INTRODUCTION

India has often been called a nation of shopkeepers. Presumably the

reason for this is that a large number of retail enterprises exist in India.
In 2004, there were 12 million such units of which 98% are small family
businesses, utilizing only household labour.
Retailing consists of the sale, and all activities directly related to the sale
of goods or services to the ultimate consumer for personal, non-business
use. Retailing involves all such activities which are related to direct sale
of goods to the ultimate consumer. Retail trade is usually done by the
retailers. A retailer may be defined as a dealer in goods and services who
purchases from manufacturers and wholesalers and sells to the ultimate
consumers in small quantities. Retailers generally operate near the
residential areas. They also provide free home delivery and credit to
selected customers.

WHAT DOES THE RETAILING INDUSTRY INCLUDE?

• Department Stores
• Discount Stores
• Clothing Stores
• Specialty retailers
• Convenience Stores
• Grocery Stores
• Drug Stores
• Home furnishing retailers
• Auto Retailers
 • Direct Sales Catalog and mail order companies

THE IMPORTANCE OF RETAILING

• Organized retailing in India was estimated at Rs.18, 000 crores in
2002-2003 and has grown at about 40% over the last 3 years
(Source KSA Retail Outlook).
• Retailing has a tremendous impact on the economy. It involves high
annual sales and employment. As a major source of employment
retailing offers a wide range of career opportunities including; store
management, merchandising and owning a retail business.
• Consumers benefit from retailing in that, retailers perform
marketing functions that makes it possible for customers to have
access to a broad variety of products and services. Retailing also
helps to create place, time and possession utilities. A retailer's
service also helps to enhance a product's image.
• Retailers participate in the sorting process by collecting an
assortment of goods and services from a wide variety of suppliers
and offering them for sale. The width and depth of assortment
depend upon the individual retailer's strategy.
• They provide information to consumers through advertising,
displays and signs and sales personnel. Marketing research support
is given to other channels, members.
 • Retailing in a way, is the final stage in marketing channels for
consumer products. Retailers provide the vital link between
producers and ultimate consumers.

FUNCTION OF RETAILERS:-
• Assembly of goods from various manufacturer units and
wholesalers.
• Sub division of good.
• Storage of goods in godown as well as their retail shops.
• Risk- bearing.
• Market research.
• Free home delivery and service after sales.

OBJECTIVE OF THE STUDY

1. Why people come to subhiksha stores.

2. Why people are not coming in these days to subhiksha stores for
purchasing even its mobile.
3. To know how subuiksha diversified its business on its own very
rapidly.
4. To know about Pricing strategy and market strategy.
 ABOUT SUBHIKSHA
(BACHAT MERA ADHIKAR, SUBHIKSHA MERA ABHIMAN)
Subhiksha retail shop is established at 1997 by R. Subramanian at
Chennai. It is first established in pharmaceutical and food grocery. Then
after it has been diversified into several field such as supermarket,
mobile stores etc. the managing director R Subramanian has done its
engineering from IIT Chennai and done his management course from
IIM ahamadabad. In 1996, he had decided to establish a frim into retail
sector. The branding strategy for this retail store was low-cost and no-
frills, i.e., a reliable and trustworthy store that has the lowest prices. The
image of the store as communicated through various media was that of
one who cared for its customers and ensured the best deals and savings.
However, there was more to Subhiksha’s strategy than low prices. It
focused on building long-term relationships with its customers by giving
them a lifetime of value and savings. The ability to do this stemmed
from its relentless focus on value delivery rather than transactional
relationships. In 2004,subhiksha had established 164 stores all over
Tamil Nadu &Pondicherry. According to Subramanian, 2004 had been a
good year not so much in what happened for retail but more of the
visibility and profile that it achieved and also in setting the expectations
of fast growth. Also, the automobile boom was welcome, because the
ability and willingness of people to travel was what made retail boom in
many countries. However, on the flip side, practically no progress was
achieved in getting industry status for retail. Contrary to some
expectations, availability of additional, quality retail space did not
improve; the rentals actually hardened. This could act as somewhat of a
dampener in the growth of organized retailing. Also, it was expected that
the real estate supply would exceed demand in 2004. Therefore, the
retailers expected retail spaces at good prices, but this did not happen as
only 20 malls became operational in 2004, and costs did not fall a great
deal. Also retailing was seen to have a long gestation of two to three
years, especially with the high real estate costs and big malls. Hence it
was an investment heavy industry.
However, 1998 was a year of inception of organized retailing in India
with Shopper’s Stop opening its first outlet in Mumbai. But it was 2004
when retail began to scale up and got its fair share of attention. With the
economy growing and with some of the metros growing at a decent clip,
one could expect more
growth in the near future. more than 1600 outlets had been established
by the subhiksha at the end of year 2004.

SUBHIKSHA’S PRODUCT

1. SUPER MARKET:- the supper market include qualities groceries,

packaged foods, cosmetics and household provisions, etc.
2. FRUIT AND VEGITABLES:- it include fresh fruit and vegitables
sourced directly from firms and cities outskirts and made available
at reasonable price for the customers.
3. PHARMACY:- Subhiksha stores generally have a in store
pharmacy which stored mostly besic medicine and made available
to the consumer at a flat 10% discount.
4. TELECOME:- Subhiksha had moved into mobile retailer business
and offer handsets, recharge cards from all leading cell phone
manufacture’s at a low price.

GOAL OF THE COMPANY

 Open store for every two kilometer in Chennai.

 550 store by 2009 in Delhi.

 Plan to expand in other part of India.

 STRATEGY OF THE COMPANY

 Focused on the lower & upper middle class people in through the
country.

 Offer a better ambience than typical general store.

 Prices are 8% less than the MRP of the product.

 Inform customers about promotional offers in time to time.

 Store keepers help buyers in purchase decision.

SUPPLY CHAIN AND INVENTORY

 It avoid intermediaries.

 Goods directly procure from manufactures and wholsellers.

 In house built supply chain software.

 Separate godowns to stock branded, unbraned & pharmacy products.

 All stores are connected through internet.

IN GOOD TIME
• Between 2004 and 2007 Rs. 160 crore worth of equity was raised.
 • Debt of 220 crore and a bridge loan of Rs 125 crore was arranged
to fund the national roll out.

• By 2008 the store count reached 1650.

• March 2008 Wipro chairman Aziz Premji picked up 10% stake in

subhiksha.

• Company's valuation reached Rs. 2300 crore.

Until little over three years ago, Subhiksha was only a local player with
150 stores (sep 2006) operating mainly in tamilnadu . The retailer begain
growing rapidly out side the state ,soon after infusion of private equety
capital by I-venture , the venture capital arm ICICI . Iventure took 24%
stake in the company’s equity which until then was primerily held by
Subramanian and his associates . Riding on the back of rapid expansion ,
Subhiksha tern over grow from Rs330 crore to Rs4,300
crore in year 2000-2007 And looked for rising ots tern over to Rs 4,300
from 2,300 stores
Subhiksha had a centralized purchasing system to eliminate multiplicity
of billings, which would occur if the stores were to make independent
purchases. It bought directly from distributors who sold at only a small
margin above the mill prices and from around 150 manufacturing
companies. Subhiksha had three separate godowns for stocking
pharmacy products, unbranded groceries and branded FMCGs. It had 10
tempos to supply its stores once a day. As the discount format required
holding costs to the minimum, all the stores were connected in an
Intranet to facilitate inventory planning. Subhiksha’s retailing format
was the outcome of a survey which revealed:-
• Customers generally looked for accessibility of the store, availability
and quality of groceries, and price of branded groceries.
• Customers did not like to travel beyond 5 km for purchasing groceries.
• Customers did not place any premium on shopping in posh air-
conditioner set-ups.
 IN A BAD TIME

 Initially pharmacy business faced many trouble.

 Other pharmacist protested & damaged the stores.

 Lower price created doubt about quality standard in the mind of drug
inspector it fallowed by customers.

 Glaxo refused to supply the drugs.

 It filed a suit against Glaxo & won the case.

Apart from this the shubhiksha retail store was in hectic position to
battle for reviving. It has sufferd too much because even it had not
sufficient money for run its retails shop properly yet, its expension of
retail shop was increasing at very high speed. It has not given money to
its own employee. After that there is a very big burden of debt for rental
i.e, 750rs crore.
The management has committed some eventual mistakes which has led
the company towards the
downward position. The first and big mistake committed by the
management of subhiksha is
expanding the number of stores rapidly without sufficient funds in hand.
They thought of raising
equality during September -2008 but the things had gone too far before
they woke up .The global markets were started collapsing and there were
no possible chances of raising Funds.
 MAJOR COMPETITOR
It is very difficult to servive with their competitor on same product line.
After establishing, subhiksha went on high and high but its real test was
with its market competitor when it looses its market share.
• BATA INDIA LIMITED was the one of the big competitor at the
time of establishment. During 2001, BATA spread almost 1600
footwear outlets across the country.
• SPENCER AND COMPANY LIMITED was also in a competeting
position with the subhiksha. It has diversified itself in various
product such as music store, beauty product and health chain.
• KISHORE BIYANI of PANTALOONS was a big threat.
• K. RAHEJAS DEPARTMENTAL STORES whose deals in book
stores was also a major competitor.
• Apart from it, MUKESH. D. AMBANI’S RELIANCE FRESH
was in a position to attract customer through rapid establishment
throughout the country, INORBIT in Mumbai and FORUM in
Bangalore opend their doors for marketing.

SWOT ANALYSIS OF SUBHIKSHA

SWOT ANALYSIS is generally done for knowing the actual position

of the company in entire market.

STRENGTH:-
1. It provide too discount on each product which makes lower
price in compare to the competitive product such as less than 8
to 10%.
2. It has strong top management team by which it can work
efficiently and smoothly for the last 10 years.
 3. It had created brand value in among the customers which make
a competitive edge over the competitors.
4. Subhiksha generally work on information technology which is
very fast to provide information to every level of management.
WEAKNESS:-
1. Lack of expertise in Indian retail environment.
2. Low gread lower management team
3. Long time taken in IT implementation by which it had already
beared many losses.

OPPERTUNITIES:-
1. India is a new in the retail market means there is a very less no of
player who were playing the game in retailing.
2. It had huge number of customers.

THREATS:-
1. Economy uncertainty and recession.
2. Strong competitor was present in national and regional level.
3. Price war and shrinking margin.

WHAT’S IN STORE FOR SUBHIKSHA?

Chennai was rightly called the incubator of retail development in the
country. In these competition days, pricing below the MRP was an
essential tactic. Discount stores were an essential element of organized
retailing. They offered price, assortment and quality besides building
scale quickly and passing on benefits. Value retailing became the new
mantra. Retailers no longer needed to focus on packaging, air
conditioning and music. They now needed to offer competitive prices
that attracted customers. Michael
Fernandes, McKinsey’s associate principal, put it: "Discount retailing
has the potential to be a really big category, since Indians are price
sensitive customers." Subhiksha was talking to venture capital funds and
also looking for private equity participation. “This will be our second
round of funding, and we are talking to several VC funds and also our
existing investor—ICICI Ventures. We will be looking at Rs. 55 crore of
equity being raised, Rs. 55 crore of debt and Rs.30 crore of working
capital,” Subramanian said.
Subhiksha, which had got almost 150 retail outlets in Tamil Nadu and
Pondicherry would open its first store outside the state in Delhi and
Bangalore in April 2004.

CURRENT SITUATION OF SUBHIKSHA

Right now subhiksha is bettling for own revival. It is very difficult to

revive once again, because there is several
reasons behind it.
SUBHIKSHA 1600 STORES TO
REMAIN SHUT:- Subhiksha Retail's 1,600
stores will remain closed atleast till May 2009.
The debt-ridden retailer has been unable to raise
enough funds for operating expenses, including
staff wages, rentals and vendor payments. According to R Subramanian,
managing director, Subhiksha, "We are in no position to replenish stocks
in any of our stores at the moment and, therefore, all the outlets will be
non-operational."
• The company requires around Rs 300 crore immediately.
Subramanian said this process would take 50-60 days and till then
none of the stores would open their shutters. The retailer has a debt
of Rs 750 crore in its books. Zash Investments, Azim Premji's
personal investment entity, has invested Rs 250 crore in Subhiksha
by acquiring a part of ICICI Venture's stake last year.
INDIA: SUBHIKSHA TO SHUT DOWN 20% OUTLETS:-
Beleaguered retail chain Subhiksha said that it would shut down 20% of
its outlets because of liquidity crunch and renegotiate with the owners of
rentals for another 30% -35% of its stores reported the PTI quoting the
Managing Director of Subhiksha R.Subramanian. The managing director
said that the company hopes to retain about 50% of its properties and
open back about 80% of the outlets after the ongoing Corporate Debt
Restructuring. The company plans to give up properties where it
believes the current rents could be lower than the contracted rents to be
able to re-sign contracts at lower rates. He further said that the company
is negotiating with the property owners for a mutually agreed solution in
view of non-payment of lease rentals. According to an Economic Times
report, many irritated owners of properties have filed eviction cases
against the retail chain for non-payment of rent for the past several
months. Owners of many properties reportedly said they have been
asked to return deposits and pardon rental defaults on sympathy grounds.
An owner of a property who had let it for rent since 2001 reportedly
stated that the retail chain did not go by their agreement for a rise in rent
as agreement and responded to his legal notice after a year.

SUBHIKSHA HAVEN’T PAYS THEIR 15000

EMPLOYEE’S SALARY:- Some over 15,000 employees of retail
chain Subhiksha have not been paid since October. The company is now
offering two month salary in return for a signed undertaking from
employees that they will go on leave without pay until May 31st. “There
are 15,000 people working in the company. Lots of salary arrears have
happened. This is human tragedy that we have not been able to pay
salaries. It is not the unwillingness. But the inability of the company to
pay to the staff',” says MD, Subhiksha, R Subramanian. Business is at a
standstill. Subhiksha owes Rs 35 crores to suppliers, Rs 20 rupees in
store rentals and another Rs 18 crore in back wages. A total of Rs 300
crore is needed for Subhiksha to restart business. It is trying to raise
money from existing and new lenders but that will take at least two
months to materialise. Ironically, Subhiksha cannot afford a complete
shut down.

SUBHIKSHA SUBMIT FINANCIAL PAPPER TO

MADRAS HIGH COURT:- Chennai/New Delhi: Distressed
discount retailer Subhiksha Trading Services Ltd submitted some
financial documents to the Madras high court on Wednesday. These
documents included the company’s balance sheets for four fiscals from
2005-06 to 2008-09 and details on its assets and liabilities, said a lawyer
represented the firm, who did not want to be named. The retail firm has
shut all its 1,600 stores and is waiting to complete a process to
restructure its debts by a group of about 12 banks. Subhiksha presented
the documents after an order from a division bench of the high court that
is hearing a petition to liquidate its assets. The petition has been filed by
a lender, Kotak Mahindra Bank Ltd, which wants to recover dues worth
about Rs40 crore. The court stayed the appointment of a liquidator
provided the retailer submitted financial documents by Wednesday.
Another lawyer, who is representing Kotak Mahindra, said that
Subhiksha has submitted some documents with the court. “They filed
some papers today...but we have no idea about the content,” lawyer
Karthik Seshadri said. Kotak Mahindra is one of the lenders that
together have lent Subhiksha around Rs750 crore. The bank, however, is
not part of the consortium that is working on restructuring the distressed
firm’s debts. The country’s largest discount retailer was forced to shut
its network of supermarkets across India after founder and managing
director R. Subramanian said the company ran out of cash and was
unable to keep its operations running. “These sealed documents will be
opened only on 12 June (the scheduled date for the next hearing of the
lawsuit). These are not accessible to the public,” the Subhiksha lawyer
said. He declined to share details provided in the documents, citing
client confidentiality. In an emailed response to questions sent
by Mint asking whether the company shared its financial details with the
court on Wednesday, Subramanian said, “We do not comment on
matters which are sub judice.” Subhiksha’s second largest stakeholder,
ICICI Venture Funds Management Co. Ltd, and other lenders and even
some of the board members have alleged in the past that the company
management, which primarily comprises Subramanian, was denying
them access to financial details.Quoting three executives from three
banks, Mint reported on 20 May that the company was not letting them
and an independent auditor hired by them access its accounts, and hence,
they were not able to make any progress on the corporate debt
restructuring package. The lawyer quoted first said that these documents
will not be made available to anyone except the court. The company has
filed its balance sheet and profit and loss account statements with India’s
Registrar of Companies, which oversees the functioning of firms in the
country, only up to March 2007. According to the profit and loss
account of the company for the fiscal year ended 31 March, 2007, its
income and net profit were Rs712.54 crore and Rs18.35 crore,
respectively, against Rs305.23 crore and Rs10.28 crore, respectively, in
the preceding financial year.

REVIVAL PROCEDURE OF SUBHIKSHA

1. HP FORMS SERVICE TIE-UP WITH SUBHIKSHA
STORES:- HP announced that it has won a financing and asset
management services contract from Subhiksha, one of the largest
supermarket, pharmacy and telecommunications company and one
of the country’s fast-growing enterprises.
HP has worked with Subhiksha over the past year to enhance the
latter’s IT infrastructure and help drive the expansion. HP
Financial Services, the company’s asset management services and
leasing subsidiary, is providing financing for software licenses as
well as leasing and asset management services for the IT assets
Subhiksha is deploying to expand its technology infrastructure.
2. ICRA ARM TO HELP REVIVE SUBHIKSHA:- A
consortium of banks that are owed money by defunct retailer
Subhiksha Trading Services Ltd has hired a division of rating
agency Icra Ltd to carry out a feasibility study to revive the firm
after a similar attempt involving an audit and consulting firm failed
due to Subhiksha’s alleged non- cooperation. A senior Icra
executive who asked not to be identified said the agency’s wing
Icra Management Consulting Services Ltd has got the “mandate”
for a viability study of Subhiksha from a “consortium of clients”.
“It’s a case of a company in distress and, therefore, it’s a feasibility
study,” said the senior Icra executive. “It’s currently work-in-
progress.” The group of 13 banks including ICICI Bank Ltd,
HDFC Bank Ltd and Yes Bank Ltd, that is collectively owed
around Rs750 crore by Subhiksha, had earlier engaged Ernst and
Young to carry out a study on how to revive the retailer. However,
the banks alleged that Subhiksha did not allow E&Y auditors to
examine its books and the study was never completed.

SUGGESTION AND RECOMMENDATION

1. TIE-UP with more and more consultants from multiple
segment.
2. They should concentrate on price.
3. Appointment of skilled sales executivies.
4. Proved good environment inside sobhiksha retail shop sush
as well arranged the product and good lighting effect with
smooth music.
5. Hire some technical person who can solve the minor problem
in the outlet.
6. First see the current money in hand then try to expand their
unit in across the country.
 CONCLUSION
India is a nation of shopkeeper starting from the past to till now. The
size and format of the shop are being changed from time to time. In
recent time there is a big mall, departmental store, supermarket,
hypermarket etc. subhiksha is started its journey by the managing
director of R.Subramanian at Chennai in 1997. It was established in
pharmaceutical but lettar it has took several faces such as food and
groceries, mobile store, etc. from 2000 to 2005, this was a prosperity
period for the subhiksha. In this period it has established its several new
branches across the country. But after 2005, it was its declining stage
due to competitor and its own commit mistake. After SWOT analysis of
subhiksha, there is some but important suggestion by which it can touch
sky once again.