title-bar

Not Amazon, Flipkart: 4000 new retail stores needed to meet growing food, grocery, apparel demand

By: |
Published: April 11, 2019 8:22:22 PM

Strong demand in food & grocery and apparel categories may require 4,000 new retail stores, research and brokerage firm Motilal Oswal said in a report this week.

Future Retail: While retail stores may have suffered at the hands of e-commerce, they are likely to stay as a formidable force.

While retail stores may have suffered at the hands of e-commerce, they are likely to stay as a formidable force. Strong demand in food & grocery and apparel categories may require 4,000 new retail stores, research and brokerage firm Motilal Oswal said in a report this week. Retailers have witnessed an expansion in their footprint, revenue and overall growth, the report added, affirming that the future is not so bleak for retail stores as it seems.

Predicting a remarkable growth of retail market with its size expected to triple by FY25, the report also said that the food & grocery and apparel segments are likely to witness CAGR of 27% and 22%. It is to this growth that the report attributes the need for retail stores. “To cater to robust demand, about 4,000 new store additions will likely be required over the next eight years (2017-25), offering a huge runway of 15% CAGR in retail footprint over the next eight years,” Motilal Oswal said.

Big startups such as Paytm as well have recognised the charm that offline stores hold over consumers as they partnered with retail chains such as Croma, Reliance Digital etc to provide customers with a tactile experience. “The company has witnessed customers in India prefer to touch and feel the product before making a purchase. To ensure this, it has partnered with large format retail stores,” Paytm had earlier said.

With consumers becoming more modern, there is a need for Kirana stores to up their game as well. With the changing trends in household retail spends, traditional Kirana stores will find it difficult to thrive as consumers are moving to modern retail formats. Better prices and convenience of shopping is the main driving force behind that, Motilal Oswal report said.

However, retailers are likely to employ a few measures as well in a bid to cut operational costs. Expect leaner store layouts, cluster-based growth, focus on private labels and membership-based models in the future, the report added, as stores look to make their businesses more profitable.

Previously, another report had revealed that retail stores could be the future of tomorrow as e-commerce cannot fight with in-store shopper experiences. “The revolution in stores of tomorrow is to be brought by POP advertising, Store Fixtures, Signage, Props, Lighting etc,” In-Store Asia 2019 had projected.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition