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RETAIL SECTOR

AKHILESH

SUNIL TIWARI

SUNIL PAL

CHANDAN

NITIN

RAHUL

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PESTANALYSIS

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POLITICAL

Strong opposition to FDI in Indias retail sector.

Taxation policy VAT.

Low access to banking facilities.

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ECONOMIC

GDP Growth.

Foreign Investments.

Money Supply.

Inflation.

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SOCIAL

Corporate Social Responsibility.

Environmental Safety.

Ease of shopping.

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TECHNOLOGY

Online Shopping.

Retail media networks(RMN).

ERP System.

CRM System.

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SUPPORTIVE SECTORS

IT.

Media.

Real Estate.

Tourism.

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IMPACT OF UNION BUDGET 2011 ON

RETAIL SECTOR: 1)BUDGET

EXPECTATION

Opening up of retail sector by allowing FDI in

multi brand retail will help the Indian retailers

in procuring funds for expansion and improving

their supply chain infrastructure. The industry

players support FDI in retail but suggest a

gradual step by step approach to gauge the

impact and take corrective measures if required.

There is vast disparity in penetration levels of

organized retail in rural and urban India(Metros: 20%-25%; Pan India- only 5%). The

government could consider introducing some tax

holidays/ fiscal incentives for retailers willing to

expand into rural areas similar to those available

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to manufacturers and exporters operating in such

areas.

Retail industry leads to multiple job creations

and contributes to the country's economicprogress. Recognizing retail as a separate

industry will help the retailers in getting their

issues addressed specifically and also bring

clarity on the duties charged.

2)BUDGET MEASURES:

a) No announcement on the much awaited FDI in

multi brand retail in this years budget

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b) Income tax exemption limit increased to Rs 2,50,000

(up by Rs 10,000) for senior citizens and Rs 1,80,000

(up by Rs 20,000) for others. Tax rates for women

remain unchanged at Rs 1,90,000.

c) The optional levy of excise duty on garment

manufacturers made mandatory at a unified rate of

10% for branded garments.

d) Tax exemption withdrawn on branded gold/ silver

jewellery and articles by charging nominal 1% excise

duty.

e) Surcharge on domestic companies reduced to 5%

from 7.5%.

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BUDGET IMPACT:

Marginally higher income tax exemption limit is

a positive for the sector but the extension in

exemption limits for senior citizens will not affect

the retailers in a substantial manner.

Branded garments might get costlier in future if

the manufacturers decide to pass on the cost to

retailers and ultimately to the end consumers.

Along with the high prices of precious metals like

gold and silver, the 1% excise duty will hurt

branded jewellery retailers.

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COMPANY IMPACT

Retailers like Pantaloon Retail, Shoppers'

Stop and Trent may face margin pressures if the

rising costs of garment manufacturers are passed

on to them.

Titan Industries will be adversely affected as a

result of excise duty charged on jewellery. The

nominal rate of 1% is just a step to include these

products in the tax net and the government may

keep raising the tax rates in the future.

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STRATEGY The hypermarket would be selling the products

on EDLP (every day low price) basis at prices 15-

20 percent lower than market prices.

Buying products from the first level suppliers.

Shift of advertising from product awareness to

product preference .

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FUTURE PERCEPTIVE

FDI approval.

Increasing at a rate of 10% yearly.

Food is the most dominating sector and is

growing at a rate of 9% annually.

Providing employment to 8 per cent of thenations workforce.

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PROJECTED RETAIL GROWTH

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CONCLUSION

o Indias GDP growth of 10% in 2007-08, reflecting the

booming economy of the country.

o The sector is on a high growth trajectory and is

expected to grow by more than 27%over the next 5 to6 years.

o Retail sales in India are hovering around 3.3-3.5% of

GDP as compared to around 20% in the US.

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THANKYOU