Modern format stores show growth spurt, though 90 per cent sales in India still through traditional stores

By , agencyfaqs! | In Others
Last updated : October 20, 2006
ShoppersTrends, an annual report by ACNielsen, which tracks the retail market, reveals some interesting facts


has released its annual report, the ShoppersTrends report. The report brings to light interesting growth related facts vis-à-vis the retail industry. The report claims that modern format stores are on a growth path and account for 11 per cent of sales in the 23 leading cities of India.

Hypermarkets have performed better than supermarket stores, which grew by only 5 per cent during 2005; at present, less than 20 per cent of household shoppers in key cities are regular supermarket shoppers. Hypermarkets have posted better growth with their number growing by 57 per cent from 2004 to 2005. 

"China is 36 times more developed than India. Here, we have just one modern store for every 400,000 people, which is why the scope of expansion here is huge. Many companies are willing to invest in the Indian retail sector," says Sujit Das Munshi, executive director, Retail Management Services, ACNielsen, South Asia. 

Indian consumers give preference to store accessibility, quality of products, loyalty programmes and product assortment over pricing. The study says that the Indian consumer will settle easily for convenience and not mind higher pricing.  

Munshi adds, "The numbers of stores visited by consumers have not increased in the metros. Marketers should ensure that they manage to retain their customers by making available good quality products, innovative promotions and world class service within a store."  

The ShoppersTrends report provides insights into changing grocery shopper behaviour and the factors driving shopper satisfaction and loyalty in 15 countries across the Asia Pacific region and more than 40 globally. The real action across the region is coming from the growth in modern self-service grocery stores. In 2005, a net increase of over 12,000 stores and an increase by six percentage points, as compared to 2004, were experienced. The growth was driven by a 19 percentage point increase in hypermarkets and 15 percentage point growth in convenience stores. The increasing availability of such stores is continuing to have a significant impact in changing the behaviour of shoppers in this region.

Meanwhile, a developed convenience store sector is emerging fast. In both Taiwan and Thailand, over 85 per cent of urban shoppers use convenience stores as often as three or four times a week, more times than in Japan.

Traditional trade, counter service grocery stores and wet markets are still dominant in Indonesia, India and the Philippines. Shoppers in these markets visit the traditional format daily or once every other day and supermarkets less frequently.

While about 50 per cent of urban shoppers use supermarkets on a regular basis, hypermarket penetration is low and convenience stores are hardly used. Convenience stores aren't developed, but there is an interesting trend in the Indonesian market where mini-markets have been growing rapidly with the number of stores growing by 15 percentage points in 2005 to over 6,500, and the share of trade increasing nationally by 10 percentage points.  The appeal of mini-markets to shoppers is low-priced convenience.

© 2006 agencyfaqs!

First Published : October 20, 2006
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© 2006 agencyfaqs!