HUNGAMA READIES MUSIC STORE

Posted by Dr. Vishesh Rawat

Hungama, which thus far operated in the B2B space, mostly as a developer and publisher of mobile content such as ringtones, is launching an entertainment store with an iTunes-like business model. Hungama.com is in the beta stage currently with about two lakh content pieces across music, videos, ringtones, and wallpapers. It’s a subscription model — pay Rs 10 for a single download or Rs 99 for unlimited downloads a month. But the firm has the difficult task of initiating a mind shift change; from free illegal downloads to paying for stuff that is Digital Rights Management (DRM)-protected. Hungama says getting people to pay for legal downloads is possible because of multiple reasons. One, its site is ad-free at the moment and there wouldn’t be any unwarranted pop ups. Illegal download sites have multiple versions of the same content that creatres confusion and are less secure as well. Hungama.com’s content can be downloaded both on PCs and mobile phones. The firm, in a way, would compete with Nokia that in August launched its Music Store service in India. Nokia’s store has over 3 million international, Bollywood, and regional soundtracks across 20 genres. Hungama has Bollywood and regional music content but no international labels as of yet.

AT MALLS, LUXURY STILL TO COME OF AGE

Posted by Dr. Vishesh Rawat

The onset of the long festive season and improving consumer sentiment has brought some cheer to malls and retail stores. For the luxury market, however, there is no succour. India has only three large format luxury malls -- that exceed 2 lakh sq ft of retail space -- UB City in Bangalore, DLF Emporio and Select City Walk in Delhi. Another luxury mall project called Bergamo by KKA Buildtech is scheduled to open in Chennai in June 2010 and is more on the lines of a luxury shopping complex of about 40,000 sq ft. Mumbai's first luxury mall -- Palladium, at High Street Phoenix -- is starting operations on September 26,6 months behind the original plan to launch in March, and that too with only 20% operational capacity. "It took longer than expected," said Gayatri Ruia, business development director, Palladium at High Street Phoenix. "There was a business plan to be met -- in terms of rates, correct mix of retailers, etc." Palladium has 4.5 lakh sq ft mall space, in addition to 3 lakh sq ft of car park. The mall will be 50% operational by November and 100% operational by February. Analysts say the luxury market in India is at a very nascent stage with a lot of entry barriers for retailers and malls, but that there definitely is potential. "There is a high-class community but there also is a lot of brand consciousness slowly emerging in the young earning consumers. In Delhi or other metros, A-list consumers know their Gucci and Louis Vuitton well. The luxury and super-luxury market may be very small currently but most of the malls that are coming up now are for a long term and definitely have a future," an industry analyst said. Ruia concurs. "The luxury market has little depth in it. But we are here for longevity. This mall will be here and a leader in its segment for the next 15 years at least so there's no worry for us," she said. Palladium, for example, will not break even until four years. But Ruia said one has to take calculated risks. "The retail and real estate sectors are emerging and also have risks involved. If you are a serious player, you have to take calculated risks," she said. The concept of luxury malls is fairly new. When Select City Walk started leasing space to retailers in 2005, not many super luxury brands were keen on entering the mall. "The super luxury brands were placed in the five star hotel lobbies, they were not keen to come to out mall then. As a result, most of our retailers are semi-luxury brands like Mango, Esprit, GAS, Calvin Klein," said Yograj Arora, director, Select Infrastructure. DLF's Emporio Mall came up later, in 2008-09, by when the super luxury brands were looking at malls. However, common to other malls, the slowdown has forced luxury malls to lower rentals or opt for revenue-share model. Select City Walk has rolled out a revenue-share model with certain retailers. Palladium will also look at this model, Ruia said.

RAYMOND PLANS TO SELL STAKE IN APPAREL, ENGG ARMS TO PE COS

Posted by Dr. Vishesh Rawat

Raymond is planning to sell stakes in its apparel and engineering subsidiaries to private equity (PE) funds to unlock value, according to Gautam Singhania, chairman and managing director of the 84-year-old textile company. “Talks with PE funds will be initiated at the appropriate time,” Singhania said. He declined to comment about expected valuations, stake to be offloaded and other details. Raymond Apparel, the company’s wholly-owned subsidiary that owns brands, such as Manzoni, Park Avenue, Parx and ColorPlus, has an annual revenue of Rs 350 crore. Engineering subsidiary JK Files & Tools, which was hived off into a separate company last month, has a turnover of Rs 225 crore. Proceeds from the proposed equity sale will be used to fund expansion plans of the two subsidiaries. Raymond Apparel plans to set up 88 small-format stores in the next one year, a company official said. It is also looking at repositioning the operations of its ColorPlus brand. Raymond, which is working on a restructuring plan to boost revenues and nudge back to profits, is also exploring the possibility of combining garmenting business with the flagship textile business. “This is too early. But it may be a possibility,” Singhania said.

RETAIL RENTALS CONTINUE TO FALL

Posted By Dr. Vishesh Rawat

Retail rentals across metros corrected by about 10 percent in the first half of 2009 compared with the second half of 2008. The drop could be as high as 40 percent in many locations when seen in the context of rentals in the first half of 2008, said a CB Ellis retail market review for the first half of this calendar. The report said retailers were also renegotiating rentals to make their operations viable and many developers had a renewed stance on revenue sharing agreements, unlike earlier when demand was favourable. Anshuman Magazine, Chairman and Managing Director, CB Richard Ellis, South Asia, said, “India is one of the fastest growing retail markets in Asia-Pacific. “Due to the current global economic recession and slowdown in the Indian economy, retail rentals across key markets did witness a fall as compared to the same time last year. “However, I expect the long term growth to stay on track.”

ORGANISED RETAILERS BULLISH ON DIWALI SALES

Posted by Dr. Vishesh Rawat

Players in the Rs 40,000-crore organised retail industry are expecting a revival of fortunes this Diwali, thanks to their new marketing initiatives and improved consumer sentiment in recent months. Most retailers hope footfalls to increase 50 percent during Diwali compared to last year. Retailers are also hoping for an increase of 20 percent to 25 percent in business at premium malls during the festive season. This year, retailers like Westside, Shoppers Stop, Pantaloon and Lifestyle have seen an average monthly footfall of 50,000.
Future Group’s retail arm, Pantaloon Retail India, has associated with Remanika Fashion Apparels to launch new consumer promotions for Diwali. Jalaj Kakkar, chief executive officer, Remanika Fashion Apparels, said, “Gifts are assured for consumers who make purchases worth Rs 3,000 to Rs 4,000. At every Remanika store, as well as in our shop-in-shop formats, we plan to issue gift vouchers worth Rs 400 on purchase of apparels worth Rs 2,000. The promotions will be spread across eight exclusive stores, 22 Shoppers Stop outlets, 30 Pantaloon, 16 Lifestyle, 12 Central and 8 Reliance Trends outlets. At Remanika exclusive stores, on the purchase of three garments from our new merchandise range, customers will get merchandise from the last season free.”
According to Virendra Ghole, head, marketing, Monginis Foods, “Since health conscious Indians are moving away from consuming mithais, we are introducing cookies and chocolates.” Monginis hopes to achieve a 25 percent sales growth this Diwali compared to the same period last year.
Ghole adds that with real estate prices diving, the company is able to accelerate the pace of new store launches. By the end of the current fiscal, it hopes to increase number of exclusive Monginis stores from 440 to 600.
@home by Nilkamal will offer gifts to customers on the purchase of goods worth over Rs 2,500. Manish Parekh, director, @home, said, “With new offers, we hope to witness actual sales conversion this Diwali.”
Treasure — The Jewellery Lounge will offer discounts on jewelleries — up to 30 percent on diamonds, 40 percent on kundan and 50 percent on uncut diamonds — between September 25 and October 31, targeted at Navratri, Dussera and Diwali shoppers.
According to Bineet Bhatt, chief operating officer, Treasure - The Jewellery Lounge, “We have entered into co-branded strategic tie-ups with nine brands in India which includes Yash Birla Group Company Evolve Medspa, Enrich, Flag restaurants, Florista, Great Escape Water Park, Pagli, Power House Gym, Puresin chocolates and Stylekist. Consumers buying jewellery worth Rs 5,000 will get gift vouchers from any of the nine brands.”
Sales suffered last Diwali season largely because of the liquidity crunch, in line with the situation across global markets.
According to some estimates, sales had dived as much as 40 percent in the run up to Diwali last year. Obviously, retailers are leaving nothing to chance this year.

Reliance digital to introduce private label

Posted by Dr. Vishesh Rawat

Reliance Digital, a unit of Reliance Retail Ltd, is planning to introduce private labels and will target nearly 150 large format retail stores over the next three years.
“Categories like small home appliances, memory cards, etc., where the degree of commoditization is high...people are not bothered about the brand,” chief executive officer Anil Baijal said.
While retailers generally have private labels for categories such as apparel, footwear and consumer goods, not many have them for consumer electronics and durables.
By December, Reliance Digital plans to launch another four-five stand-alone large format stores.

BHARTI WAL-MART'S CSR BEGINS IN AMRITSAR

Bharti Wal-Mart has provided 10 pushcarts to the unemployed and economically disadvantaged from rural areas located near its cash-and-carry store, Best Price Modern Wholesale, in Amritsar today.
Posted by Dr. Vishesh rawat

The pushcart owners, now holding legitimate businesses, have been signed up as members of Best Price Modern Wholesale, to enable them to procure fresh produce at best prices and pass on these benefits to their customers.
In keeping with its strong commitment to sustainable development, Bharti Wal-Mart joined hands with Coca-Cola India to undertake a plantation drive in and around Best Price Modern Wholesale store as part of their drive to plant over 2,000 saplings in Amritsar.
This initiative also rolls out Bharti Wal-Mart’s project, in partnership with the Amritsar Municipal Corporation, to adopt and manage the road stretch from Taranwala Bridge up to the end point of Amritsar Municipal Corporation.

Rental Vs Revenue sharing

Written and Posted by Dr. Vishesh Rawat

As the corporate houses – the Piramals, the Tatas, the Birlas, the Ambanis, the Rahejas, the Mittals, the Biyanis, the Goenkas, and mega foreign retailers- Walmart, Carrefour, Tesco and Landmark Group race to revolutionize the retailing sector, retail as an industry in India is coming alive. However current global and Indian economic scenario has brought a caution in supersonic expansion (Reliance’s slogan of one store a day) and operations of new stores in last couple of years. With shutters coming down on non profitable stores of many major retail chains, the initial euphoria in retail is settled now and the retailers have become more pragmatic in their approach. To survive and grow retailers are now looking for different cost cutting measures including staff reduction, salary cuts, spending less on ads and rationalizing the real estate rentals. However in last one year rents have gone down 30-50% on an average, still retailers are finding it difficult to sustain on these rentals and now try to get revenue sharing deals with the developers.
In retail real estate “Rent vs Revenue share” is one of the most frequently debated aspect, Proponents of both ideas have their own unique reasons. According to mall developers they invest huge money in developing shopping malls so they need to raise funds by selling the units for developing the project and once sold to investor’s mall have no right to give it to retailers on revenue sharing. Due to high construction cost and very expensive land the retail real estate is pretty costly. Most of the retailers have yet to establish themselves as a totally professional outfit with transparency in sales and accounting processes to inculcate faith in the mall owners. Mall owners/investors have no experience of retail so it’s difficult for them to have faith in the format of the retailers; most of the retailers are comparatively new and don’t have long and successful track record of retailing profitably in Indian markets. Why revenue sharing with mall owners, do retailers has a revenue share arrangement with their suppliers or warehouses, do multiplex operators do revenue share with producers/distributers? Mall owners allege that this is only an arm-twisting gimmick of the retailers and retailers are into profits or losses mainly due to their business format and operations, why the mall owners should have a stake in profit or loss of the retailers.
On the other hand retailers feel that they are paying 12-15% of sales as rentals in India compared to 2-3 % of sales in western countries. Such a high rental makes the entire retailing a loss making preposition. It is very important that the developer do not abandon the project after constructing and selling the mall, they must take the responsibility of running the mall efficiently by proper promotions, events and management of the assets. A stake of the developer in sales of the retailers in the mall will make them more responsible and participative in mall management and the mall will continuously strive to increase footfalls and conversion into sales. Revenue sharing model will help the retailers in expanding at lower risk of fixed costs as the rent will be directly relate to the sales of the store.
Both parties have some valid and logical points and for the sake of the retail industry they need to work together to create synergy. As per AT Kearney’s 2009 global retail development index, India’s largely un-modernized retail sector remain attractive to both domestic and international retailers, in spite of government regulations that prevent 100 per cent foreign ownership of retail stores. Lots of potential is there to grow for both stakeholders.

AADHAAR LOOKS TO MAKE PROFIT, OPEN 200 STORES

Posted by Dr. Vishesh Rawat

Aadhaar, the rural market-focussed 70:30 joint venture (JV) between the Future Group's Future Ventures India and Godrej Agrovet, hopes to turn around and starts making profits, by 2011.
Aadhaar, a modern retail chain operating in semi-urban and rural markets, has opened around 70 outlets across the country. The chain has mapped out an expansion plan of around 200 stores to be achieved over a period of time and therefore needs to balance the strain of losses from new outlets against the profits from older outlets as it expands in rural India.
The retail chain targets to leverage the Godrej's brand franchise with consumers in these markets and Future's expertise in the retail business.
"We have been steadily expanding the chain under its new chief executive officer Saurabh Chaddha as 3,000-sq-ft format stores.
On an average, each outlet takes around two to three years to become profitable," said a top Godrej official in charge of the group's retail interests.
Damodar Mall, group customer director, Future Group said that the group has reconfigured the format to meet consumer needs. "To do this, we have also changed the look and feel of the store," he said.
In the restructured format, the stores now sport the strengths of the JV's promoters by way of `The World of Godrej' section and `Big Bazaar Best Deals'. While the former offers a selection of products from the Godrej Group ranging from furniture, locks, white goods and its fastmoving consumer goods (FMCG) range, the latter section offers a selection of fashion and general merchandise selected from Big Bazaar outlets.

EXPLORING NICHE CONCEPTS IN RETAIL

Posted by Dr. Vishesh Rawat

The retail sector was poised to be a sunrise industry with a large number of corporate groups and multinationals entering the country. B-schools had launched several courses in retail management, including in subjects like supply chain management (SCM), anticipating a boom in the sector. That's when the slowdown brought the sector down along with some dreams.
The SCM industry goes hand-in-hand with the retail and manufacturing sectors. The benefits of SCM were recognised by the global corporate groups much earlier, though the concept is still nascent in India. However, the challenges unleashed by globalisation and the competitiveness of the Indian industry has brought about the need to recognise the importance of the industry.
According to Ansuhman Singh, CEO, Future Logistics, the industry is picking up pace in India. "The importance of this industry is evident in every sphere of manufacturing -- right from storage of raw materials, work-in-process inventory and transporting finished goods from point of origin to the point of consumption."
SCM courses are offered at a number of colleges as a postgraduate diploma. Most institutes offer SCM as a paper within the curriculum of retail management or operational management and there are institutes offering full-fledged courses on the subject (see box).

EXPLORING NICHE CONCEPTS IN RETAIL

Posted by Dr. Vishesh Rawat

The retail sector was poised to be a sunrise industry with a large number of corporate groups and multinationals entering the country. B-schools had launched several courses in retail management, including in subjects like supply chain management (SCM), anticipating a boom in the sector. That's when the slowdown brought the sector down along with some dreams.
The SCM industry goes hand-in-hand with the retail and manufacturing sectors. The benefits of SCM were recognised by the global corporate groups much earlier, though the concept is still nascent in India. However, the challenges unleashed by globalisation and the competitiveness of the Indian industry has brought about the need to recognise the importance of the industry.
According to Ansuhman Singh, CEO, Future Logistics, the industry is picking up pace in India. "The importance of this industry is evident in every sphere of manufacturing -- right from storage of raw materials, work-in-process inventory and transporting finished goods from point of origin to the point of consumption."
SCM courses are offered at a number of colleges as a postgraduate diploma. Most institutes offer SCM as a paper within the curriculum of retail management or operational management and there are institutes offering full-fledged courses on the subject (see box).

INDIA CAN SUSTAIN AT LEAST 6-7 RETAIL PLAYERS IN THE LONG RUN

Posted By Dr. Vishesh Rawat

India should be able to accommodate at least 6-7 big retail players, considering that the country's organised retail market is likely to grow to USD 100 billion in the next 3-4 years, Bharti Enterprises Vice-Chairman Rajan Mittal said on Sunday.
"The retail market is projected to be about USD 500 billion in another 3-4 years, and if organised retail has to pick up 20 per cent of that you are talking about USD 100 billion between a few players," Mittal said.
"India has sustainability for few players... Difficult for me to suggest... I think 6-7 players, if not more," he added, saying that "co-existence" will happen like one sees in international markets where you see many players.
Mittal, who focuses on the group's Bharti Retail business, said that organised retail in the country was just about 4-5 per cent and it is yet to expand and take shape.
Bharti Retail commenced operations last year and is looking at opening 40 new stores, called 'easyday' by December, in the National Capital Region. It already has around 30 stores, mainly in Punjab and Haryana.
Mittal said over the next 5-6 years, the company is looking at USD one billion in revenues, with 10 million square feet of retail area.
Bharti is also opening a second cash-and-carry (wholesale) store, a joint venture business with the world's largest retailer and US-based Wal-Mart, in Punjab.

SET FLOOR SPACE NORM FOR RETAIL FDI

Posted By Dr. Vishesh Rawat

Bharti Enterprises will invest $2 billion (around Rs 10,000 crore) and employ 60,000 people in their retail sector units by 2016.
It will also open 6-10 cash-and-carry outlets in the coming two years including a new one by December, the company’s Vice-Chairman and Managing Director, Rajan Bharti Mittal, said.
Mittal, leading the retail, cash and carry and realty business of the Bharti Group, said Bharti would start 70 retail stores by December.
Though Bharti has interests in realty, Mittal said, “Our retail units won’t depend entirely on our realty operations for commercial space. We will also partner other realty firms for our retail ventures.”
Mittal, currently the Senior Vice-President of FICCI and former Chairman of FICCI’s Retail Committee, told Business Line recently in an exclusive interview in Istanbul that instead of placing a blanket ban on organised and multi-brand retail, if the Government wants, it can put a minimum shop area ceiling of 2,000 sq ft for big companies entering modern organised multi-brand retailing.
The Government can also frame rules that Foreign Direct Investment in multi-brand will not be allowed for retailers operating from less than 2,000 sq ft units, he said, adding this will ensure that operations of big players do not in any manner overlap with that of small ‘kirana’ stores.
“But it is not right to totally ban FDI in multi-brand retail. There are big chains like Carrefour in countries with no FDI curbs, but in those places there are small retailers too,” Mittal said.
The Government, however, is going slow on permitting FDI in multi-brand retail owing to political sensitivities. However, FDI of up to 51 per cent is allowed in single-brand retail. Recently, a Parliamentary Standing Committee had mooted a ban on FDI in retail. The committee also said entry of big Indian firms and MNCs in retail would force small stores (numbering over a crore) to close shop, that would, in turn, result in unemployment.
Claiming that there was no overlap in operations of big retailers and that of small stores, Mittal said while a ‘kirana’ store operates from a 500-800 sq ft area shop with around 500-600 SKUs (stock keeping units), big retailers are looking at shops where each would have over 2000 sq ft in area holding about 3000 SKUs. Sourcing hub
Opening the retail sector would make India a major sourcing hub for retail biggies such as Wal-Mart, he said. Currently, while the American giant buys $20 billion worth goods from China every year, it sources items only amounting $600 million annually from India. Besides, SMEs and farmers selling their goods to big retailers would get a better price, in turn strengthening India’s manufacturing and farm sectors, he said, adding that big retailers will also ensure better cold chain facilities.
Also, consumers get cheaper and good quality items in big stores. ‘Kirana’ stores can cut costs, because instead of going to about 30 distributors to source their 500-700 items, they can get quality items from any one cash-and-carry outlet at a cheaper rate.

RETAIL GROWTH SET TO DOUBLE TO 10% IN ’09

Posted By Dr. Vishesh Rawat

Armed with insights into the consumer’s buying behaviour, learnings from the past and a growth projection of 8-10%, 2009 is expected to be the defining period for the Indian retail industry.
“Though the Indian retail industry has learnt a lot over the past few years, 2009 will be the defining year for all as there will be opportunities galore,’’ said B S Nagesh, V-C, Shopper’s Stop, at the India Retail Forum.
The growth in retail is expected to scale up to 8-10% from the current 4%. Nagesh said retailers would see a tremendous growth and profit this year than they have in the past. “Indian consumers are the biggest scope for growth for the Indian retailers. However, it is up to the retailers to make the best of the opportunities available and those who do not latch on to them right now will miss the boat,’’ said Nagesh.
Kishore Biyani, CEO, Future Group—which plans to raise Rs 1,000 crore by selling some non-core retail assets in addition to launching an IPO for Future Ventures in March 2010—shared insights on value creation and emphasised the need to create stimulus to increase consumption.

India's second retail revolution?

Posted by Dr. Vishesh rawat

Is India finally ready to defer or even give up indulgence ownership? It would seem that way, going by two high-profile developments in the retail sector over the past month.
At two opposite ends of the price spectrum, savvy businessmen introduced ideas that took their respective target markets several steps closer to their heart's desire. You don't get to own it, mind you-but who cares when you get to flaunt it?
At the lower end of the line was denim major Levi's. In the first scheme of its kind, the brand introduced jeans on EMIs. The pilot project, which rolled out in Bangalore in early August, allows consumers to pay for garments priced Rs 1,500 (and above) over three monthly instalments of Rs 500 (or above) through their credit cards.
The target market, according to company sources, is the section that buys unbranded jeans, usually priced at Rs 500 or less. The logic is clear: If the consumer needs to place on the table the amount he would normally pay for an item of clothing, he will not mind paying that sum twice again over a period of time if it buys him an aspirational item.
By all accounts, the experiment has been a success: The company is looking to go national with the scheme in the near future.
The same logic is twisted a bit for Bagsutra. Very high-end, very exclusive and very secretive, this is India's first bag-rental service. For Rs 10,000 in annual membership fees, you have access to 52 bags a year, at a cost of Rs 1,000-2,000 per bag.
That is not to imply anyone with a spare 10 grand can avail of the service: Membership is by invitation only, prospective sign-ups are screened and need to be recommended by an existing member. The service-available online at www.bagsutra.com is so paranoid about not revealing details that it's still not clear who actually runs the show.
Oh and the bags? The service assures us that they only stock the hippest international labels, from Bottega Veneta and Chanel to Tod's and Zac Posen.
Off-the-rack prices for these premium designer labels-all the bags are guaranteed to be genuine-start at above Rs 50,000. So the fees work out to be quite reasonable should you be a regular at red-carpet premieres and high-society parties. So far available only in Mumbai [ Images ], the service plans to be available in Delhi [ Images ] soon.
While the Bagsutra model is a photocopy of popular American businesses like From Bags to Riches and Bag, Borrow or Steal (both of them several years old), the Levis' scheme could actually be interpreted as an honest-to-goodness Indian take on a global trend.
They indicate that the Indian consumer, inured to the concept of mortgage and monthly instalments through big-ticket items like houses and cars, is ready to expand the buy-now-pay-later philosophy to indulgences, rather than restricting it to a few items. In two separate online polls, more than 30 per cent respondents said they would have no issues spending good money to get a trendy bag they would return after use.
If immediate ownership actually ceases to be the mark of success, it could trigger a second retail revolution, this time focused on the higher end of the market. With time, rent-a-Rohit Bal lehenga or borrow-a-Valaya sherwani could become the norm, shorn of the furtiveness currently associated with luxury rentals.
As a certain section of Indian society fine-tunes its predilection for conspicuous consumption, this could well turn out to the cost-effective solution everyone was looking for in a changed economic scenario.
And if your best friend turns up at a wedding reception in a designer outfit you wore two weeks ago, you'll be gracious enough only to comment on how beautiful she looks, please.

Birla Retail hopes to make profit by FY 13

Posted by Dr. Vishesh Rawat

Aditya Birla Retail, which runs the More brand supermarket and hypermarket stores, expects to start making profits in the next three
years. If so, it could be the first Indian retail major to come out of the red by FY13. In a retail environment where big players have been witnessing a degrowth, ABRL has seen fairly robust single-digit growth in the past six months. “We have grown around 3-4% month-on-month since March and will probably be the first player in this space (read organised national retail) to break even. We expect the south zone to break even this fiscal and the two formats to break even by next fiscal,” CEO of ABRL, Thomas Varghese, said. ABRL kicked off retail play with the acquisition of Hyderabad-based Trinethra Super Retail and Fabmall in 2007. The chain is now putting in place an optimisation strategy to boost returns and for effective use of available real estate. It will nearly double the number of stock keeping units (SKUs) per square ft, from 1.25 SKUs to 2 SKUs per sq ft. Increasing the rack heights is one of the options to achieve this. This will give the customer access to more brands over the same shelf space. “We have realised that sales turnover from a 2,000 sq ft store can be increased to match that from a 3,500 sq ft store. We will roll out this plan in 160 stores in the next 6-8 months,” Mr Varghese said. The Rs 1,130 crore ABRL operates 642 stores across 12 states and had shut down over 100 non-viable stores. The company is negotiating new store launches at nearly half the rent targeting a rent-to-revenue ratio of under 5%. More’s hypermarket outlets (60, 000-70, 000 sq ft) are coming up in rapid succession in Mumbai, Mysore, Aurangabad, Indore and now Bangalore. The company plans to have eight hypermarkets and 700 supermarkets by fiscal. Besides everyday low prices, it has differentiated its presence in the hypermarket space by toning down visual merchandising in Aurangabad as home visits with potential customers revealed that they were intimidated by hypermarkets and offering free parking in Bangalore. “The response from recent openings in Indore and Aurangabad have given us the confidence that ABRL can have a profitable play in hypermarkets if it is tuned to the customer needs,” he added. Its strong private label business currently at around 18-19% with over 300 products is also aiding margins.