Mumbai, Feb 4: Mumbai Metropolitan Region (MMR) has the highest potential for modern retail in the country, pegged at Rs 1,05,000 crore, followed by National Capital Region (NCR) and Bengaluru, a study said.
Mumbai region offers big opportunity for retailers across sectors like apparel, food and beverages, entertainment and daily needs, a joint report by global property consultancy Knight Frank and Retailers Association of India (RAI) said.
"Even though the pace of modernisation of retail formats in the country is slow, Bengaluru and NCR are likely to experience a 50 per cent modern retail penetration by 2026 and 2028, respectively," said Samantak Das, Chief Economist and Director of Research, Knight Frank.
The 'Think India, Think Retail, 2016' report pegged the modern retail penetration in India at 19 per cent in the top seven urban centers, which is extremely low, it said. In US, Singapore and China, modern retail penetration stands at 84 per cent, 71 per cent and 63 per cent, respectively, it said.
The modern retail segment in NCR, MMR and Bengaluru has a potential of more than Rs 1,30,000 crore in the hypermarkets and supermarkets category, it said.
Apparel and food and beverages have a combined potential of more than Rs 30,000 crore, it said.
"In order to support the potential of these two categories, the three cities together would require approximately 20 million sq ft of modern retail space," the report said.
It said the huge potential can be explored by the retail sector, provided a befitting policy framework for the modernisation of the segment is implemented by the authorities.
"While there is potential for overall growth in the brick and mortar retailing methods, proper infrastructure and implementation of FDI retail policies and state-level policies is a must," said Aditya Sachdeva, Director of Retail, Knight Frank. This, in turn, will help in retaining the interest of developers to invest in these formats, he added.