Rural retail 'ticket size'

It now makes financial sense for retailers to go rural. That's because the single-largest bill till date of Rs 1.5 lakh comes from a Big Bazaar store in little-known town of Sangli in Maharashtra, and not from rich metros like Delhi or Mumbai.

'Bharat', or Eural India is fast emerging as a retail goldmine, with small towns like Sangli, Alwar, Ambala, Raipur, Ludhiana, Jalandhar, Indore, Panipat, Haldia, Durgapur, Salem and Meerut expected to contribute 30-35% of retail revenues. Little wonder then that all retail biggies are setting up shop in small towns, and even doubling the numbers. Most of the retail chains offer fresh food and vegetables, staples and grocery and fast moving consumer goods in stores which typically range from as small as 1,000 to as large as 25,000 square feet.

A few other retailers offer right from fresh fruits and vegetables, staples and groceries, FMCG, personal care, electronics, toys, books, music, pharmacy, delicatessen, while Future group's Big Bazaar outlet have general merchandise such as watches, plastics, toys, mobiles, apparel, appliances and even gold, besides food and staples.

The financial sense is driven by that in spite of sales being much lower in these towns, Retailers are able to break even in four-five months of being set up, as against eight-nine months earlier. This is because of the advantages they enjoy of low rentals, lower operational costs with air-cooled smaller-sized store and good logistics of being close to the supply chain.

Story ref : TOI

Pic : radio.weblogs.com