Study on investment pattern and organizational structure of Super markets in India-An empirical evidence of Karnataka

Abstract

Retail business has shown tremendous growth in the World in the recent past. In India, the organized food retailing sector is on the verge of a boom and expected to undergo further change with prospective new domestic and global foreign entrants and the takeover or exit of some existing participants. Among the Indian states, Karnataka is far more forward looking as far as food retailing is concerned. Therefore, it is imperative to study the entire business aspects of organized food retailing. The study indicated that majority of the organized supermarkets has multi outlets operating under the single management. The un-organized supermarkets were formed by the big local and conventional store owners. The average area of the supermarket outlets in Bangalore (4333 Sqft) and Mysore (3133 Sqft) is more compared to other cities of Karnataka like Mangalore (2833 Sqft), Hubli-Dharwad (1833 Sqft) and Belgaum (1200 Sqft) as the supermarkets in these cities were recently converted from the conventional ‘kirana’ format. The average total fixed cost per outlet is Rs. 78.42 lakh for the state as a whole and total costs required to establish a supermarket in the Karnataka is Rs. 261.33 lakh. The investments in establishment, modernization and expansion are capital intensive in supermarkets. In all the supermarkets, the liquid assets to total assets ratio indicated organized supermarkets seems to better than other unorganized supermarkets in terms of assets liquid ratio. Further, organized supermarkets/supermarkets in multi outlet (chain of supermarkets) firms/companies followed line, line and staff, and the functional categories of organizational structures. Whereas line organization was commonly followed in un-organized supermarkets and are family owned.

Key words: Retail, Super market, Multi-outlet, Organization, Investment, Profit