The coming year will see an addition of a million square feet to the organised retailing space across the country, according to a study by Fitch Ratings.
"According to our estimates, close to 25 million square feet of retail space is being developed and will be available for occupancy over the next 3 to 4 years," said R Jayakumar, director, Fitch. An investment of Rs 340 crore (Rs 3.40 billion) is expected to be made for this expansion.
Major retail chains such as the K Raheja controlled Shopper's Stop and the Tatas-promoted Westside are planning to add close to 300,000 square feet and 100,000 square feet of retail space, respectively, this year.
Pantaloon is also looking at expanding its retail operations by 150,000 square feet.
The total turnover of the retailing industry is Rs 9,00,000 crore (Rs 9,000 billion), of which the organised segment accounts for a meagre 2 per cent, or about Rs 17,500 crore (Rs 175 billion). The study predicts a ten-fold growth in this segment by the year 2010.
The increase in the retailing business space will be prominent in the metros in the initial stages and is expected to trickle down to smaller towns.
Jayakumar said: "We expect the organised retail industry in India to continue to grow rapidly - especially through increased levels of penetration in larger towns and metros and in smaller cities and B-class towns. Fuelling this growth is the development of retail-specific properties and malls."
Besides an overall increase in the purchasing power of the Indian consumer, the setting up of international quality standards modified to suit the Indian consumer behaviour has ushered this rise.
The entry of several new domestic and international players and the improvement in retail processes are the other factors which have contributed to the growing number of retail markets.
"Shopper's Stop and Westside had faced teething problems, reporting losses two years back, but improvisation in operational efficiencies has resulted in a turnround in 2002," Jayakumar said.
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