Explained: Why food and grocery retail looks like a tough nut to crack

The $4.5-billion Godrej group last week joined conglomerates such as Aditya Birla and Bharti to exit food and grocery retail in the country. The sale of Nature’s Basket, Godrej’s chain of food stores in west India, is the second exit by a big group in a year in the category.

Constituting two-third of the $820-billion retail market in India, the food and grocery segment does have takers such as Reliance Retail, Future and RP-Sanjiv Goenka, who continue to be bullish about the segment. Yet, say experts, a combination of high rentals and overheads, as well as competition from organised, traditional and