Godrej Nature's Basket MD Mohit Khattar gives his views on what the retail sector can look forward to in 2012:
Given the current outlook of the economy, for some part of the year, there could be potential consumer cut back on spending and banks could tighten their lending norms. This could lead to the Indian organized retailers being under some pressure and impact mass, undifferentiated retailers temporarily. It could lead to the tightening of inventory norms and investments that could lead towards a more efficient supply chain on one end and greater price cuts and offers for consumers on the other end.
Premium and niche retailers that cater to relatively well heeled and discerning consumers are expected to buck the trend and will continue to do well. We don’t expect discretionary spending from this sector to be impacted.
Overall the Indian growth story is strong and therefore the confidence in the organised Indian retail sector also remains robust.
We are also closer to FDI in multi brand retail than at any time before. Once allowed this could see a few re-alignments in the industry and the emergence of newer players.
Online retailing will continue to emerge from the shadows of physical retailing across a myriad of sectors that will both surprise as well as shock. Profitability in this sector could be, however, as tough as in physical retailing.