Grocery retail has a current growth rate of around 14 to 15% and it is expected to have a constant CAGR of 8% over the future years. Grocery retail can be broadly divided into three types of retail forms- the local kirana shops, hypermarkets and supermarkets. The kirana stores continue to have the maximum market share and while the hypermarkets and supermarkets display the potential to grow by a great amount over the years. The current scenario of competition in this category is noteworthy. Future Value Retail is the leader in the grocery retailer due to its spread and quality service by its hypermarket, Big Bazaar. Future value includes other brands like Food Bazaar, KB’s Fair Price. The other major players of this category are Aditya Birla Retail and Reliance Retail. Big Bazaar has 160 hypermarkets outlet and hence becomes the highest contributor to sales in terms of value. Food Bazaar has 60 outlets and KB’s Fair Price has 200 outlets currently. Future group is also planning to open a food chain called Foodhall in their stores to attract more customers. 6Ten is another company that was facing a decline but later found more franchisees and returned into the market with a good value share. There are forecourt retailers like Bharat Petroleum that are facing decline in their value share and are now shutting down outlets that are making losses. Modern grocery retailers are expanding their number of outlets and penetrating into better locations for long term to increase their profitability. With numerous players in this category along with the local kirana stores, there is also a new dimension of FDI that has been sanctioned by the government which would increase the competition for these domestic players by a large extent. But terms of the FDI policy allow foreign companies to target only the urban areas and hence the domestic players are focussing more on the tier 2 cities due to this saturation. Another new player in this category is...
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