Indian Retail Industry: Introduction

The Indian retail industry is one of the fastest growing in the world. Retail industry in India is

expected to grow to US$ 1,200 billion by 2021 from US$ 672 billion in 2017.

India is the fifth largest preferred retail destination globally. The country is among the highest

in the world in terms of per capita retail store availability. India’s retail sector is experiencing

exponential growth, with retail development taking place not just in major cities and metros,

but also in Tier-II and Tier-III cities. Healthy economic growth, changing demographic

profile, increasing disposable incomes, urbanisation, changing consumer tastes and

preferences are the other factors driving growth in the organised retail market in India.

India’s population is taking to online retail in a big way. Online retail sale is growing at the

rate of 31 per cent to reach US$ 32.70 billion in 2018. Revenue generated from online retail

is projected to grow to US$ 60 billion by 2020. Organised retail penetration is expected to

increase to 18 per cent in 2021 from 9 per cent in 2017. India is expected to become the

world's third-largest consumer economy, reaching US$ 400 billion in consumption by 2025.

Increasing participation from foreign and private players has given a boost to Indian retail

industry. India’s price competitiveness attracts large retail players to use it as a sourcing base.

Global retailers such as Walmart, GAP, Tesco and JC Penney are increasing their sourcing

from India and are moving from third-party buying offices to establishing their own wholly-

owned/wholly-managed sourcing and buying offices. India’s retail sector investments

doubled to reach Rs. 1,300 cr (US$ 180.18 million) in 2018.* The Government of India has

introduced reforms to attract Foreign Direct Investment (FDI) in retail industry. The

government has approved 51 per cent FDI in multi-brand retail and 100 per cent in single

brand retail under the automatic route which is expected to give a boost to ease of doing

business and Make in India, and plans to allow 100 per cent FDI in e-commerce. India will

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become a favourable market for fashion retailers on the back of a large young adult consumer

base, increasing disposable incomes and relaxed FDI norms.

Objective:

Objectives of this project are as follows:

 To study a retail store inventory management.

 Supply chain management.

 Categories and products.

Retail store: Food Palace Supermarket, HSR Layout, Bengaluru

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Retail Store Introduction:

Food palace supermarket was established in 1995 at HSR layout. The store has various

products in department store segment. This is one shopping destination for daily use products

from personal care to grocery items. The store has different vendors and distributers as per

their requirement in different categories. It has a basement based warehouse for own

inventory. They have their own inventory management system as per their sales. They are

active on social media and have their page on facebook and instagram. To keep themselves

updated about different new products and bestsellers, they actively look for new information

and customer feedbacks. The owner has 5 different stores in Bengaluru city. The layout of

HSR store is as follow:

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Categories:

They are actively selling each and every category’s product. The sales of products depend

upon the customer demand. They have 10 major categories:

1. Grocery

2. Instant food

3. Personal & Home Care

4. Cosmetics

5. Kitchen & tools

6. Stationary

7. Dairy products

8. House hold tools & utilities items

9. Tobacco products

10. Beverages & desserts

At one time the store has at least 10,000 products in each category on display. The fastest

selling category is instant food items. For this category, they have to maintain most inventory

on time. The slowest selling category is kitchen & home décor, thus they maintain inventory

once in a 2 months for this category. On the entry, they have a small VM counter for

particular brand on display. Brands or products get changed over in each 2 months as per

their contract. Currently they have 60 body care products of brand Himalaya on display for

next 2 months.

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Grocery:

In this segment, the store has a to z products for a house. Different types of cereals, spices,

dry fruits etc. The information are as follows:

Products Volume available Price(in INR) Inventory

Cereals 0.5 kg to 10 kg 40-50 per kg to 100- 10 pieces per product

140 per kg

Dry fruits & nuts 100 gms to 2 kg 500- 1200 per kg 5 Pcs per product

Edible oils 100 ml to 10 ltr 80-250 per ltr 5 pcs per product

Sugar & salt 500 gms to 5kg 18-30 to 50-80 per kg 10 pcs per product

Spices 100 gms to 500 gms 30-100 per 100 gms 10 pcs per product

Atta & flours 1 kg to 20 kg 20 to 50 per kg 5 pcs per product

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Instant Food:

This is the fastest selling items in store. These items has customer from all age groups and

classes. Easy to cock and consume is the new policy working for consumers. Either once in a

week or twice, the store has to manage inventory in this segment.

Products Volume available Price(in INR) Inventory

Maggi Single pc to 6 pcs 12 to 64 50 pieces per product

Instant noodles 100 gms to 400 gms 15 to 25 per 100 gms 30 Pcs per product

Chocolates 10gms to 300gms 10 to 600 50 pcs per product

Ice-creams 20 gms to 500 gms 18-30 to 450 5 pcs per product

Packed parota 5 pcs per packet 80 per packet 10 pcs per product

Ice creams and some food items are checked on daily basis as per their life cycle. The

inventory cost is also high in case preservation and need proper handling and care.

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Personal & Home Care:

In this segment, the store has large number of products. This category is spread all over the

store due to its variations. They have Deodorant’s segment just right in front of entry gate and

rest of the products are inside. From Body care to hair care, from head to toe they have

solution for every demand. Here are the list:

Products Brand available Price(in INR) Inventory

Hair care Garnier, Dove, As per MRP 10 pieces per product

Panteen, Head &

shoulder, Himalayas

Bath care Dove, Himalayas, As per MRP 10 Pcs per product

Nivea, Wildstone

Sanitizer Dettol, Savlon, As per MRP 10 pcs per product

Lifebuoy,

Sanitory HUL products, As per MRP 10 pcs per product

Gillette,

Face Care Garnier, Himalayas, As per MRP 10 pcs per product

Nivea, Pond, Lakme

Cleaner & Harpic, Surf excel, As per MRP 10 Pcs per product

Dishwashers ariel, Vim, Lizol

In this category the store often offers discount on various products on different occasion.

They have “buy 1 get 1” or flat 50% discount o products depend upon company offer.

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Daily utility products:

This category again has very large number of products. From kitchen tool to bathing bucket,

they have every product as per consumer requirement. The classification is as follows:

House hold tools: Bucket, Containers, ropes, cleaning brushes, fresheners and ritual needs.

Kitchen tools: Knife, Scissors, Dining & se rving tools, storage etc.

Bags & Travel accessories: torches, battery etc.

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Dairy Products:

Managing dairy product inventory is not an easy task but the store is doing this job pretty

well. The primary task is to receive daily product on daily basis, checking the price, expiry

date and weight. The category has following products:

Products Variation Price(in INR) Inventory

Milk Toned, full cream As per MRP 200pieces per

product

Curd N/A As per MRP 100 Pcs per product

Paneer 100 gms to 500 gms As per MRP 20 pcs per product

Beverages Lassi, Butter milk, As per MRP 50 pcs per product

cold drinks

Bakery items Breads, Cakes, As per MRP 10 pcs per product

biscuits, chips

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Inventory Management:

Managing inventory is different for different categories. There are several factors as cost,

availability, demand, product life cycle which affects inventory. The store manages most

selling categories on daily or weekly basis while the least selling has monthly cycle. The

table is as follows:

Category Inventory repetition

Grocery Weekly

Dairy products & beverages Daily

Personal & home care weekly

Kitchen & utensils Monthly or 2 months

Instant food Twice a week or weekly

Stationary Monthly

Cosmetics & tobacco products weekly

85% of their inventory gets updated on weekly basis. The store staffs match both entry and

sale sheet together to count inventory and cash. The store has 25-28 staffs on regular basis to

maintain inventory.

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Supply Chain Management:

The store has various vendors for various categories. For examples grocery items are coming

from RMC market, Yashwantpur. Every product is coming from distributers to their end.

There are 12-15 vendors for all categories. They are following basic supply chain model. The

product is coming from company warehouse to distributer and then from there to the store.

The store is running on two shifts.

Grocery- RMC market, Yashwantpur

Dairy product- Nandini milk company

Personal care- Hindustan Unilever

Company
Distributer Store
warehouse

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