Indian Retail Industry -Pantaloon Retail (India) Ltd. A Case Example – Part I

Introduction

Retail trade may be defined as “the resale of new and used goods to final consumers for personal and household consumption” (Australian Bureau of Statistics, 1978, pp.1032). Owing to the vastness of this sector in the global business context it has been reported that “almost one-third of each Dollar, Euro or Yuan spent is on consumption goods; nearly one in six non-firm employees works in wholesale or retail trade” (Cassia, Fattore & Paleari, 2006, pp.219). In the current age of globalization, which is marked by numerous changes that are taking place almost every day, if not less, in order to redefine the concepts of business, it is a noteworthy fact that the biggest private company is none other than a retailer.

The significant role that is played by the retail industry by virtue of being a vital economic sector can be deciphered from the fact that “retail commerce has been the essence of trade ever since the birth and development of markets, that is, physical locations where this activity took place” (Cassia, Fattore & Paleari, 2006, pp.219), and this in turn indicates that the retail sector is nearly indispensable for the economic growth of any nation. Although the activities pertaining to the retail sector are spread over a wide spectrum, they may be broadly categorized into (1) food and (2) non-food. This sector has a commendable size and it has been observed that “from a geographic perspective half of retail trade sales are in North America and one-quarter in Asia, while food retail is equally divided between the previous two and the rest of the world” (Cassia, Fattore & Paleari, 2006, pp.220).

Cassia et al. (2006) have reported that the global market value of food and non-food retail were close to $3 trillion and $4 trillion respectively in 2002, and their respective average growth rates were approximately 4 per cent and 5 per cent. These figures indicate the huge potential of the retail sector taken as a whole, and has been mentioned earlier, their importance to the global economy. Almost all goods that are sold aim at satisfying primary needs such as food, clothes, etc., and hence growth experienced by the retail sector is strictly associated with customer expenditure as well as gross domestic product (GDP). Consumers’ confidence also plays an important role, particularly in the context of the retail areas that are connected to cyclical and secondary goods.

Read the full post(Requires Facebook Login)