The Hindu Business Line : Retailers upbeat on profit growth

Advertisement

New Delhi Jan. 23 Buoyed by economic growth and rising income levels across Asia, retailers' sentiment for the next 12 months is correspondingly strong, and retailers now have more aggressive expansion plans, reports Jones Lang LaSalle in its third annual Retailer Sentiment Survey-Asia.

In India an overwhelming majority (95 per cent) of retailers believe that their turnover will improve in the coming year, and half are expecting improved profit margins.

Expansion Plans

Overall in Asia, three-quarters (75 per cent) of the respondents believe that their gross turnover will improve over the next 12 months. This compares favourably with the second survey in 2005, in which only 65 per cent of the surveyed retailers expected turnover to strengthen. However, retailers in Asia are more guarded about their profit expectation, with slightly less than half (46 per cent) expecting an improvement in profit margins.

Retailers now also have more ambitious expansion plans than they did just a few years ago.

The vast majority of respondents (92 per cent) have plans to expand over the next 12 months. Among those with plans to expand, increasing the number of stores is the preferred choice (90 per cent), followed by increasing product range or services (80 per cent).

Interestingly, 44 per cent of the respondents have plans to merge with or takeover another company.

"The emerging retail landscape in India shaped by a burgeoning middle class, rising disposable incomes and relaxation in retail norms, translate into a bullish outlook for a majority of the retailers in India. Our cities vary widely by level of retail development and consumer spending power and retailers are constantly evolving newer strategies to capture their share of the market. There seems to be an increasing preference for shopping malls, but we still believe that traditional high street locations will continue to be an integral part of the Indian retail experience," Mr Vivek Kaul, Head-Retail & Leisure Advisory, Jones Lang LaSalle India, said.