AN EMPIRICAL STUDY ON ORGANIZED RETAIL OUTLET AND CONSUMER PERCEPTION TOWARDS RETAIL STORES IN TIRUCHIRAPPALLI CITY

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M. Farook Hussain and Dr. R. Khader Mohideen, “An Empirical Study on Organized Retail Outlet and
Consumer Perception Towards Retail Stores in Tiruchirappalli City” – (ICAM 2016)
AN EMPIRICAL STUDY ON ORGANIZED RETAIL OUTLET AND
CONSUMER PERCEPTION TOWARDS RETAIL STORES IN
TIRUCHIRAPPALLI CITY
M. Farook Hussain
Assistant Professor, Department of Business Administration,
Jamal Mohamed College (Autonomous), Tiruchirappalli – 20
Dr. R. Khader Mohideen
Head, Jamal Institute of Management,
Jamal Mohamed College (Autonomous), Trichirappalli – 20
ABSTRACT
The Indian Retail Industry is divided into Organized and Unorganized Sectors.
Traditional markets are making way for organized formats such as Departmental Stores,
Hypermarkets, Supermarkets and Specialty Stores. Indian Retail Industry contributes over
10% of the country’s GDP. Strong income growth, changing lifestyles, and favorable
demographic patterns, suggest that by 2020, the Modern Retail Industry in India will be worth
US$ 275-400 billion. This study was undertaken, considering three competitive Retail Chain
Outlets, Big Bazaar, Reliance Fresh and Marks Spencers, to evaluate the consumers’ opinion
and preferences towards these outlets. The study also highlights the pros and cons of the
outlets considered and the level of satisfaction compared to the Local Retail Outlets.
Key words: Consumer Perception, Retail Stores Outlets, Organized Retail Outlet, Indian
Retail Industry.
Cite this Article: M. Farook Hussain and Dr. R. Khader Mohideen. an Empirical Study on
Organized Retail Outlet and Consumer Perception towards Retail Stores in Tiruchirappalli
City. International Journal of Management, 7(2), 2016, pp. 489-496.
http://www.iaeme.com/ijm/index.asp
INTRODUCTION
The Indian Retail Industry is divided into Organized and Unorganized Sectors. Organized Retailing
refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales
tax, income tax, etc. These include the corporate-backed hypermarkets and retail stores, and also the
privately owned large retail businesses. Unorganized Retailing, on the other hand, refers to the
traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general
stores, paan/ beedi shops, convenience stores, hand cart and pavement vendors, etc. India’s Retail
Sector is the fastest growing sector in the Indian Economy. Traditional Markets are making way for
new formats such as Departmental Stores, Hypermarkets, Supermarkets and Speciality Stores. Indian
Retail Industry contributes over 10% of the country’s GDP, being driven by strong income growth,
INTERNATIONAL JOURNAL OF MANAGEMENT (IJM)
ISSN 0976-6502 (Print)
ISSN 0976-6510 (Online)
Volume 7, Issue 2, February (2016), pp. 489-496
http://www.iaeme.com/ijm/index.asp
Journal Impact Factor (2016): 8.1920 (Calculated by GISI)
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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 -
6510(Online), Volume 7, Issue 2, February (2016), pp. 489-496 © IAEME Publication
490
changing lifestyles, and favorable demographic patterns. By 2020, Modern Retail Industry in India will
be worth US$ 275- 400 billion. Shopping in India has witnessed a revolution with the change in the
Consumer Buying Behaviour and the whole format of shopping has also altered. This study was
undertaken, considering three competitive retail chain outlets, Big Bazaar, Reliance Fresh and Marks
Spencers, to evaluate the consumers’ opinion and preferences towards these outlets. The study also
highlights the pros and cons of the outlets considered and the level of satisfaction compared to the local
retail outlets.
ORGANIZED RETAILING IN INDIA
Organized retailing comprises mainly of modern retailing with busy shopping malls, multi stored malls
and huge complexes that offer a large variety of products in terms of quality, value for money and
makes shopping a in terms of quality, Value of Money and makes shopping a memorable experience.
The retail sector is presently undergoing a transition in India. Previously, customers used to go to
kirana stores to purchases their necessities. This later changed to bigger shops run by one man with a
few employees. Here all the work was done manually. Gradually more sophistication seeped into this
sector and department stores came into being. Beginning in the mid-1990s. However, there was an
explosion of shopping malls and plazas where customers interacted with professional and not with just
one single person-the owner. An important point here is that customers’ requirements are catered to by
trained staff. Today, organized retailing is on continuous increase of its market share from the past.
Retailing can be categorized as of different sectors like food and grocery, Clothing and textiles,
Consumer durables, footwear, furniture and furnishing, Catering Services, Jewellery and Watches,
Books, Music and Gifts, Mobile Handsets and Others.
RETAILING IN INDIA
Retailing consists of all activities involved in selling goods and services to consumers for their
personal, family, or household use. It covers sales of goods ranging from automobiles to apparel and
food products, and services ranging from hair cutting to air travel and computer education (Chetan
Bajaj et al) retailing is one of the largest sectors in the global economy. In India for a long time the
corner grocery store was the only choice available to the consumers. With the increasing demand of the
customers spurred by changing trends, aspiring needs for variety, the traditional retail gave rise to
modern retail format. The traditional food and grocery segment has seen the emergence of
supermarkets/grocery stores, convenience stores and hypermarkets. Traditionally, retailing has not been
a structurally organized industry in India. Organized retail network was seen only in fabrics, with large
mills building their own exclusive stores like Raymond’s, Bombay dyeing etc. The Indian retail
industry on the whole is divided into organized and unorganized sectors. Unorganized/Traditional
retailing refers to the traditional formats of low-cost retailing, for example, the local kirana shops,
owner manned general stores paan/beedi shops, Convenience stores, hand cart and pavement vendors,
etc. (Corporate Catalyst India, “A report on Indian retail industry”, 2006).
In India, the terms large-scale, modern-format and organized are used synonymously even though
they have different meanings. Large-scale refers to the scale of operation of retail business which in
turn implicitly refers to a chain of stores. Modern –format basically refers to self-service. However,
many of the self-service stores also called as “Supermarkets”, are in the range of 500 square feet or less
in size and are nothing more than independent mom-and-pop stores. And organized retail typically
means large-scale chain stores which are corporatized, apply modern-management techniques and are
very likely to be self-service in nature. Most of the estimates of organized retail market size refer to
only large -scale retail. (Vijay Anand and Vikram Nambiar). Modern retail market has seen a
significant growth in the past few years with large scale investments made by Indian corporate houses
primarily in food and grocery retailing. The total retail (organized and unorganized) industry in India is
estimated to be Rs 20 lakh crore in 2010. This is expected to reach Rs 27 lakh crore by 2015.
Organized retail, which is estimated to be Rs 1.0 lakh crore (5% share) in 2010, is projected to reach Rs
3.0 lakh crore (11% share) by 2015. This means a tripling of the current size and scale of organized
retail in the next five years, i.e. 2010-2015. Organized retail will grow at a fast pace. (Raghav Gupta et
al).

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RETAIL FORMATS IN INDIA
 Hyper Marts/ Super Markets: large self – servicing outlets offering products from a variety
of categories. Examples like Spencer’s, Big Bazaar.
 Mom-and –pop Stores: they are family owned business catering to small sections; they are
individually handled retail outlets and have a personal touch.
 Departmental Stores: are general retail merchandisers offering quality products and services.
Examples like Ebony, Shopper’s Stop, Westside.
 Convenience Stores: are located in residential areas with slightly higher prices goods due to
the convenience offered. Examples like in&Out, Safal, 6ten.
 Shopping Malls: the biggest form of retail in India, malls offers customers a mix of all types
of products and services including entertainment and food under a single roof.
 E-trailers: are retailers providing online buying and selling of products and services.
 Discount Stores: these are factory outlets that give discount on the MRP. Examples like
Subhiksha, Koutons, Nike, and Levis.
 Vending: it is a relatively new entry in the retail sector. Here beverages, snacks and other
small items can be bought via vending machines.
 Category Killers: small specialty stores that offers a variety of categories. They are known as
category killers as they focus on specific categories, such as electronics and sporting goods.
This is also known as Multi Brand Outlets or MBO’s.
 Specialty Stores: are retail stores dealing in specific categories and provide deep assortment.
Mumbai’s Crossword Book Store and RPG’s Music World is a couple of examples. (Sunita
Sikri, Ms. Dipu Wadhwa).
REVIEW OF LITERATURE
Kincade, Doris H.; Woodward, Ginger A.; Park Haesun (2002) studied the Buyer Seller Relationships
as a critical factor for success for promotional support in the Apparel Sector. The study also describes
the retailers’, perception towards promotional support. Broad bridge and Calderwood, 2002 emphasize
the fact that in an age of increasing competition from large scale organized grocery retailers, local
shops need to have the commitment and willingness to cater to the local community for survival.
Hyllegard, Karen; Eckman, Molly; Descals, Alejandro Molla; Borja, Miguel Angel Gomez (2005)
studied the consumers’ perception of US apparels and the services rendered by the retailers in the
international market. Sinha P.K., Mathew E., Kansal Al (2005) carried out a study on the format of
food and grocery retailer for one product and one customer segment. Miranda, Konya and Havrilla
(2005) studied the Consumer Behaviour which was influenced by several other reasons such as
frequently buying schemes, preference for an in store delicatessen etc,. Mayer (1989), claimed that
store image has been one of the main topics in retailing research and recent meta – analysis identifying
that the Store Visit Frequency is strongly influenced by Store Image Attributes.
OBJECTIVES OF THE STUDY
 To ascertain brand awareness of the outlets considered for the study.
 To analyze customer satisfaction towards products and services offered and to understand the
factors that influence consumers to prefer the outlets.
 To provide suitable suggestions to improve the delivery of products and services by the
outlets.
SCOPE OF THE STUDY
This study helps us to gain independent knowledge about the consumer perception of the outlets
identified. It can be extended to acquire the opinion of the consumers towards other local retail outlets
like Femina, Kavery Supermarket etc., in Trichy.

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METHODOLOGY
RESEARCH DESIGN
Researchers have adopted the descriptive method of research as it is aimed at gaining knowledge and
better understanding of the consumers and their choice of preference towards retail outlets. The impact
of sprawling retail stores on their perceptions are also studied with the help of this research design.
SAMPLING METHOD AND SAMPLE SIZE
Researchers have adopted Non-Probability Convenience Sampling Technique to obtain the samples
from the population considered for the study. The Sample Size of the Study was 100 respondents. The
footfalls of consumers at each of the outlets considered for the research were converted into samples
for the study and consolidated into a sample size of 100.
DATA COLLECTION
Researchers collected information from both primary and secondary source required for the research
study. For primary data, a Structured Questionnaire was framed and consumers were interviewed
directly to obtain required data for the research study. Secondary data were collected from books,
journals, magazines and websites etc.
TOOLS USED FOR DATA ANALYSIS
Chi-Square Test, the most widely used non-parametric test, was used to test the goodness of fit
between two variables where one variable is dependent on the other variable. A two – way ANOVA
was used to test the effects of the two factors simultaneously on the response variable of interest.
Correlation Coefficient was also evaluated to find out the degree of correlation between the two
variables taken for the study.
HYPOTHESIS OF THE STUDY
NH 1: There is no significant relation between the outlet choice and the products purchased.
NH 2: There is no significant relationship between the purchase preference of consumers based on the
influencing factors and the outlets concerned.
NH 3: There is no significant relationship between effective media advertising and the outlet
preference of the consumers.
NH 4: There is no significant relationship between Quality and the Products purchased by the
consumers.
ANALYSIS AND INTERPRETATION
Table I Factors Influencing to Purchase in the Outlets
Preferred Outlet Number of Respondents Percentage
Quality 27 27%
Affordability 20 20%
All under one roof 25 25%
Service 12 12%
Variety 16 16%
Total 100 100%
Source: Primary Data
Above Table I depicts the factors that influence the consumers in choosing a particular outlet for
purchase. It shows that 27% of the respondents were influenced by quality, 20% of the respondents
were influenced by affordability, 25% of the respondents were influenced by All under One Roof
Concept, 12% of the respondents by services offered and 16% of the respondents were influenced by
variety of products and brands available in the outlets.

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Table II Respondents Preference of Products to Purchase in Outlets
Preferred outlet Number of Respondents Percentage
Apparels 23 23%
Food & Groceries 33 33%
Fruits & Vegetables 19 19%
Others 25 25%
Total 100 100%
Above Table II shows the consumers’ preference of outlets based on the products they purchased. It is
learnt that 23% of the respondents prefer to shop for apparels, 33% of the respondents go for
purchasing food & groceries, 19% of the respondents prefer fruits & vegetables and 25% of the
respondents prefer to shop other products.
Table III Gender Classification
Gender Number of respondents Percentage
Male 35 35%
Female 65 65%
Total 100 100%
Above the Table III shows that the gender classification of the sample result is given in the Table-III.
65% of the respondents were Female Customers and 35% of the respondents were Male customers.
Table IV Chi-square Analysis Outlet Choice of the Consumers Vs the Products Purchased
Products
Apparels Food & Fruits & Others Total
Outlets groceries Vegetables
Big Bazzar 10 06 04 08 28
Reliance Fresh 03 04 05 03 15
Marks Spencers 04 12 05 04 25
Others 06 11 05 10 32
Total 23 33 19 25 100
Calculated Value = 8.813; Degree of freedom = 9; Table Value = 16.919 at 5% level; H0 accepted.
Above the table IV shows that the demographic characteristics analyzed, it is identified that about
43% of the respondents were in the age group of 18-28 and 30% of them under the age group of 28-
38.In other words, Organized Retail Chain Outlets are visited mostly by young customers. The
satisfaction level of the respondents for each Outlet considered for the study was analyzed and
interpreted. 57% of the respondents were satisfied with the performance and services provided by Big
Bazaar, 42% of the respondents were satisfied with Marks Spencers and 35% of them were satisfied
with Reliance Fresh. From the analysis with the help of Chi Square, the significant relation between
the outlet choice of the consumers and the products purchased at 5% level of significance was proved
null since the calculated value (8.813) was less than the tabulated value (16.919). (Table- IV)

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Table V Chi-Square Analysis (2) Outlet Choice of the Consumers Vs the Media Used for Advertising
Media
TV Radio Newspaper Others Total
Outlets
Big Bazzar 15 03 04 06 28
Reliance Fresh 05 04 03 03 15
Marks Spencers 07 03 11 04 25
Others 13 10 06 03 32
Total 40 20 24 16 100
Calculated Value = 13.953; Degree of freedom = 9; Table Value = 16.919 at 5% level; H0
accepted
From the above Table V the significant relation between the outlet choice of the consumers and the
products purchased at 5% level of significance was also tested and proved null since the calculated
value (13.953) was less than the tabulated value(16.919)- (Table- V).
Table- VI Correlation Coefficient between Quality Factor and the Product Category Preferred
(Apparels)
X x
2
Y y
2
xy
x y
(QUALITY) (APPARELS)
11 2.5 6.25 10 4.25 18.06 10.625
7 -1.5 2.25 3 -2.75 7.56 4.125
11 2.5 6.25 4 -1.75 3.06 -4.375
5 -3.5 12.25 6 0.25 0.625 -0.875
X = 34 x = 0 x2
= 27 Y = 23 y = 0 y2
= 28.7 xy = 9.5
From the above Table VI there is a high degree of +ve correlation between the variables. The
product category ‘Apparel’ preferred by consumers is influenced by the Quality factor. Considering
the Quality Factor out of all other influencing factors in the Apparel Product Segment, the degree of
correlation was analyzed with the correlation coefficient and it was discovered that there was a high
degree of positive correlation between the two variables concerned- (Table- VI)
Table VII Two – Way Anova Table
Sum of
Squares
Mean Squares
5% F-limit (From the above
Table
Source of variation D.F. F - Ratio
Between columns 56.5 4 14.125 6.165 3.25
(Influencing
factors)
Between 18 3 6 2.618 3.49
rows(outlets)
Residual 27.5 12 2.291
Total 102 19
From the above Table VII - A two way ANOVA was used to test the significant difference
between the purchase preferences of the consumers based on the influential factors and the outlets
considered at 5% level of significance. From the analysis it was found that the purchase preference of

495
the consumers significantly differed, based on influencing factors like Quality, Service, Variety, etc.
and there was no significant difference between preference of consumers as far as outlets were
concerned-(Table- VII).
RESULT OF TABLE-VII
 For degree of freedom (4.12) at 5% level of significance, the table value (3.25) was less than
the calculated value (6.165) and hence the null hypothesis is rejected. In other words, the
purchase preference of consumers significantly differed based on the influencing factors.
 For degree of freedom (3.12) at 5% level of significance, the table value (3.49) was greater
than the calculated value (2.618) and hence the null hypothesis is accepted. In short, there was
no significant difference between the purchase preferences of consumers as far as outlets were
concerned.
FINDINGS OF THE STUDY
1. The study identifies that only fewer men visit retail stores as against women.
2. Regarding the preferred outlet choice of the consumers, the highest number of responses were
attributed to Big Bazaar since it attracted people of many income groups, and offered products
that appeal to a wide array of consumers. Next comes Marks Spencers and Reliance Fresh
where price factor predominated the perception of consumers and made them hesitate to shop
in these Organized Retail Stores.
SUGGESTIONS
3. By providing products that are geared towards men and by providing a shopping experience
that attracts men, the retail stores can expand their customer base.
4. It can be deduced that consumers, who shop only once a month, look to buy groceries and
other essentials to last them a month. Therefore, retail outlets have tough customers in those
who shop once a month. Such customers look to buy in bulk. Hence to capture this market,
retail outlets must put in place strategies that attract them like Home Delivery Services and
discount for bulk purchase.
5. The products can be assorted based on their price also, so that the consumers can pick
commodities based on their income potentiality.
6. The nationally branded retail chain outlets can provide installment purchase schemes for the
durable products or should come forward to alter their marketing strategies favoring the local
customers.
7. From the study, it is understood that Promotional Activities and providing offers and
discounts can be advertised in the local TV channels and Radio for better reach. This can alter
the consumers’ perception towards outlets like Spencers and Reliance Fresh where such
strategies are lacking.
CONCLUSION
The study has analyzed the pros and cons of three outlets. The trend of modern retail markets and its
implications towards the consumers’ perception was studied. Though the ambience, assortment style,
computerized weighing and billing system attract the consumers and distinguishes the Organized Retail
Outlets from the Traditional Retail Shops, the inadequate services provided to the consumers reduces
the affinity and loyalty to these outlets. To compete in this sector, retailers need to have up-to-date
market information for planning and decision making. The second most important requirement is to
manage costs widely in order to earn at least normal profits. Fixing reasonable price and attracting
consumers with expected services gradually improves loyalty.

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REFERENCES
[1] Abraham, Piyus, Sonal, Vandana (2005), “Marketing Paradigms of Emerging
Economics”, Jan 12 & 13; IIM, Ahemadabad. (www.iima.ac.in)
[2] Beri, Business Statistics, Second edition, Tata McGraw Hills Publications.
[3] Tripathi Adithya P, (2008), Emerging Trends in Modern Retail Formats and Consumer
Shopping Behaviour in Indian Scenario: A Review.
[4] Business Research Methods, (2005), ICFAI Publications.
[5] Hollander Stanley C, (July 1960), “ The Wheel of Retailing,” Journal of Marketing, PP
37-42
[6] Images Retail 2008, Indian Retail Report 2008.
[7] ‘Impact of organized retailing in retail sector’, ICRIER retail report May 2008.
[8] Joseph. M and Soundarajan N, et al., (2008), “Impact of organized retail in the
Unorganised sector” Indian Journal Of Marketing.
[9] Kothari C.R, Research Methodology Methods & techniques, Second edition, New Age
International Publishers.
[10] Pratyush Tripathi & Ajay Kumar Mishra - ‘An Insight in to the growth of New Retail
Formats in India’ National Conference, Osmania University, Hyderabad.

AN EMPIRICAL STUDY ON ORGANIZED RETAIL OUTLET AND CONSUMER PERCEPTION TOWARDS RETAIL STORES IN TIRUCHIRAPPALLI CITY

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