniture and home décor and 52-55 Max value fashion retailing stores. When the turnover reaches Rs 4,000 crore, the number would go up to 40-45 Lifestyle stores, 16-17 Home Centres and 80-85 Max stores.
Mr Lumba said ‘growth was more or less equal' across both metro and Tier II markets, though the base in the metros was higher and there was room for growth there. The group was present in about 25 cities now, which would grow to about 35 cities in the next two to three years, implying that the expansion was taking place even in cities where it was present now because of the growth potential.
Views on FDI
On FDI in retail in India, he said the retail business had created huge job opportunities for young people in a short time.
For that, it required growth, which in turn needed investment and the investment available within the country was not enough to meet the potential. Growth in retail would also help reduce prices and bring down inflation.
If needed, the Government could adopt a calibrated approach as in the case of telecom and gradually open up the retail market.
Industry status
Mr Lumba said the Government should accord retail industry status so that it would benefit from ‘growth-friendly' policies.
The Government should also ensure uninterrupted power supply to retailers at a ‘fair price' to help the industry, which would promote tourism and help the country earn foreign exchange on the model of the Gulf States and cited the Dubai shopping festival which has become hugely popular drawing a large number of tourists, including from India.