Hypermarket operations are expected to spread throughout India as the organised retail sector recovers from the economic downturn, a new study has suggested.

According to a study by market analysts KPMG and the Associated Chambers of Commerce and Industry of India, around 315 hypermarkets will be established in "most" tier I and II cities by 2011, with openings expected in tier III towns from 2011 onwards.

The study, Reinventing India's Retail Sector, said that that even in 2008, 212 towns had "sufficient market potential" for hypermarkets for "break even existence". However, this potential is "yet to be realised", researchers added.

Currently, organised retail in India is witnessing year-on-year growth of about 20%. However, after 2011 this is expected to slow to 15% as the market becomes more competitive.

Assocham and KPMG suggested that retailers should have tier III, IV and V towns "on the radar" in order to start planning openings in these less densely populated areas.