Demand Up But Greater Efficiencies Needed

In spite of the immense potential of India's mass grocery retail (MGR) market - it is one of BMI's most attractive destinations for emerging market (EM) retail investment - the sector remains a high outlay/low immediate returns business. No company better embodies the challenge this represents than local market leader Pantaloon Retail, the retail subsidiary of Future Group conglomerate. Pantaloon's sales have soared on the back of its aggressive expansion efforts but profit growth has struggled to keep pace (see chart). As demonstrated by its current business strategy, the company needs to find efficiencies and improved funding if it is

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