Reliance Retail

Reliance Retail, the Mukesh Ambani floated retail venture on Monday, aggrandized its national presence by launching nine new Reliance Fresh Stores in the National Capital Region in Noida, Greater Noida, Gaziabad, Faridabad and Gurgaon. The total number of retail outlets across the country has billowed to 50 covering 109,000 sq feet of retail space. However, the company is yet to open its first retail store in Delhi owing to several regulatory hassles. Reliance Industries has a 100% stake in Reliance Retail, and is looking at mushrooming 1000 new retail stores of 4000 sq feet by year end.

On December 5, 2006, the company acquired Gujarat-based Adani Retail for Rs 100-110 crore. Reliance will soon re-brand the 54 Adani Retail stores across nine cities in Gujarat to Reliance Fresh. The company is also in talks with Delhi based Super bazaar, Mumbai based Maratha stores, and according to some inconclusive sources, the south India based Subhiksha retail chain.

The company which has ventured into the food and grocery at present will be entering into the non food FMCG segment in a couple of months by launching categories such as laundry, personal care and apparel. It will start with multi brand retailing and then launch some private labels as well. In specialty formats it will start with consumer durables and has signed some deals with companies in China, besides Videocon in India.

The company faces competition from several players such as Bharti-Walmart, the AV Birla Group, Future Group, Tesco’s, Carrefour, Spencers, Subhiksha, Trinetra and food world. The Kishore Biyani-promoted retail chain Pantaloon, is also rolling out 40 stores in the national capital region by next June in over 18 formats.

Organised Retail is yet in an inchoative stage in India. India’s organised retail market is likely to grow from the current $4 billion to $64 billion by 2015. The first phase has been to provide customers with an innovative shopping experience by providing a better deal to customers. It is expected to restructure agriculture and small scale and medium scale manufacturing enterprises which suffers from gross inefficiencies. Organised Retail is faced with the challenge of increasing its top line by attracting customers with greater variety and lower costs, and at the same time increasing its bottom line by reducing the costs related to inefficiencies in the supply chain. Public investment in agriculture as a percentage of GDP has been gradually declining. Outdated machinery and poor infrastructure has let to wastages, losses in transit, and increased prices. The retail venture will thus usher in a revolution by promoting modern machinery, infrastructure thereby increasing productivity and jobs.