Retail insight as on 25th October 2010

From the Editor's Desk

Guest Editor: Suresh Dalai, Head of Merchandise Planning, Ermenegildo Zegna, Greater China 

Merchandise Planning - Stick to the key principles

- I have been conducting merchandise planning for a luxury brand in China for almost three years now. Before China, I implemented merchandise planning best practices in the U.S. for department stores, hypermarkets, and casual apparel brands. Of course, merchandise planning in a developing market such as China is different from a well-developed retail market such as the U.S. and merchandising for a luxury brand is different from merchandising for a department store or hypermarket. However, I have overall found that the more things are different, the more they need to be the same - What delivers results is the discipline with which the key principles of merchandise planning are implemented, no matter where or in which sector you are. These principles include the following:

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At a Glance  Govt divided on retail FDI as FinMin says no Seiko on retail expansion drive in India Raghu Pillai: Retail is a very local business Essar Hypermart may be hived off from parent co Maruti plans to add 1500 service outlets by 2015 Tata DoCoMo to open 4000 3G retail outlets Big Mac's new menu Venky's hatches plans to make it big in 25 nations Cafe Oz & Bar eyeing pan-India expansion Will foreign retail doors open in India? From Paris to Melbourne and New York to Shanghai, all Louis Vuitton stores will celebrate Diwali Rental designer-wear What's in store?: The forecast for global retail   News: Apparel, Specialty, CDIT ...  Govt divided on retail FDI as FinMin says no Business Standard The government is divided over allowing foreign direct investment (FDI) in multi-brand and foodgrain retailing. While the Ministry of Finance is opposed to any change in the existing retail FDI policy, the Agriculture and Consumer Affairs Ministries, along with the Planning Commission, are open to the proposal mooted by the Ministry of Commerce and Industry. At present, FDI in these areas of retailing is banned. The finance ministry's position gains significance in the run-up to Walmart CEO Mike Duke's visit to India next week. He is expected to pitch for the opening of this sector to foreign investment. Seiko on retail expansion drive in India Business Standard Japanese watch maker Seiko has said that it is on a retail expansion drive in India, with plans to open more exclusive outlets and increase presence in multi-brand stores in the next one year. The company plans to add nine such stores across the country in the next 2-3 years, and increase its point of sale to 215 outlets by next year. "We plan to have around 10 boutiques in the top major cities in India, including Mumbai, Delhi and Bangalore in the next two-three years," Seiko Watch India Vice President (Sales and Marketing), Niladri Mazumder said. Raghu Pillai: Retail is a very local business Forbes India Raghu Pillai, who has quit Reliance Retail to join Future group, says that he still supports the high speed rollout model for retail and that firms that controlled costs during the downturn will reap dividends now. Pillai reiterates that Retail is a very local business, and at the end of the day, the end game is a function of the vision that the board or promoter brings to the table and the resources which you have. Essar Hypermart may be hived off from parent co Sify Essar Hypermart, the retail arm of Essar Steel may be hived off from the parent company, once the GST comes in place. The retail arm of the company has 100 Hypermart and 419 Expressmarts across India. It touched a turnover of Rs 3600 crore in the last fiscal year. Essar Hypermart, CEO, Girish Rao said, "We may think of hiving off from the parent company, once the GST is in place, as the tax structure would be rationalised." Maruti plans to add 1500 service outlets by 2015 Times of India The country's largest car maker, Maruti Suzuki India is planning to ramp up its service centres by a massive 1,500 outlets by 2015, in line with its expansion of production capacity to over 17 lakh units annually. This enhancement is expected to result in additional employment of about 22,000 people by the service network operators. "We expect service load at our network multiply manifold, as Maruti Suzuki scales up capacity to 1.7 million units in coming years," Maruti Suzuki India Executive Officer (Service), Pankaj Narula said. Tata DoCoMo to open 4000 3G retail outlets Cellular-News Indian mobile network, Tata DoCoMo plans to set up 4,000 dedicated retail outlets to sell its forthcoming 3G services. The company is expected to launch its 3G network at the end of this week. "There will be a sound distribution network. We will set up 4,000 exclusive stores for 3G in the next three-six months," Tata Teleservices Executive Vice President, Mobility, Deepak Gulati, said.   News: Food & Grocery, QSR ...  Big Mac's new menu Sify McDonald's has ambitious plans to become a breakfast destination as well. After wooing customers with happy meals and extra-value meals, Big Mac has added breakfast to its menu, which it believes will keep the chain "ahead of competition". After trial runs in a few Mumbai and Delhi restaurants, McDonald's has taken over two years to formally launch the breakfast category, which both the chain and analysts call a challenging segment to be in, given the Indian habit of having breakfast at home. Venky's hatches plans to make it big in 25 nations Economic Times India Inc's global drive has been a series of high-profile acquisitions. However, poultry major Venky's, the brand of the nearly $1-billion Venkateshwara Hatcheries group, has chosen a silent route for its global foray. Its expansion, targeting 25 countries, is through offering feed, health and hygiene services at the doorstep of farmers in South-East Asia, the Middle East and even Latin America. VH group Vice Chairman and Joint Managing Director, B Venkatesh Rao said the global plan is being routed through Uttara Impex, which has combined the overseas activities of several group companies. Cafe Oz & Bar eyeing pan-India expansion Franchiseindia.com Cafe Oz & Bar, an Australia based chain of fusion style food and beverages, plans to open 20 outlets pan-India in the next one year. The company is all set to open franchised outlets across the nation except for Delhi, where the company will open company owned outlets. Recently, the company launched its second outlet in Greater Kailash-I, New Delhi, thereby taking the count of outlets to three in India.   Retail Trends  Will foreign retail doors open in India? Business Review India Thanks to India's flourishing economy and increasing incomes, foreign retailers are now looking at India as a prospective retail sector. The sector is expected to rise at a great rate in the coming years, rising at $427 billion by end of 2010 and $635 billion by 2015. Indian retailers are considering various possibilities to interact with foreign investors for further development. In fact, global retailers like Walmart and Carrefour and lobbies such as the U.S.-India Business Council, Confederation of Indian Industry and the Federation of Indian Chambers of Commerce and Industry are of the opinion that foreign investment of up to 51 percent should be permitted in multi-brand retailing. From Paris to Melbourne and New York to Shanghai, all Louis Vuitton stores will celebrate Diwali Indian Express That the French luxe luggage and fashion house Louis Vuitton has an enduring love affair with India since the 1920s, when our royalty commissioned grand travel trunks from them, is well known. But now, Louis Vuitton pays its biggest tribute to India ever. From October 29, every Louis Vuitton store in the world (and there are 454 of them) will light up their windows to celebrate Diwali. Merchandising and packaging will be inspired by Diwali themes. Rental designer-wear Sify Walking through the shops in Forum Courtyard, the well-known shopping destination in south Kolkata, it's hard to miss Trezo. This newest addition to the array of retail outlets selling international apparel and cosmetic brands brings in the unique racks on rental concept. This initiative of the Forum Group offers designers four-foot racks on rent to showcase their collections. "We've tried to provide upcoming designers with a retail infrastructure and give them a platform to mark their presence and display their creations at a minimum investment," says Kamna Saraf, who is supervising the project. The racks are rented out at Rs 25,000 per month or 35 per cent of the sale, whichever is higher.   Retail Insight  What's in store?: The forecast for global retail Korn/Ferry Institute  Korn/Ferry International interviewed 66 retail CEOs and board members from around the world to investigate the critical question: how are leadership talent issues impacting on the delivery of the organisation's strategic business objectives? The results suggest that those heading many retail companies are overly optimistic about their ability to attract, develop and retain executive talent. The economic downturn presented a comparatively easy period for recruiting and keeping senior executives. A shift is underway, however. There is now a mismatch between retailers' belief that they can continue to meet their leadership talent needs with ease, and market forces combining to make this much more challenging to achieve.