While the whole world is witnessing exponential growth in the modern form of retailing, India is no exception. The Indian food and grocery retail is the largest retail segment in terms of market share and has been attracting big corporate retailers to make their presence felt in the segment. Rising interest and growth of organized retailers in this segment has given pace to the growth of modern food and grocery retail in India. The food and grocery retail in India is still dominated by unorganized players and is continuously challenging the corporate retailers to tap the market. In this context, the retailers should be aware of the factors considered by the consumers for visiting an organized retail outlet. Thus, the objective of the present paper is to identify the factors affecting consumers’ decision to purchase food and grocery products from modern retail store by conducting a survey using convenient sampling of hypermarket shoppers in Patna, the capital of Bihar, India. The factors affecting purchasing of food and grocery products from modern retail are identified using factor analysis. The results reveal that seven key factors influence consumers’ purchasing from modern food and grocery retail store.

Retail is the final stage of any economic activity. The word retail is derived from the French word retaillier, which means to cut off a piece or to break the bulk (Pradhan, 2011). The last decade has seen an exponential growth in retail across the world, and India is not an exception. India has been called the ‘nation of shopkeepers’ with around 12 million small shops catering to 209 million of households, with the highest level of retail density of 6% in the world (Ernst and Young, 2007). The Indian retail industry has become one of the rapidly booming sectors of the Indian economy, accounting for roughly 15% of GDP of the country (Deloitte, 2013). The retail sector was valued at US$516 bn in August 2013 and expected to reach at $866 bn by 2015 (Deloitte, 2013). According to Deloitte, the development of retail is not only in major cities and metros, but also in smaller cities and towns. But still the Indian retail market is in its nascent stage, and 92% market share is controlled by unorganized players. Indian retail sector is experiencing a paradigm shift from the unstructured, fragmented, low-cost operating and small unorganized kirana store to the organized store. The rapidly changing lifestyle, tastes and preferences of Indian consumers, demographics, and rise in consumption are the major contributing factors to the growth of modern retail. The organized retail format is expanding at 20% per year, driven by the emergence of shopping centers and malls and growing middle class. In 2010, the larger format of retail accounted for about 4% of the industry and expected to grow at almost 30% by 2015 (Deloitte, 2013). The enormous growth potential of this industry has attracted huge investments from major domestic corporate houses like Tata, Birla, Reliance, Spencer’s, Future Group, etc. and a new form of organized retail has emerged in the past few years. The retail market of India, both organized and unorganized taken together, is likely to grow at a CAGR of 5.5%, whereas the organized retail is growing at 20% (Deloitte, 2013). The blistering pace of organized retail is a clear indication that it is overshadowing the unorganized sector.

Management Research Journal, Factors Affecting, Purchase of Food, Grocery Products, Modern Retail Stores, The Kaiser-Meyer-Olkin (KMO), Principal Component Analysis (PCA), Empirical Study.