Chennai: Growing demand for food and grocery can be met only by opening 4,000 new retail stores, a report has said.
The report comes at a time when e-commerce giants like Amazon and Walmart have taken a strong footing in the country with foreign direct investment (FDI) growing strong in the retail sector.
Released by brokerage firm Motilal Oswal, there has been an expansion in the footprint of retail stores, its revenue and overall growth, which is indicative of their formidable future.
The report said the food and grocery market, as well as the apparel space, would see a compound annual growth rate (CAGR) of 27 per cent and 22 per cent respectively. It predicted the size of the retail market to triple by FY25.
“To cater to robust demand, about 4,000 new store additions will likely be required over the next eight years (2017-25), offering a huge runway of 15 per cent CAGR in retail footprint over the next eight years,” the report stated.
According to Moneycontrol news, startups and other businesses like Paytm have realised that offline stores are much more attractive to customers because they like to touch and feel the products before they spend money, the very reason why Paytm partnered with retail chains like Reliance Digital or Croma.
Retail stores may now be looking at modest operations in order to cut costs and make the business more profitable. Customers should expect leaner store layouts, the promotion of private labels, and membership-based and reward-based models, report added.