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1. Chapter 1 INTRODUCTION TO RETAIL Retailing has become an important institution in our modern society.
It provides considerable value to the consumers. It also offers opportunities for rewarding and challenging
career to people. There has been a significant shift in consumer‟s need and technology and it has resulted in
change in retail industry. 25 to 30 years ago modern retail formats and companies were unknown which has
become now the primary factor in retail industry. The key to successful retailing is offering the right goods
and services at the right price, in the right place and at the right time to insure profits. Retailing is one of the
fastest growingsegments of the economy. As one of the nation‟s largest employers, the retail industry
provides excellent business opportunities.About 12 percent of the approximately750,000 new enterprises
launched between2001 and 2002 (the latest years forwhich data is available) were retail operations.The
entrepreneurs behind these venturesrisk their capital, invest their time andmake a living by offering
consumers somethingthey need or want. You‟ll meet severalof them in this guide and learn howthey created
a niche for themselves. India is a nation of shopkeepers. With over 12 million retail outlets, India probably
has the highest density of retail outlets in the world, with one for approximately every 90 persons; little
wonder that the country is the ninth-largest retail market in the world, with estimated annual retail sales of
around USD215 billion in 2005 (Rs 960,000 crore). At the sometime, the share of organized trade in this
enormous market is currently very small. It is estimated at just USD8 billion (Rs 35,000 crore) in 2005, up
fromUSD6.25 billion (Rs 28,000 crore) in 2004. This accounts for less than 4 percent of the total retail trade in
the countryman UNDERDEVELOPED RETAIL MARKET. Organised trade in India is very underdeveloped when
compared with other emerging markets in Asia, Latin America and Eastern Europe. The Indian and Chinese
markets are comparable in many aspects: Both countries are not
2. homogeneous. They comprise many markets within a single country, with significantly varying cultures and
customer preferences across regions. 1.1 Meaning of Retailing The word retailing has its origins in the French
verb „retailer‟ ,which means “to cut up”, and refers to one of the fundamentalretailing activities which is to
buy in larger quantities and sell insmaller quantities. For example, a convenience store would buytins of
beans in units of two dozen boxes, but sell in single-tinunits. However, a retailer is not the only type of
business entityto 'break bulk'. Wholesalers also buy in larger quantities and sellto their customers in smaller
quantities. It is the type ofcustomer, rather than the activity, that distinguishes a retailerfrom other
distributive traders; the distinction being that aretailer sells to final consumers, unlike a wholesaler who sells
toa retailer or other business organizations. A generally accepteddefinition of a retailer is 'any establishment
engaged in sellingmerchandise for personal or household consumption andrendering services incidental to
the sale of such goods'. Manufacturers make products and sell them to wholesalers, or some times to
retailers. Wholesalers resell products to the retailers and again retailers resell them to customers. Thus,
wholesalers satisfy retailers‟ need whereas retailers direct their efforts to satisfy needs of the ultimate
consumers. wholesalers Manufacturers Retailers Ultimate Consumers
3. 1.2 Functions of Retailers Retailers enhance the value of the products and services they sell to ultimate
consumers and facilitates the distribution of those products and services for the manufacturers. The
important functions of retailers are given bellow Provide assortment Breaking bulk Inventory holding and
Provide services 1.3 Economic Significance of Retailing Retailing has direct influence in our day to day lives.
Lifestyle retailing has now become one of the country‟s largest industries.Some of the top global retailers are
Wal- Mart, Metro, K- Mart, Sears etc. Through merger and acquisition activity, many of these large retailers
are diversifying their format offerings to customers. The majority of the largest global retailers are involved in
the lifestyle and food sectors. While globalization is increasing throughout the retail world, it has become
particularly pronounce for US retailers, Indian government has been allowed FDI in single as well as multi
brand retailing. 1.4Trends in Retail Industry Retail industry is changing very rapidly. Some of the most
