Jones Lang LaSalle Meghraj expected modern retail to grow market share from 4% to 22% by 2010, in addition the number of operational malls was predicted to double to over 400 by the same year.

Revised figures

Contrast to now, Retailers Association of India has cut sector growth outlook to between 10% - 12%, revised down from 35%. While the luxury segment appears to be in good health, tier 2 and tier 3 cities offer some respite and rural India has potential, India's 200 million urban dwelling, upper middle class are changing their buying behavior. As demand for goods and services drops strategies are being revised:

• Argos closes its 5 Mumbai stores, and its telephone and internet ordering service, run in conjunction with its partner HyperCity.

• Reliance Retail, having failed to hit its 1000 store target, closes 25 of its 590 flagship Reliance Fresh grocery stores.

• Etam, the Paris fashion group ends its 50:50 partnership with Future Group.

• Subhiksha, India's biggest discount retailer closes up to half of its 1,600 stores.

• Foodland Fresh, a Mumbai based chain closes 39 of 42 stores.

• Speculation surrounds FCUK, suggestion is they will pull out of India.

Stepping back from unproven markets

Pressures in home markets have forced international brands to temper investment, when they return (as they certainly will) they will be wiser. Bryan Roberts of Planet Retail sums it up best, "There are a lot of people chasing not much market. Many international players have enough to worry about at the moment without putting money into unproven markets."

Local as well as international mass-market retailers are learning that despite miracle growth, India and its consumers are still vulnerable to global downturn.