The Transformation of the Food and Grocery Retail Sector in India

In the fast changing face of retailing especially in food and grocery, shopping for products is no more a matter of non-fun mundane activity but an exciting and entertainment activity. The consumers of organised food retailing are demanding and even the consumers of unorganised food retailing are ready to welcome the add-on services at affordable price to have a better shopping experience. Although consumers" involvement of shopping for food and grocery items is very low, yet it is in metamorphosis state due to increasing levels of consumer awareness and availability of manifold branded products on qualitative and competitive basis.
The critical factors responsible for growth of organized retailing in India are consumer pull, rising income, explosion of media, change in consumer behavior, consumer cycle, the rural market – waking up. establishment of the supply chain, emergence of hubs of retail activity, change in scale of operations, entry of the corporate sector, new entrepreneurs, building chains around brands, foreign retailers looking for entry options and technological impacts. Organised retail has entered India through sprawling shopping centers, multi-storied malls, and huge complexes offering shopping, entertainment and food under one roof. The increasing numbers of nuclear families, easy financing options, and increase in the number of working women and emerging opportunities in the service sector during the past few years have been the vital factors for the organised retail sector in India.
Food & Grocery retail is about 67.6 per cent of total Indian retail market and 12.5 per cent of the organised retail market. Only 1.2 per cent of Food & Grocery retail in the country is organised and is estimated to become 1.8 per cent by 2011-12. Hence, there is a very large scope for the sector to expand. Reach to maximum number of consumers is the need of the hour and would require tremendous support and innovation in technology, logistics and supply chain. The opening up of FDI in multi-brand retail is awaited which, according to industry feedback, will benefit the back-end processes in SCM (supply chain management), storage and distribution. This will significantly increase retail margins by eliminating middle-men and providing the benefits of enhanced margins to the consumer. It is argued that the farmers will also get better prices and will help in improving their income and lifestyle. The major upheaval will come in the private label segment due to any change in FDI policy. Retailers' brands will compete with national brands in a big way as far as prices, quality and value for money are concerned. The key players of organised food and grocery retailing in India are Spencer's, More, Big Bazaar, KB's Fair Price, Reliance Retail. Spar, Easyday, Star Bazaar, Nature's Basket, Le Marche, Hypercity, and D-mart. Besides these, the regional key players of organised food and grocery retailing in India are Ratnadeep Supermarkets, Nilgiri's, Nuts 'n' Spices, Twenty Four Seven, Q- Mart, 6 Ten, Verkeys, and LM 365.