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Retail set to receive more money muscle

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Big money is finding its way to fuel the retail revolution unfolding in the country.
Corporate retailers across the country have announced investments plans amounting to Rs 131,804 crore in past six months, for expanding their network of stores within the next four-five years.

The investment figure comes from ASSOCHAM Investment Meter (AIM), a study conducted by industry chamber ASSOCHAM. According to AIM, tracking investments during the period September 2007 to February 2008, the organised retail segment growing at an estimated 25 per cent is set to penetrate the tier II and III cities (including Pune and Chandigarh) as they are attracting the major share of investment announcements.

The study points out that real estate development for the organised retail sector has attracted maximum number of investment announcements, amounting to Rs 65,000 crore.
Food and grocery is the next big retail segment with investment plans of approximately Rs 22,100 crore.

Dwelling on individual companies, the study says that Reliance Retail has set aside Rs 24,000 crore for setting up hypermarts by the year 2010-11 in National Capital Region.
Spencer’s has also announced a capex of Rs 3,000 crore for expanding its retail outlet and setting up hypermarts in the next three years.

The study further says that Reliance Retail has announced an investment outlay of Rs 12,700 crore to set up grocery stores by next two-three years. The Aditya Birla group has also announced investment plan of Rs 8,000 crore to set up a chain of stores in the country in next three to five years.

During the past six months, Wadhawan Food Retail, Subhiksha and Dabur have made investment announcements worth Rs 1,500 crore, Rs 300 crore, and Rs 200 crore, respectively, in tier II and selected tier III cities, points out the report.

– Raja Ghoshal

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