Retail, a fancied flavour in the “India Shining” years that led to the mushrooming of malls, multiplexes and chain stores, is now sobering, but still in the high growth zone, says a study by global consulting firm KPMG.
The study said on account of the current slowdown, the estimated penetration of organised retail, which was expected to touch 16 per cent by 2012, has been revised to 10.4 per cent.
The slowdown, which is expected to continue to last 12 to 18 months, has shaken the confidence of major retailers, but KPMG is still positive.
“The long-term retail story in India is intact because of low penetration of organised retail, favourable demographics and conducive economic environment,” said Ramesh Srinivas, head of consumer market advisory services at KPMG.
The report sees increasing focus on private labels, smaller cities, cost-consciousness, alliances and better management of supplies. The study also expects food retail to get more attention.
The study says the slowdown has adversely affected bottom lines, working capital availability, footfalls, sales, store expansion, recruitment, cost of finance and advertising expenditure.
“Bigger global players who have struck alliances with Indian retailers, however, are not likely to fundamentally change their strategy”, said Neil Austin, global head of markets, KPMG.