Paradigm shift in indian organised retail-2012

Indian retail has gone through one full cycle of change in the last 2–3 years and seen both sides of the game-the extreme exuberance of 2007–08 and the fearful cautiousness of late 2008/early 2009. In 2009, the market was flooded with not-so pleasant news from the sector: downsizing, liquidity issues and even bankruptcy, incomplete projects, inability to meet the expansion plans, etc. The retail business mirrored consumer sentiments and the overall economic scenario, which appeared to be as gloomy, with no end in sight. As news of large companies laying-off people and cutting salaries was further fuelled by an over-enthused media, consumers shrank their spending to the bare minimum, purchasing only the essentials for immediate requirement. People saw their savings/investments in various asset classes significantly eroded and their trust in the banking sector dwindled as some of the largest global banks were seen biting the dust. The larger cities which contributed to maximum retail sales were the worst hit. Retail and other industry sectors continued to hope that the market would revive, and banked on one trigger after another (the new year, the budget, etc.) till the Diwali festival of 2010, which saw extremely good sales for a large number of retailers and sustained itself even after the festive season. Though signs of a revival started in May/June of 2009 as the stock market started to recover, consumer spending only began picking up in August–September, peaking during the festive season. The upswing was broad-based and sustained, and by the end of 2010, gave enough confidence to retailers to start re-looking at their expansion plans. The liquidity crunch of the earlier part of the year also eased up and the future seemed much brighter. Despite the economic slowdown, the Indian market is and will remain one of the most promising in the world for many years to come. This will continue to excite domestic as well as international companies/retailers about entering and exploring the Indian market. Thus, while the year 2009 may be a blip in the Indian retail sector, like 2011–01 was for dotcom, retail will continue to grow at a scorching pace and will in the years to come emerge as the face of new India. This article summarises the happenings in the retail sector in 2010–11 and projects trends across eight key functions for 2012 and the coming years.