The $20-billion (around Rs 90,000 crore) organised retail sector has seen a space addition of 2.5-3 million square feet across formats in calendar year 2010, marking the end of the ‘hibernation and correction’ phase witnessed in 2009. Moreover, most large-format retailers like Aditya Birla Retail (ABRL), Shoppers Stop, and the Future Group, among others, have seen a 10-15% growth in same-store sales in 2010.
The growth in space addition was seen most in the hypermarket format, with an 8-10% increase in space addition this calendar year compared to the last. Currently, the organised retail segment forms a mere 5% of the $400 billion retail industry in the country, but is expected to garner a 24% share by 2020.
In 2010, while ABRL added close to 0.4 million sq ft, Big Bazaar saw a space addition of one million. On the other hand, both Spencers’ Retail and Lifestyle added 0.2 million sq ft and 0.4-0.5 million sq ft, respectively. Thomas Varghese, CEO, ABRL says, ?While 2009 was the year of hibernation and correction for retailers, 2010 was of rapid roll out of retail stores, especially in the second half of the financial year 2010-11. After the downturn in 2008-09, real estate owners abandoned their properties and malls were left unfinished. All those properties reached completion in 2010, and retailers could open new stores extensively.?
Saloni Nangia, senior VP & head- retail & consumer products, Technopak Advisors says, ?We observed an 8-10% increase in space in the hypermarket format by retailers such as Reliance, ABRL and Hypercity.” Shoppers Stop has a robust expansion ahead and plans to add 1.2 million sq ft of retail space across cities. Govind Shrikhande, managing director, Shoppers Stop says ?It has been a remarkable year for us as we went on to open 4 stores of Shoppers Stop in existing as well as new territory. Currently, we have 2.2 million sq ft space of Shoppers Stop and an additional 9 lakh sq ft under Hypercity. In the coming year, we plan to open 8 Shoppers Stop outlets and 4 HyperCity outlets which will translate into an addition of 1.2 million sq ft of shop floor.? Ernst & Young reckons that most retailers in the organised sector witnessed a healthy same-stores sales and have made significant investments in back-end infrastructure.