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Reliance's retail initiative takes off in Hyderabad
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Saturday, 04 November, 2006, 08 : 00 AM [IST]
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Phani Raj, Hyderabad
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opening 4,000 stores in 1,500 cities across the country, Reliance Retail will emerge as India's Wal-Mart
Reliance Industries has set up its first retail outlet 'Reliance Fresh' in Hyderabad. This marks the beginning of the company's Rs 25,000-crore multi-format retail investment foray through its fully owned subsidiary 'Reliance Retail'. The store at the posh Banjara Hills is among a set of 11 pilot stores the company has opened in the city on November 3. Reliane Retail will be setting up close to 1,000 stores, most of them 2,000-5,000 sq ft, spread across major cities in 10 states by March 2007. The next phase will see outlets coming up in other major cities of Andhra Pradesh such as Visakhapatnam, Vijayawada and Guntur soon. Important metros such as Mumbai and Delhi will see 30-35 small-format stores being set by March. In all, the company will roll out 4,000 stores in 1,500 cities by the year 2010.
Reliance is gearing up to revolutionise the retailing industry in India. Towards this end, the company is aggressively working on introducing a pan-India network of retail outlets in multiple formats.
The first outlet also earmarks the introduction of 'Reliance Select', the company's packed staple food. The company plans to extend its private labels under this brand name across varied product categories including natural food, dairy products, water, tea, biscuits and other products.
The Reliance Fresh outlets are fresh food outlets that will also sell kitchen equipment and edibles. The company has planned to establish hyper markets, super markets, departmental stores, convenience stores, speciality stores and discount stores. It has proposed to set up outlets in the major cities of Gujarat, West Bengal, Punjab, Delhi and Maharashtra as next destinations in the coming months. These stores intend to provide fresh fruits and vegetables, staple foods and other products. The stores will operate in about 2000-5000 sq ft area range, according to Gunender Kapoor, chief executive, Reliance Retail Business.
Reliance Fresh will operate on a unique model, by which these stores will source vegetables and fruits from farmers through the company's proposed agri hubs and market them. Reliance Retail is expected to follow competitive pricing strategy in the initial phases of the launch of its retail stores. The company will pitch on value retail at this stage rather than lifestyle or premium retail. The initial launches will focus on price sensitive customers. These stores are surely expected to create further price wars in the segment.
Other Indian business groups including the Bharti Group and Aditya Birla Group plan to start retail chains soon. The Hyderabad-based Trinethra Super Retail, a Rs 240-crore retail company, which has about 150 stores at present, is likely to increase it to over 200 by the end of this fiscal by pumping in additional investments of up to Rs 100 crore. The choice of Hyderabad as the launch city is because it has an established retail presence, including the popular FoodWorld chain, besides some home-grown standalone stores like Trinetra and Hyderabad Central.
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