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Realtors drag Retailers Bottom Line

June 3, 2008


You are Reading this First Here in Global MediaThe Real Estate lobby across India with vested interest from Politicians and Bureaucrats is a serious threat to the growth of organized retail in India. Indian Council for Research on International Economic Relations (ICRIER) recently released its report on the Indian organized retail industry, which suggest that performance of the major organized retailers in terms of revenue per sq ft remains quite subdued, and, hence, lease rental costs would have to be controlled within INR 50-INR 70/sqft/month to maintain profitability.

The Revenue per sqft of major retailers is as following,

  • Trent Ltd – Rs 6,036
  • Pantaloon Retail – Rs 6,108
  • Spencers – Rs 7,714
  • Subhikasha – Rs 13,333

Subhiksha, which has the highest number, derives 60% of its sales from the high-turnover, low-margin category of fruits and vegetables. In Chennai, the revenue per sqft which peaked to about INR 1,100 per month by 2004, has now come off to around INR 700 per month.

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