Use of management accounting tools for the measurement and comparison of performance of organized retailing systems in India and at the global level

Abstract

Retail is the largest private industry in the world. In India, the industry contributes over 10% to GDP and employs about 8 percent of the total workforce. In the Global Retail Development Index Report Published by renowned global consultancy firm A.T. Kearney, India was ranked as the first most attractive retail market for three consecutive years from 2005 to 2007. Retail sector in India has been growing very fast. Being the fourth largest economy in Purchasing Power Parity terms, second fastest growing economy worldwide and having favourable demographics, India has attracted the attention of global retailers. Most of the leading global retailers now source products from India; many are in talks with Indian companies for joint projects. Wal-Mart, Tesco, Marks and Spencer have already joined hands with Bharati, Tatas and Reliance respectively for entering the Indian market. According to The Global Retail Development Report, the window of opportunity is closing very fast and the early entrants would get the first mover advantage. In the given scenario, the existing as well as the new retail players will have to compete with best players in the world. In order to enhance performance, it is necessary to first identify the factors that influence the overall performance of retailers with special reference to the Indian Market conditions.