Investments worth Rs27,550 cr expected in retail sector: Assocham

Investments worth Rs27,550 cr expected in retail sector: Assocham
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First Published: Sun, Mar 23 2008. 03 18 PM IST
Updated: Sun, Mar 23 2008. 03 18 PM IST
New Delhi: With an investment rate of 36.3% driving the Indian growth story, corporate retailers across the country have announced investment plans amounting to Rs1,31,804 crore in the last six months, for expanding their network of stores by 2010 so as to cash in on the retail boom.
According to a study carried out by Assocham where investments during the period September 2007 to February 2008 were tracked, malls, hyper marts and food stories will be the main drivers of the retail boom in tier II and III cities.
Key Findings
* Organized retail growing at estimated 25%; set to penetrate tier II and tier III cities like Pune, Chandigarh and Hyderabad; investment worth Rs27,550 crore announced
* Real estate companies like Unitech and DLF draw up plans that cater to growing demand of shopping malls; capex of Rs65,000 planned to be invested in real estate development for retail space in next four to five years; food and grocery is next big retail segment with investment plan of Rs22,100 crore
* With big retail malls in the pipeline, real estate development for organized retail sector attracts maximum investment announcements, amounting to Rs65,000 crore
* Unitech with capex of Rs20,000 crore, DLF with outlay of Rs16,000 crore and 5,000 crore by Parsvnath Developers will strengthen construction of mega retail stores
* Hyper marts will soon dot the Indian retail space with investment announcements of Rs29,154 crore expected to set them up
* Companies like Reliance Retail have set aside Rs24,000 crore for setting up hyper marts by 2010-11 in National Capital Region; Spencer retail announced capex of Rs3000 crore for expanding its retail outlet and setting up hyper marts by 2010
* Increased competition among food & grocery retailers will provide better services to users; capex of Rs22,100 crore planned to set up chains of food and grocery stores in next three years
* Reliance Retail announced investment outlay of Rs12,700 crore for setting up grocery stores in next two-three years in Hyderabad and NCR; Aditya Birla group to invest Rs8,000 crore to set up chain of stores by 2010; companies like Wadhawan Food Retail, Subhiksha and Dabur have made investment announcements worth Rs1,500 crore, Rs300 crore, and Rs200 crore in tier II and III cities in last six months
* While textile and garment industry are facing tough competition due to rupee appreciation and high competition in international market, industry players are betting on a booming domestic market
* Past six months witnessed major expansion in textile and apparel segment by large retailers including Provogue, Trent and Arvind Mills drawing up an investment chart of Rs7,900 crore for setting up new stores in Pune, Hyderabad, Navi Mumbai
* Provogue with a capex of Rs6000 crore has made an announcement to set up 40 new stores in tier II and tier III cities by next fiscal. Other major fashion brands like Arvind Mills, Donear Industries and Trent are upbeat on robust consumer demand and plan to invest Rs400 crore, Rs300 crore and Rs250 crore respectively
* Job creation centres of the future will be cities like Hyderabad, Pune, Surat and Chandigarh among others
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First Published: Sun, Mar 23 2008. 03 18 PM IST