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The "economics of small-format grocery retailing in India" has been misunderstood by Subhiksha (a store brand in the organised retail segment in India), who got cash strapped (The Financial Express, 2009), and the employees didn't get their salaries for several months.
Despite all these issues there are unlimited opportunities supporting the Indian economy as a front runner in the future, for high growth in the organised retail sector.
An efficient supply chain will lead to reducing the costs and optimising the inventory (ASA & Associates, 2008).
A very large part of the Indian retail business is unorganised.
These factors have forced the retail organisations to focus on branding the offerings, expanding the retail space and organising this operations and processes.
This has resulted in demand for an increased efficiency of the supply chain system and thereby making the relationships in the distribution network more intricate.
The Indian organized retail industry has the capability to grow along with the growing wealth of the Indian middle class due to their rising disposable income (CII- AT Kearney, 2006) thereby increasing the demand for lifestyle goods.
The last decade saw a great boom in the organised retail industry in India which is attributed to the changing demographics, international brands foraying in India, infrastructure developments, credit availability, usage of latest technology and a world class shopping experience.
Despite plenty of opportunities available for the organised retailing in India, the industry is still in its premature stage.
The Indian organised retail business seems to be a minnow when compared with its counterparts in other emerging economies.