Bangalore’s booming retail market

Published: 13th October 2012 11:06 AM  |   Last Updated: 13th October 2012 11:06 AM   |  A+A-


With the country witnessing a spiralling retail and consumer boom, the retail industry in Bangalore too has seen manifold growth when compared to its population density in the past decade.

But the supermarket and mall culture has caught up pace only as late as 2008 and now it has grown to a sizeable number but no way comparable either to Gurgaon or Ludhiana.

 The city saw the advent of organised retail even in the 1970s when Nilgiris (food), Viveks (consumer durables) and others started their operations while corporates like the Tatas (Star Bazar), the Birlas (More), Ambani (Reliance Retail), RPG Enterprises (Food World), and mega retailers like the Crosswords, Shopper’s Stop, and Pantaloons raced to revolutionise the retailing sector and hoping to turn the retail sector as an industry in the city.

However, the scenario in the organised retail sector in India is dismal as the average sales in such big outlets is below 20,000 dollars compared to 2.5 million dollars in the US. Even today, 97 per cent of the retail sales in the country takes place through the Kirana stores which is in the unorganised sector. As per industry estimates, for every 100 household, there is more than one retail outlet in Bangalore which is not so in other cities of the country like Mumbai.  With more than 25,000 retail outlets in Bangalore, the livelihood of more than three to four lakh people is at stake.

On an average, a single outlet provides employment to three families or an estimated 10 people. Out of the existing retail outlets, 50 per cent of them are run by communities like the Setties, Marwaris, Kakas (Malabar Muslims ), Shahs and a host of other communities where ownership and management are predominantly family controlled and they are basically in the business of selling groceries.

Way back in 1971 itself, the establishment of Nilgiris super market paved way for the starting of the food retail chain in Bangalore. As there were no new players entering in the next two decades, there was not much growth of food retail chains in Bangalore. But with the entry of Food World in 1996, there was a rapid expansion of organised food retail chains in Bangalore with many new players like Fab Mall, Subiksha, Trinethra, Namdhari Fresh, etc. entering the market and opening up their outlets in the city. The rapid rise in the super market chains can also be attributed to many international and national players showing interest in Bangalore to start their retail outlets.

A retail industry expert say, “In the past one and a half decade, with the advent of big retail outlets like Reliance, More, Big Bazaar, Spar, etc., the traditional retail shops like the Revanna & Co, Puttasiddappa & Co, Janatha Bazar, Balkedarara Kendra, Bangalore Cooperatives, etc. were adversely affected and some even shut shop. In fact, the traditional shops slowly faded out in the city as branded items were available in the big retail outlets with lot of discounts and schemes. These outlets who were earlier selling profit making products like soaps, oils, cosmetics and detergents lost out to the Indian supermarkets.”

“If one recollects, 15 years back when these Indian retail outlets set up shop, the same Congress Government said nothing will happen and there will be no repercussions but today, when you look at the sector, all Janatha Bazaars, other cooperative outlets like Subhiksha have folded up. In Bangalore, only two Janatha Bazaars against 32 outlets in 1997 are existing while other cooperative stores are completely closed,” says another retailer.

A study conducted by the Rabo India Finance Pvt. Ltd. further says that south Indian states of Karnataka, Tamil Nadu and Andhra Pradesh have taken a lead role in establishing modern food outlets. The growth of organised retailing has shown particular vigour in Bangalore and Chennai where an estimated 40 per cent of the grocery requirements are met through modern retail formats. Today, Bangalore alone has more than 10 organised retailers with more than 100 outlets including Metro AG operating in the city. Due to increasing urbanisation and expanding service sectors like software, banking, insurance and business process outsourcing (BPO) in Bangalore, the city has transformed into a metropolis and has ultimately led to increase in the income of the consumers.

With a decadal growth rate of 38 per cent, Bangalore is the fastest-growing Indian metropolis and is considered the hub of retail revolution and has different retail chains operating for a long period of time.

Also many new retail chains have opened their outlets recently in the city and many retail chains have made Bangalore as their focal point of their managerial operations.


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