I An Overview of Indian Retail Sector
The retail sector has helped in giving strong impetus to overall economic growth as a significant
driver of the growth of services sector, which contributes as mush as 54 per cent of GDP. It has
strong backward and forward linkages with other sectors like agriculture and industry through
stimulating demand for goods and through mass marketing, packaging, storage and transport.
Moreover, it creates considerable direct and indirect employment in the economy. Also, the
consumers have benefited in terms of wide range of products available in a market.
Size of the Modern Retail Sector
The emergence of new formats and the evolution of modern retail in India has attracted attention
in recent years. [The data sets published by different authorities are not strictly comparable as
they are based on surveys, but they give some idea of the trends and prospects.] The retail
sector, currently, is said to contribute 10 per cent of India’s GDP (Confederation of Indian
Industry), and is expected to grow at a robust rate of 36 per cent per annum by the end of 2008
(Associated Chambers of Commerce and Industry of India, ASSOCHAM). This growth would
expand the size of the market to over Rs 14,79,000 crore from its current level of Rs 5,88,000
crore. The Indian retail market is estimated at Rs 9,300 billion and is expected to grow at a
compounded rate of 30 per cent over the next five years (Retailers Association of India).
Moreover, the retail sector employs over 7 per cent (21 million) of the national workforce
(Aggarwal, 2000), the second only to agriculture. The retail density more than doubled between
1978 and 1996 and the number of outlets per 1000 people at an all India level, increased from 3.7
in 1978 to 5.6 in 1996. For the urban sector alone, the shop density increased from 4 per 1000
people in 1978 to 7.6 per 1000 people in 1996 (Venugopal, 2001). Because of their small size,
Indian retailers have very little bargaining power with manufacturers, unlike in the case of retailers
in developed countries, (Sarma , 2000).
Structure of Indian Retail Sector
The retail sector is classified broadly into two:
Organised Retail Sector and,
Unorganised Retail Sector