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Scenery: July 14-19

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The business of retail, in the week gone by, was quite similar to those peace marathons that are organised by telecom companies. Marathons where celebrities, top businessmen, housewives, kids and laymen aspiring for some fame, along with the professional athletes (expected winners) from foreign countries, run on the same temporary track. In the race, there are some who actually run, a few who walk or simply talk, and some who lose stamina and rest on the sidewalk.

Likewise, the past week in retail saw some majors discussing plans of expansion, some opening new shops, some introducing thoughtful concepts, and some who shut shop.

Initiative for kirana:

Traditional retailers have been in talks on three of the last six days. On July 14, Confederation of All India Traders (CAIT) issued a media release claiming that the traditional retailers in the country are in favour of converting into a modern format and expect the government to pave the way for modernisation by providing financial assistance and rationalising the tax structure.

Although the government did not announce much on the financial part, ICICI Bank on July 17 announced that it will increase its funding for the small retailers. The bank said that providing banking facilities and credit line to traditional or unorganised retailers in the country remains one of the major focus areas for ICICI Bank this year.

V Vaidyanathan, executive director of ICICI Bank, said, “A significant portion of the ICICI Bank credit goes to the unorganised segment, with total exposure amounting to Rs 10,000 crore. Till date, over one million accounts have been opened across India, mainly for the small-time shoppers, kiranas and small enterprises.”

Metro Cash & Carry was another party who showed interest in kiranas. On July 18, the group announced that it will open its first outlet in Kolkata. Announcing plans, Erik Schmit, director (development and expansion) of Metro Cash & Carry India, said: “Our homework shows Kolkata has over 250,000 kirana stores, and that gives us the confidence to roll out a few more outlets in this city. Besides hotels, restaurants and caterers, kirana stores constitute our core clientele.”

New ones:

Reliance Retail, following its pan-India expansion strategy, announced openings of two of its large formats – Reliance Digital at West End Mall in Ludhiana, Punjab, and Reliance Footprint, in Mangalore, Karnataka.

Vimal, a Reliance brand, opened a factory outlet in Nagpur on July 15. The brand’s first factory outlet was opened in Ahmedabad earlier this month.

July 17 saw the opening of Metro Shoes’ fifth store in Bengaluru. Located at Aejaz Avenue in Jayanagar, this is the company’s 75th outlet in the country.

Happy, and on expansion spree:

The ‘200 stores’ mark looked popular this week as Titan Industries Limited, as a part of its national expansion plans for Titan Eye+, said that it will set up over 200 Titan Eye+ outlets in the next three years. Similarly, Indo Rama Retail Holdings, the company that operates Office1Superstore retail outlets, announced plans to open around 200 stores across the country over the next three years.

Chennai-based jewellery retailer Prince Jewellery has planned to strengthen its position in the country’s retail market by expanding in various cities including Kochi, Thiruvananthapuram, Bengaluru and Tiruchi.

On July 17, Future Group said that its decision to retail insurance policies through modern retail outlets and malls is reaping huge benefits as the company is successfully tapping the potential insurance customers there.

“By introducing insurance products to customers who are visiting shopping malls and modern retail outlets, we have been able to acquire a significant number of individuals who had never bought an insurance product before,” Future Group CEO Kishore Biyani said.

Discussing plans to create a mass-market product, Rajiv Merchant, CEO of Portico, said that discount chains and low-cost hypermarkets are doing well and indicate the potential in a mass product. Thus, the company is planning to launch products for the masses and confirmed that these products will not be of low value.

Sad and closing:

Oswal Retail, a subsidiary of Punjab-based Oswal Group, has decided to shut down all outlets of ‘Straps’ as it plans to wind up its innerwear business.

Announcing this, Adish Oswal, managing director, Oswal Retail, said, “We have decided to close all our outlets, and it is a strategic decision taken by the company.” In all, the company had opened 22 stores under the brand name ‘Straps’, in several locations including Delhi, Ludhiana and Gurgaon.

The company had previously planned an investment of around Rs 60 crore in this venture, and was scheduled to open 120 exclusive stores by 2009.

Citing losses on account of under-recoveries on sale of petrol and diesel, the ministry of petroleum and natural gas, government of India, has asked the oil marketing companies (OMC) to hold their plans of launching new retail outlets for the next two years.

The companies that were asked to stop their expansions include Indian Oil Corporation, Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited and the Mangalore Refineries and Petrochemicals Limited.

Spencer’s special:

Spencer’s Retail, part of RPG Group, announced that it has tied up with US-based bakery and café chain ‘Au Bon Pain’, to set up the latter’s outlets in India.

Au Bon Pain, a dining and bakery chain, has over 200 outlets in various countries including the United States, South Korea, Taiwan and Thailand.

Spencer’s is also expected to announce two more joint ventures with international fashion brands over the next two months.

Announcing this, Samar Sheikhawat, vice president, marketing, Spencer’s Retail, said: “The joint ventures, one to be announced in August and the next in September, will help expand Spencer’s higher-margin non-food offerings in hypermarkets and augment our fashion business model.”

Speaking about their business, Sheikhawat said, “Food gets in the traffic, it gets the topline, the revenues, it doesn’t get the bottomline. Fashion and home get you the bottomline, so you need to sell a whole lot of food, but you also need to sell a whole lot of fashion and home.”

Spaced out:

The Chhatrapati Shivaji Airport in Mumbai will soon be counted amongst the prime luxury retail spaces in the country as the airport authority has proposed to develop around 132 acres of luxury retail, commerce and hospitality space in the airport premises.

According to the authorities, in recent years the number of tourists visiting Mumbai has increased, and this increase has called for an improvement in facilities, hotel accommodation and entertainment, especially around the airport area, which is the focal point of Mumbai’s tourism.

– By Ranjan Kaplish

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