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Bharti Retail to explore South India soon
By siliconindia
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Friday, 21 May 2010, 15:44 IST |
2 Comments
Mumbai: In order to become a national retailer, Sunil Mittal's Bharti Retail is planning to roll out stores in South India. Bharti Retail already has three to four properties in the southern states and by the year end, they were looking at booking spaces for around 50 stores, reports Raghavendra Kamath from Business Standard.
The chain has hired people to search and book properties in Western and Central India. In February 2007, when Bharti announced the foray into retail, it talked about investment of $2-2.5 billion by 2015 and $5 billion in revenues. "Bharti Retail has announced plans to increase the number of retail stores to about 140 across India by end of this year and in support of this plan, we are sourcing real estate, pan-India," said a Bharti Retail spokesperson.
Bharti Walmart, the joint venture between Bharti Enterprises and Walmart is also expected to open cash and carry stores in the South in the next 12-24 months. The chain wanted to expand its presence in the northern region before entering any other region and in contrast to this strategy, Reliance Retail and Aditya Birla have launched their operations from the South and expanded in other parts.
"Southern cities such as Bangalore and Chennai offer reasonable retail rents compared to other cities and limited supply. South offers quality real estate at affordable rents," said Susil Dungarwal, founder of Beyond Squarefeet, a mall advisory firm.
Currently, Bharti has a total of 70 stores, including 64 Easy Day stores and six Easy Day Market stores, in Punjab, Haryana, UP, Rajasthan, among others. The retailer recently appointed former Hypercity CEO Andrew Levermore as its Chief Operating Officer to head operations.
According to retail consultants, Bharti Retail will have to face challenges in scaling up in South as it already has a established retail market with the presence of majors such as Spencer's, Aditya Birla, Reliance Retail, Nilgiris, among others.
According to estimates, India has a total retail market of $385 billion and organised retail accounts for five per cent of that. The share of modern trade is expected to touch 14 percent by 2013. The penetration of modern trade is expected to reach 25-30 percent in the South, compared to five percent in other parts of the country.