PROJECT ON OPERATION MANAGEMENT IN RETAIL SECTOR PROJECT SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE POST GRADUATE DIPLOMA IN MANAGEMENT SUBMITTED TO SUBMITTED BY Mrs. SHALINI SRIVASTAV AJAY KUMAR FACULTY GUIDE PGDM/08-10/03 1 Reliance Super ACKNOWLEDGEMENT I take this opportunity to express my deep sense of gratitude to all those who have contributed significantly by sharing their knowledge and experience in the completion of this project work. I am greatly obliged to my Parents for providing me the right kind of opportunity and facilities to complete this venture. My first word of gratitude is due to Mr. Akshay Gaur, Operation Manager, Relaince super, Greater Noida, my corporate guide, for his kind help and support and for his valuable guidance throughout the project. I am thankful to him for providing me with necessary insights and helping me out at every single step. My heartfelt thanks to my respected Faculty Guide namely Mrs. Shalini Srivastav, Without her continuous help the project would not have been materialized in the present form. Her valuable suggestions helped me at every step. Finally, I would also like to thank all my dear friends for their kind cooperation, advice and encouragement during the long and arduous task of preparing this report and carrying out the project. At last but not the least, who are always at the top of my heart, my dear family members whose blessings, inspiration and encouragement have resulted in the successful completion of this project. Ajay Kumar 2 Reliance Super DECLARATION I hereby declare that the project report titled “OPERATION MANAGEMENT IN RETAIL SECTOR” at RELIANCE SUPER, GREATER NOIDA (UP) is my own work and has been carried out under the guidance of Mr. Akshay Gaur, Operation Manager, Reliance super, Greater Noida, and Mrs. Shalini Srivastav, Faculty Guide, IILM-CMS, GREATER NOIDA. All care has been taken to keep this report error free and I sincerely regret for any unintended discrepancies that might have crept into this report. I shall be highly obliged if errors (if any) be brought to my attention. Thank You. AJAY KUMAR 3 Reliance Super INDEX Topic Page No. Introduction 05 Types of retail sector 07 Retailing format in India 07 Retail sector growth in India 08 Contribution of Indian retain industry 10 FDI in Indian retail industry 13 Government intervention in retail 15 IT trends in retail sector in India 16 Opportunities of western retailers in India 18 E- Retailing in India 21 Top companies in retail 22 Retail: Worldwide scenario 29 Reliance Industries ltd. 31 Reliance super 32 SWOT analysis 33 Retail triangle 35 Learning from summer internship 38 SAP commands 41 Research work 43 Major findings 45 Conclusion 46 4 Reliance Super INTRODUCTION WHAT IS RETAIL? The word retail is, in fact, derived from the French word retailer, which means “to cut off a piece or to break bulk.”A retailer may be defined as a dealer or trader who repeatedly sells goods in small quantities. The sale of goods or commodities in small quantities directly to consumers of, or engaged in the sale of goods or commodities at retail. It also means to sell in small quantities directly to consumers. RETAIL - • The sale of goods individually in small quantities to the public or to sell. • Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store or kiosk, or by post, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. • The sale of goods directly to the consumer; to sell at retail, or in small quantities directly to customers; to repeat or circulate (news or rumors) to others; Of, or relating to the sale of good directly to the customer; In retail quantities, or at retail prices • To sell directly to the consumer, usually in small quantities in comparison with the total level of sale. • Any product for sale in a store or directly to a consumer. •Trade in which a client buys or sells an over-the-counter stock through a broker dealer. • Merchants selling tangible goods in a face-to-face environment who normally use conventional terminals and swipe transactions. TYPES OF RETAIL SECTOR Retailing is one of the pillars of the economy in India and accounts for 35% of GDP. The retail industry is divided into organized and unorganized sectors. Over 12 million outlets operate in the country and only 4% of them being larger than 500 sq ft (46 m2) in size. • Organized Retail • Unorganized Retail 5 Reliance Super ORGANIZED RETAIL Organized retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate backed hypermarkets and retail chains, and also the privately owned large retail businesses. Organized retail segment has been growing at a blistering pace, exceeding all previous estimates. According to a study by Deloitte Haskins and Sells, organized retail has increased its share from 5 per cent of total retail sales in 2006 to 8 per cent in 2007. The fastest growing segments have been the wholesale cash and carry stores (150 per cent) followed by supermarkets (100 per cent) and hypermarkets (75-80 per cent). Further, it estimates the organized segment to account for 25 per cent of the total sales by 2011. UNORGANIZED RETAIL Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc. Unorganized retailing” is defined as an outlet run locally by the owner or caretaker of a shop that lacks technical and accounting standardization. The supply chain and sourcing are also done locally to meet local needs. Its organized counterpart may not obtain its supplies from local sources. Difference between organized and unorganized retailing The major differences between organized and unorganized retailing lies in its number (chain) of store operations. An unorganized outlet may be just stand alone or can have maximum of 2-3 outlets in a city, where as the organized outlets are "any retail chain (more than two outlets)which is professionally managed (even if its family run), has a accounting transparency (with proper usage of MIS and accounting standards) and organized SCM with centralized quality control and sourcing (certain parts can be locally made) can be termed as an "organized retailing" in India. Retailing in India is predominantly unorganized. According to a survey by AT Kearney, an overwhelming proportion of the Rs. 400,000 crore retail market is UNORGANISED. In fact, only a Rs. 20,000 crore segment of the market is organized. We are known as a nation of shopkeepers with over 12 million, the highest outlet density in the world in the world with an estimated turnover of $ 200 billion. However a disturbing point here is that as much as 96 per cent of them are smaller than 500 square feet in area. This means that India per capita retailing space is about 2 square feet (compared to 16 square feet in the United States). India's per capita retailing space is thus the lowest in the world. Another point to note is that only 8 % of our population is engaged in Retail whereas the global average is around 10-12%. 6 Reliance Super INSTORE RETAILERS This type of retail format is also known as the brick and mortar format. These retail stores are in the form of fixed point sale outlets. They are specially designed to lure the customers. There are different types of stores through which the instore retailers operate. Branded Stores appear in the form of exquisite showrooms. Here the total range of a particular brand is available and the quality of the product is certified by the government. There are also multi brand specialty stores that sell a series of brands so that the consumer can choose from the wide array of brands. Department stores have a large number of brands and products catering to all basic needs to luxurious items as well. Supermarkets are basically self service retail stores. Discount Stores offer commodities at reduced prices. In Hyper Marts customers have wide variety of products to choose from and they are also available at discounted rates. Convenient stores are located in prominent places within the reach of majority of the customers and do not operate in stringent work hours. Shopping Malls are a storehouse of a large variety of retail shops situated close to each other. RETAILING FORMATS IN INDIA • MALLS: The largest form of organized retailing today. Located mainly in metro cities,in proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment; all under a common roof. Examples include Shoppers Stop, Piramyd, and Pantaloon. • SPECIALTY STORES: Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sector. • DISCOUNT STORES: As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non perishable goods. • DEPARTMENT STORES: Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Further it is classified into localized departments such as clothing, toys, home, groceries, etc.