| Organised retail scenario is changing by the day. It is no coincidence that all the, trillion rupee market-cap business houses, namely, Ratan Tata, Mukesh Ambani, Sunil Mittal, Kumar Mangalam Birla and Anil Ambani, have decided to vigorously pursue the retail business, as no one wants miss this multi-billion opportunity. And, their foreign counterparts like Wal-Mart, Carrefour, Tesco and Metro AG, who have either already made or on the verge of making arrangements to somehow enter this fast growing market, even if it means surrendering partial control to a local partner, as the current government policies do not favour infusion of foreign investment in front-end operations of multi-brand retail.
While, Mukesh Ambani is investing Rs. 30,000 crore, Bharti, which has already sealed a tie up with the world's biggest retailer Wal-Mart, has recently announced a plan to invest in excess of Rs.11,000 crore in just the front end operations, excluding the investment in real estate. While, Tatas already have two companies operating, Kumar Mangalam Birla has not only acquired a running supermarket retail chain in the south, but is said to be ready with an investment of $ 4 to 6 billion. Anil Ambani, the younger of the Ambani brothers, though slightly delayed, is reported to be ready with Rs. 6,800 outlay on healthcare including a 1,000 store pharma retail chains. Anil Ambani is said to be in serious talks with France 's Carrefour, as well.
This has forced the pioneer and the old war horse of Retail, Kishore Biyani to re structure his expansion plans with a view to accelerate the pace of fresh investment according to Indiaretailbiz..
Kishore Biyani owned, the Rs. 2,500 crore pure retail player, Pantaloon, which is currently the country's biggest listed retailing company has decided to hive off one of its popular hypermarket chains, Big Bazaar, in early part of the next fiscal (2007-08). This is being done as a part of the Group's plan to split businesses and raise money for each format separately, which while helping the group to continue expanding the network, will generate financial resources.
In past six months, the group had opened nine Big Bazaars, three Food Bazaars, two Brand Factory outlets, two Pantaloons stores and five other stores across formats, taking the total retail space to 3.8 million sq ft across 32 cities. The Big Bazaar network during 2005-06 is reported to have contributed Rs 2,000 crore to the Future Group's turnover.
Biyani plans to expand the Big Bazaar network of 41 stores to 100 stores, by investing Rs. 1,000 crore, by the end of 2007. Depending on the space and real estate prices in various cities, each Big Bazaar store will require an average investment of Rs 15 crore for 60 or so new stores to be opened during the year. The new stores will cover 15 more cities, including tier-II cities such as Vijayawada and Visakhapatnam . Plans also envisage the setting up of 11 Big Bazaars in Bangalore , eight in Mumbai and seven in Kolkata by the end of this calendar year. The size of outlets will range between 40,000 and 1.7 lakh square feet. In order to improve profit margin, Big Bazaar wishes to put extra emphasis this year on placing more products under own private label in all the 100 stores.
Although, Biyani knows that huge markets remain untapped in small cities, he recognizes that the emerging competitive scenario and aggressive entry of Reliance Retail and Bharti-Wal-Mart will change the dynamics of retailing. He has, therefore, decided to initially put focus on top eight metro and mega cities across the country.
Details at http://www.indiaretailbiz.com |
