The booming Indian retail sector, is expected to reach a size of $1,011 billion by 2017, with supermarkets and hypermarkets cornering as much as 66 per cent of the total investments, says a study by marketing consultancy firm Technopak.
According to the study, in the next three to five years, there could be increased rate of shakeout with only four categories of ‘survivors’ emerging in the next 3-5 years. Predicting a clear tilt in favour of large formats on the investment front, the study said majority of investment in the next 6-7 years is slated for hypermarket and supermarkets with 32 per cent share and 34 per cent respectively.
While warehouse, cash and carry will have 9 per cent share, departmental stores — 2 per cent and other formats which include apparel, footwear, watches, furniture, furnishing, toys will have 23 per cent share in the total market, it added.
Margin erosion
According to estimates, maximum action in the Indian retail space is going to be in top 50-60 urban markets.
“In these markets there shall be rapid margin erosion for those competing in mainstream formats like supermarkets and hypermarkets, which may lead to pressure on the supplying brands as well,” the study said. Predicting a rapid transformation in the next five years, it said the share of organised sector in total retail will go up from the present 4 per cent to 16 per cent in 2012 and to 28 per cent by 2017. Forecasting consolidation, the study said in next five years top seven players will have 31 per cent of the market share in top 150 cities, while share of next 43 players will be just about 8 per cent.  Inevitably, the industry will witness a shakeout with only four categories of ‘survivors’ emerging in 3-5 years.