Reliance Retail opens 9 ‘Fresh’ stores in NCR; targets 1 trillion in revenues

Reliance Retail juggernaut moved into National Capital region (NCR) today with the opening of nine ‘Fresh’ stores in Noida, Greater Noida, Gurgaon, Ghaziabad and Faridabad. NCR is one of the economically fastest growing geographical regions of the country. Within the next three months, Reliance wants to take the tally of these ‘Fresh’ stores to 100 in the Delhi- NCR region. Reliance is believed to have invested about Rs. 1,100 crore in this region.

Having launched the first cluster of its ‘Fresh’ stores on 3rd November, 2006, today’s launch takes the pan-India tally of Reliance ‘Fresh’ stores to 49, spread across Andhra Pradesh (21), Jaipur (7), Chennai (12), and NCR (9). Three of these stores in Andhra and 12 stores in Chennai were launched during the previous week. Thus, 24 ‘Fresh’ stores have been launched within a short span of one week only.

Reliance expects to launch 1,000 stores before the year end. Occupying an aggregate retail
space of about 1,10,00 square feet, these neighbourhood convenience format stores occupy an average retail space of over 2,200 square feet and offer quality horticulture, grocery and dairy products at competitive prices. Apart from catering to house hold customers, Reliance also makes supplies of these items at wholesale prices to push-cart vendors and small kirana merchants through its wholesale format “Rangers Farm.”

Having already bought 74 nos. land plots for about Rs. 2,000 crore, Reliance has so far invested about Rs. 3,000 crore or about 10% of the first phase planned outlay of Rs. 25, 000 to 30,000 crore on its retail initiative.

According to Reliance Retail, President and CEO (Operations and Strategy), Raghu Pillai, Reliance would open bigger format stores like hypermarkets, supermarkets and speciality stores during the April-June quarter.

Reliance Retail, he said, would earn Rs 1 trillion (Rs. 1 lakh crore) in revenues in the next five years. This excludes additional revenues from the “Rangers Farm” wholesale business operations. Reliance’s experiment with this wholesale format in Hyderabad has been working fine, added Pillai.

Shopper’s Stop Q3 grows 29% in revenues, 27% in operating profits

Shoppers’ Stop, the K Raheja owned, second biggest listed retailer in the country, has announced increase of 29% in Q3 gross revenues, up 59 crore from Rs. 204 crore to 263 crore, and of 16% in Q3 net profits, up 2 crore, from Rs. 12 crore to Rs. 14 crore, according to the quarterly financial results announced by the company. Q3 Operating Profit (Profit before interest, depreciation and tax) at Rs. 25 crore was 27% higher than Rs. 19.6 crore recorded in the corresponding period last year.

Q3 has been significant as it has in line with expectations has contributed 30% of projected annual sales, this year.

While, the margin of 31.5%, for the first nine months, is higher by 1.2%, the company has more importantly been able to contain shrinkage below 0.5%, lower than the international standards.

While, Shoppers’ Stop opened a new store in Lucknow in the third quarter, it has also added the Mothercare, Crossword and F&B format stores during the period.

Shopper’s Stop at the quarter end had a total of 87 stores/ doors comprising: Shoppers’ Stop (20), HomeStop (2), Mothercare (11), Crossword (41) and F&B outlets (13).

Pantaloon adds 8 lakh sq ft in Q3, sales jump by 60%

While, Q3 sales of Pantaloon Retail (India), the Kishore Biyani owned, biggest listed retailing company of India, jumped 60 per cent from Rs. 472 crore to Rs. 752 crore, the net profit increased from 18.6 crore to Rs. 43.9 crore against the same quarter of the previous year. However, net profit was inclusive of exceptional income of Rs. 18 crore received against diveastment of a part stake in one of its subsidiaries to a private equity fund.

While Pantaloon has added 8 lakh sq feet of retail space in Q3, it plans to add larger than this space in Q4.

What is of significance, however, is the fact that unlike most of its competitors, who have yet to make a beginning, Pantaloon has signed up a total retail space of about 27 million square feet.

While 8 million square feet of retail space is expected to go on stream by December, 2007, the entire 27 million square feet of space it has lined up is likely to become operational, within the next 3 to 4 years, by 2010-11.

Reliance juggernaut gaining momentum

The Rs. 25,000 crore, Reliance Retail juggernaut has begun gaining momentum.

Reliance, which began its journey in retail with the opening of a cluster of Reliance ’Fresh’  neighbourhood convenience stores in the state capital cities of Hyderabad and Jaipur, has opened 12 Fresh stores in Chennai on 24th January and has now begun moving to tier-II cities with the launch of seven stores in Andhra Pradesh on the 28th and the launch of nine stores today in the fast growing National Capital Region around Delhi.

The new Reliance ‘Fresh’ stores launched in Andhra Pradesh comprise four stores in Vijaywada and three in Guntur. Occupying an aggregate space of 17,000 sq. ft. each of the store on an average offers a retail space of over 2,300 sq.ft.

The nine stores in the NCR will be located in Gaziabad (4), Greater Noida (2), Noida (1), Faridabad (1) and Gurgaon (1).  These stores will occupy a retail space each of between 2,500 and 3,000 sq. ft. These stores are a part of the plan to open 22 stores in this region by the end of March of 2007. Reliance has set up two cold storage facilities at Kundli and Azadpur in Delhi of 1.75 lakh sq ft and 75,000 sq ft. respectively to service the needs of these stores.

All the new stores like other ‘Fresh’ stores will offer fresh fruits, vegetables, flowers, grocery and dairy products apart from a few staples under the Reliance’s private label of ‘Select.’ All the merchandise at these stores besides offering good quality will also be competitively priced.

All the new stores, as per the Reliance’s policy of according place of pride to its customers will be opened by the customers who first enter these stores.

Reliance is yet to begin its larger format speciality stores and hypermarkets. Three of such stores will be set up in East Delhi’s Star City Mall and Ghaziabad’s Shipra . and Jaipuria Mall, will follow in due course.

3 days of Maha Savings on something Vs. 365 days of savings on everything

This had to happen one day. And, well this has happened, sooner than expected. Retail sector like its FMCG counterpart, has begun witnessing media wars, albeit on a smaller scale.

We have earlier reported about the 3 day “Maha Savings” offer in which all 43 Big Bazaar format of hypermarket stores, owned by Pantaloon Retail, across the country, in an annual exercise, have offered extra discounts to its customers, particularly on aparrel and home appliances, between 26th and 28th January, 2007.

While, Big Bazaar’s offer is widely advertised and a lot of ‘word of mouth’ publicity has also been associated with the event, Subhiksha, the Chennai-based, discount retail chain, with over 500 convenience format stores in different parts of the country, has counterd this Big Bazaar offer in a directly hitting ad-campaign with a tagline “3 days of savings on something versus 365 days of savings on everything.”

The emphasis here is clearly on 3 days versus 365 days and something versus every thing. It may be recalled that Subhiksha besides offering 10% discount on all the FMCG products, including Medicines, also offers a widely publicised ‘every day low price’ scheme. The campaign apart from being published in the print media is currently being beamed across TV channels including the matches during the ongoing one day cricket series between India and West Indies.

This appears to be just the beginning of what could be the most exciting retail media wars between the warring retailing rivals.