In fact, some believe that eventually, in any given locality or suburb, only two-to-three players will be able to sustain footfalls. With most stores following a synchronised format across outlets, there is little segregation based on consumer profile.
And this is where Dabur, which recently announced its foray into retail with its health and beauty stores - New U - plans to step in. However, whether or not a large format wellness store will be able to sustain is anyone's guess.
There aren't many concept stores in the country yet. At the same time, New U, a 100 per cent subsidary of Dabur, will be competing with the likes of Shopper's Stop, Lifestyle and biggies Reliance and Future Group.
The stores will house everything from cosmetics and beauty products to healthcare and wellness products from a wide range of companies like P&G, Dabur, Hindustan Unilever and Johnson & Johnson. At the same time, they will also offer prestige products like Lancome, Clinique and MAC.
"Our idea is to offer the consumer a host of beauty and wellness products under one roof. At the same time, our stores will have a number of advisors who will assist the consumer in making a choice," explains Peter Baker, CEO, New U.
He hopes to avoid brand bias by employing advisors for the stores who will be trained individually by each company but will eventually be on the New U payrolls.
In an attempt to utilise store space to the maximum and achieve greater sales and not simply footfalls, New U will customise its stock according to the location of the store.
"We won't have prestige brands selling out of all our stores. For instance, stores where we are likely to have more middle-income footfalls, we will focus on mass market brands, with a brand like L'Oreal being the high-end one. So, our flexible product offering will be our USP," says Baker.
Aware of the cut-throat in-store competition among various brands, Baker and his team have also started working on a parallel project - brand New U. The range will consist of numerous FMCG items like shampoos, creams, sanitary napkins, baby products, etc.
Though he plans to combine the Indian science of Ayurveda and western scientific knowledge for the development of these products, Baker will get the formulae developed at labs in the UK, Italy and Thailand. "The difference of price in the New U products compared to leading brands will be between 15 and 25 per cent, with New U of course being cheaper," he reveals.
With planned investments of $22 billion over the next five years, the retail sector is expected to grow 40 per cent to $427 billion by 2011.
Organised retail, which is almost 4 per cent of the whole is in turn pegged to hit $64 billion by 2015. Statistics put Dabur on the frontfoot. Aiming for a 2009-10 break-even and targetting six stores in the NCR region by March 2008, Baker is hopeful of the success of the New U concept.
Dabur's initial investment in New U is to the tune of Rs 140 crore (Rs 1.4 billion), a figure that will rise when New U will begin its pan-India rollout. "By 2010 we plan to open a total of 160 stores at a rate of two stores a week," says Baker.