Reliance Retail is expanding its network of Smart Bazaar stores in small towns
Reliance Retail is expanding its Smart Bazaar stores in towns with a population of up to 50,000 in order to meet the increasing demand. In an interview, the CEO of Reliance Retail (value format) named Damodar Mall stated that the growth of consumers in smaller towns, also known as feeder markets, is more interesting. According to him, there are no signs of any decrease in discretionary spending in modern stores or on digital apps. The opinion of some players that non-food products are not growing is not a macro consumer concern, but it may indicate that these players are not updating their operating models.
In the retail unit of Reliance Industries, discretionary spending has not been under pressure lately, despite the views of some retailers and analysts. Home, personal care, and general merchandise are all growing faster than the overall store, with feeder markets in smaller towns such as Nokha, Sikar in Rajasthan, Armoor and Banswada in Telangana, and Raygada and Simliguda in Odisha showing upbeat demand trends. Reliance Retail is the largest grocery retailer in the country and operates stores in multiple formats, including Smart Superstore, Smart Point, Smart Bazaar, Fresh Signature, Freshpik, and 7-Eleven.
Demand in rural markets for FMCG products has been soft for multiple reasons. One of the main contributing factors is persistent inflation, which has impacted rural demand significantly. As a result, consumers are still tightening their discretionary spending after uneven rains. To grow in tune with the market, FMCG companies facing a slowdown in modern trade may need to do more to upgrade across categories. Reliance Retail has been driving sales of its FMCG products, such as soft drinks under the Sosyo Hajoori brand, confectionaries under Lotus Chocolates, biscuits under Maliban, Campa Cola, Glimmer beauty soaps, Get Real natural soaps, Puric hygiene soaps, Dozo dish wash bars and liquids, HomeGuard toilet and floor cleaners, and Enzo laundry detergent powder, liquid, and bars.
We don't follow the conventional approach of private or white labeling. Our customers choose SnacTac snacks or besan laddoo because they are good products, and many of them don't even realize that SnacTac is our brand. In the second quarter, Reliance Retail's grocery segment experienced a 33% yearly growth, with Smart and Smart Bazaar formats leading the way. The company emphasized that demand remained strong during the festivals in the quarter. In the June quarter this year, the grocery business witnessed a year-on-year growth of 59%. Leading FMCG makers like HUL, ITC, and Nestle have expressed their concern over uneven rains, the impact on crop output, and the rising prices of commodities such as wheat, maida, sugar, potato, and coffee in their September quarter earnings. These companies are learning to consider premiumization differently for urban, modern trade, and rural consumers.
