CII Communique - February, 2010

etail
sectoral synergies
The National Retail
Summit, with the
theme, ‘Modern
R e t a i l : To w a r d s
CII National Retail Summit
Sustainable Growth
and Profitability’ was
based on retailers clearly
identifying their path to
profitability by creating
learning organizations
and adopting sustainable
business models.The Summit was held on 12 January
in Mumbai.
B S Nagesh, Vice-Chairman, Shopper’s Stop, Subodh Kant Sahai, Union Minister
for Food Processing Industries; Thomas Varghese, Chairman, CII National
Committee on Retail, and CEO, Aditya Birla Retail Ltd.; Sunil D Tatkare, Minister
for Finance & Planning, Maharashtra, and Puneet Avasthi, Vice President, IMRB
The Union Government is coming out with a series of
initiatives to increase the share of modern retail in the
country, said Mr Subodh Kant Sahai, Union Minister for
Food Processing Industries, who was the Chief Guest.
He said the Government plans to upgrade 70 cities in
India to metros with all modern facilities by 2012.
"With the amendment of the Agriculture Produce
Market (APMC) Act, farmers would become the largest
beneficiaries. With 70 percent of our population
dependent on agriculture, this would also get in third
party investors interested in Retail to support the
farmers," he said.
Mr Sahai felt that the growth of the food processing
industry is directly linked to the growth in retail industry.
"Fourteen percent of the growth that comes for the food
processing industry is directly linked to retail. There
was a time where tomato and potato growers would
leave their produce wasting in the markets because it
was more costly to take it back. But with progress in
the food processing industry, things are changing. The
political mindset also has to undergo a transformation
in viewing the Retail business as directly benefitting the
farmers and providing opportunities for Agri-business,”
he stated.
Mr Sunil Dattatraya Tatkare, Minister for Finance and
Planning, Maharashtra, pointed out that the Indian
economy had survived the economic meltdown thanks
to the resilience in consumption patterns. "In the past 4
years, there has been a 75 percent increase in consumer
spending." he said. Expressing concern over rising
food prices, he urged manufacturers and retailers to
get together to pass on the benefits of bulk purchases
to the consumers.
Mr Tatkare assured the
industry representatives
of the state’s keenness
to make Maharashtra
a m o d e l s t a t e f o r
pioneering the Indian
Retail movement.
Mr Sahai and Mr Tatkare
also released the ‘CII-
IMRB India Consumer
Confidence Report 2009’
on the occasion.
The report, explained Mr Puneet Avasthi, Vice President,
Retail, IMRB, examines the impact of the economic slowdown
and consumer outlook in terms of shift in consumption in
value and volumes. It indicates that consumers hold on
to spends in basic necessities - groceries and apparel,
while cutting down on investments and expenditure in the
entertainment and lifestyle categories.
The report finds that "the consumer is willing to trade
off quality as prices increase for milk products, edible
oil, staples, spices, pulses and processed foods. It
indicates huge potential in products like tea and coffee,
and fruits and vegetables as consumers are looking for
better quality here, even as the prices increase. For
personal care products, consumer continues to seek
quality but manage their budget through portion control
and management of volumes," Mr Avasthi said.
Profitability in the retail industry is not possible without
sustainability, said Mr B S Nagesh, Vice Chairman, Shoppers
Stop Ltd. "The margins are wafer thin and the costs are
escalating”, We also need to understand why, when
manufacturing can happen for 24 hours and 365 days a year,
we can’t we have a similar pattern for retail”. he said.
Mr Thomas Varghese, Chairman, CII National Committee
on Retail, and Chief Executive Officer, Aditya Birla Retail
Ltd explained that Indian Retail has the potential to
reach net worth of $535 billion by year 2013 from the
current $410 billion. Modern retail, employs 700,000
people today, making it the third largest employer
after agriculture and textiles, with the potential to
employ around 6.8 million people by 2018," he said.
Mr Varghese pointed out that, other than creating
jobs, Retail is also one of the largest tax payers to
the government. "The sector today has reduced the
proliferation of adulterated goods in the economy and
ensured a supply of quality products," he added.
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