Reliance Retail To Roll Out Big-box Hypermarkets; Buys Land In 20 Cities And Towns

Reliance Industries Limited (RIL) subsidiary Reliance Retail Limited- Indias second

largest retailer - is set roll out its next phase of retail expansion by funneling big-box hypermarket formats across the country. After the success of its pilot hypermarket formats in cities of Mumbai and Pune, Reliance Retail is optimistic about launching the format in other cities as well and has initiated work towards realizing its multi-lateral expansion plans

This new-fangled focus on setting up big-box formats will follow a different strategy; a shift from Reliance Retails existing retail strategy. For one, the new plan looks to buy land as against lease or rent space for erecting large-format stores.The company has purchased land in 20 cities and towns across the country, including Mumbai, Aurangabad, Kolhapur, Pune, Mysore and Madurai, in the last few months. These land parcels measure approximately 1-1.5 acres each and are estimated to support stores that can stretch anywhere between 60,000 to 80,000 sq. ft. of space. We are buying land wherever there is scarcity of ready space, especially for our large-format stores. It will help in the long run as we don't have to depend on rent inflation and its fluctuations, said Reliance Retail President Bijou Kurein. Secondly, the scale, the range of products on offer, and the consumer experience in the new format will be a slight contrast to that in existing retail formats. Large formats are capable of carrying large volumes and offer considerably higher margins as against smaller retail formats that Reliance Retail already has in place.

As the spotlight falls once again on retail segment, there is a lot riding on the new management of Reliance Retail to make this plan work. The company which is presently under the leadership of ex-Wal-Mart executives, Rob Cissel and Shawn Gray, is hoping to make Reliance Retail a strong and formidable player in Indias retail segment. Their efforts so far - from launching the first cash-and-carry format in Ahmedabad, to accelerating retail store launches has been quite successful and the management now hopes that the bid to establish larger formats will pay off just as well.

by: Chintan Shah

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