India Retail Forum 2009: The right format will get you through

By Savia Jane Pinto , afaqs!, Mumbai | In Marketing | September 18, 2009
At the tenth edition of the India Retail Forum (IRF), the RAI discussed the grey clouds and silver linings for the retail sector

At the Conclave, which was the last leg of the tenth edition of the India Retail Forum (IRF), the Retailers' Association of India (RAI) discussed issues that have bothered the retail segment during the tough economic phase and issues that may come up in future.

B S Nagesh, vice-chairman, Shoppers Stop, and chairman of the RAI, moderated the session, along with Vikram Bakshi, managing director, McDonald's (North and East India). The panel comprised: Vinod Sawhny, president and COO, Bharti Retail; Amit Burman, vice-chairman, Dabur Group; Mehul Choksi, president and CEO, Gitanjali Group; Rakesh Biyani, director, Pantaloon Retail; T S Ashwin, MD, Odyssey; Pramod Arora, group president, PVR Cinemas; Gordon Reid, chief operating officer, Star Bazaar and Kabir Lumba, executive director, Lifestyle.

& #BANNER1 & #Nagesh and Bakshi initially discussed the growth of the sector over the past year with the panellists. The answers were surprising. Choksi spoke of the gold category and said that 100 per cent growth had been marked in India. Arora, however, spoke of a 30-40 per cent growth during the turbulent economic scenario. He added that PVR expected to see the same kind of growth for the next three to four years.

All the panellists were of the opinion that it was the companies' retail formats that were responsible for good growth figures in such disproportionate economic scenarios.

Burman shared Dabur's experiences in the quick service and casual dining formats. He said, "We have six formats in the quick service food space and three in the casual dining space. In two years, we have grown quickly to have almost 40 outlets." He confessed that the casual dining formats are much easier to maintain as against the quick service formats.

Another pointer that came to the fore while Burman was making his point was that food courts are a huge driver of footfalls in malls. Therefore, developers and food players should collaborate in this matter.

Coming back to formats and what's important, Reid stressed on reading the consumers before sketching out a format for a given geographical region. He said, "We have concentrated on getting the model right by doing the necessary research of studying the customer in detail."

Nagesh next asked the panel whether the issue of funds posed a deterrent to growth.

"Realtors," said Choksi, "is the main problem." He was of the opinion that the realtors are looking at prices that existed yesterday, while the market is looking for new routes, and that could be a deterrent.

Biyani, however, felt that funding isn't as much a concern as the right and viable business model.