Stay abreast of the fast moving economic super-power — India!
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Stay abreast of the fast moving economic super-power — India!
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Retail News July 2007 |
Tata Group to foray into food retail
July 5, 2007
After Reliance Industries and the Aditya Birla Group, the Tata Group is poised to become the next big name to feast on the burgeoning food retail sector.
The group, which has just announced its entry into processed foods with the acquisition of 70 per cent stake in Innovative Foods from the Amalgam Group, may soon sell a bouquet of food products, including fruit and vegetables and baked food, through a chain of retail stores.
Residency Foods and Beverages – a subsidiary of the Tata Group’s hotel arm, Indian Hotels Company – which is the vehicle for acquiring the Innovative Foods stake, last year bought 80 per cent equity in Kochi-based seafood exporter Amalgam Foods and Beverages.
Residency has already entered into an agreement with Jasper Aqua Exports, a Vizag-based seafood company, which will manufacture products exclusively for the Tata company’s product portfolio.
The Tata Group is said to be eyeing the food retailing opportunity for the last three years under the Trent name. According to sources, it has been planning to buy a couple of local food companies as well as exploring options with international companies in the areas of seafood, fruit and vegetables and baked food.
It has also been beefing up its presence in retail. Trent, the company behind the Westside chain, three years ago launched Star India Bazaar. Star India Bazaar is a hypermarket, the big brother of supermarkets.
Source: Business Standard
Reliance Fresh procures Solan vegetables
July 4, 2007
Reliance Fresh, part of the retail arm of Mukesh Ambani’s Reliance Industries, has started buying vegetables from Himachal Pradesh’s Solan district, which produces the bulk of the state’s vegetables.
After an agreement with the Solan market committee, Reliance Fresh started buying vegetables from June 19 onwards. This was confirmed by the Solan market committee chairman, Laik Ram Sharma.
Reliance Fresh has already started procuring tomato and cucumber for sale through its outlets in metropolitan cities. More types of local vegetables will also be purchased by the company soon. Vegetables grown here are in huge demand as they are harvested when it is off-season for farmers in the plains including cauliflower, capsicum, raddish, peas, french beans and carrots among others.
Tomato alone accounts for over Rs 30 crore in the mid hills of Solan district. The vegetables are also considered tastier than those grown in the plains. Reliance Fresh also plans buying pulses and corn grown in Arki and Nalagrah areas of the district.
Source: Business Standard
New brand identity for Spencer’s Hyper
June 30, 2007
Spencer’s Retail launched a new brand identity for the largest of its signature, Spencer’s Hyper, the 54,000 sq ft store at the Inorbit Mall, in Mumbai.
The refurbishment of the store follows the launch of 40 stores in the country over the last seven days and the announcement of an investment of Rs 1,000 crore in the business by the company.
The RPG Enterprises group, promoters of Spencer’s, will invest aggressively in the retail business, said Mr Harsh Goenka, Chairman. The group’s hyper formats are located in New Delhi, Gurgaon, Ghaziabad, Hyderabad, Visakhapatnam, Aurangabad, Durgapur, Lucknow and Jaipur.
Source: The Hindu Businessline
Bharti and Wal-Mart getting closer to a deal
June 27, 2007
The long awaited deal between Bharti and Wal-Mart is getting closer to being signed, and is likely to happen “ as early as next month”, according to Sunil Mittal. He added that, "There has been a delay, as there are multiple agreements and legal issues we have to deal with, but I don't see it taking longer than that. This also has had no impact on the work in progress. We are hiring people, locations are being identified and work is on through Bharti. We are also working on finalising the formal agreements at the same time."
Source: The Economic Times
Landmark plans to increase investment by Rs. 4.5 billion in India
June 29, 2007
The Landmark Group announced that it would be investing Rs. 4.5 billion for its Lifestyle and Home Center brands in India. According to Lifestyle Executive Director Kubir Lumba, "We would invest Rs. 450 crore (Rs 4.5 billion) to triple the number of both our retail formats Lifestyle and Home Centre over the next three years. We would primarily target Tier I and metro towns across the country."
The expansion would take the total number of Lifestyle stores from 12 to 36 and Home Center outlets from 5 to 15 in the next three years. The expansion is to be funded by a mix of equity, debt and internal sources.
Source: DNA Money
Reliance to form partnerships with local vegetable vendors
June 15, 2007
Reliance Retail is planning to partner with local fruit and vegetable vendors to counter political opposition on behalf of small-scale vendors. There have been pilot projects to this effect, which have already been launched in Hyderabad and Ranchi.
Reliance is using two approaches; one, where the vendors become part of the payroll of the company and works for a fixed fee. In the second approach, the vendor will be able to buy products from Reliance on credit and shares the profit with the company. In the second method, vendors will be able to take advantage of Reliance’s low cost sourcing as well as its supply chain infrastructure.
Source: The Economic Times
No cakewalk for retail biggies
July 06, 2007
Amid the noise around multinational retail chains queuing up to enter India comes a calming revelation. According to management consultancy firm A T Kearney, not all retail biggies continue in the new markets that they enter.
In fact, a disconcerting two out of three have not succeeded out of their home markets and 70 per cent have withdrawn from Asia. Among the recent instances, Carrefour of France sold its stores in South Korea to E-Land in 2006 and, in the same year, Wal-Mart quit South Korea.
The biggest retailers in the world -- such as Wal-Mart, Tesco and Carrefour -- are keen to tap the opportunity in India, where the retail sector is expected to grow from $350 billion to $427 billion by 2010 and $365 billion by 2015. However, as talk of setting up shop in India turns to action, retailers face their share of challenges, not the least of which is the government's decision to allow foreign direct investment only in single-brand retail and only up to 51 per cent.
Already, Nanz, which had set up the country's first supermarket chain in a joint venture with Escorts, has shut shop here. Others have been complaining of tricky regulation, including cumbersome and "obsolete" customs procedures. Asia’s challenges for retailers include supply chain issues, infrastructure bottlenecks, complex customer behaviour and so on, points out Hemant Kalbag, principal, A T Kearny.
Add to this, a unique aspect to India - the large number (12 million) of neighbourhood kirana stores. "On an average day, you can see 45-50 trucks plying on the roads in Europe and US to cater to retailers. But places like Mumbai can't accommodate such traffic,” said Hypercity CEO Andrew Livermore. He adds, “Laws such as Packaged Goods Act and Weights and Measures Act are a big challenge for retailers." Agrees KSA Technopak chairman Arvind Singhal: "Retailing is selling whatever is needed and cultivating local competence. Very few international companies have these."
Source: rediff.com
FDI curbs not for franchise deals
July 06, 2007
Finance ministry officials are of the view that current restrictions that prohibit FDI in multi-brand retail cannot be extended to franchise agreements between an Indian company and an overseas partner. Their reasoning - franchise agreements are basically service agreements and in the case of services there can be no distinction between retail and wholesale, hence the present guidelines can only apply to retail in goods and not franchise agreements.
This view is significant as there have been speculations about the government banning franchise arrangements, which many consider a loophole that single-brand and multi-brand retail giants have been leveraging to enter India. For example, take the much-hyped case of Bharti Retail and Wal-Mart. This arrangement is at two levels: Wal-Mart is entering India as a wholesale trader, that is, as a cash-and-carry business giant, and secondly, as a back-end for Bharti Retail. If Bharti Retail were to use the name "Wal-Mart" for its shops, then it would pay a royalty to the American retailer and act as its franchisee.
While bigwigs like Tesco and Carrefour have decided not to enter India until FDI in multi-brand retail is opened up, there has been a view that they could always change their mind and appoint an Indian franchisee.
Source: rediff.com
‘Youth spending on apparel, accessories on par with elders’
July 3, 2007
The Indian youth spend almost the same amount annually on apparel and accessories as the elders in their household, revealed the IMAGES-AC Neilson Study on The Indian Wallet & Brand Share.
The report that ascertains the spending behaviour among the top-end urban customers in India, with a special emphasis on the youth segment, was released by Mr Hem Chandra Javeri, Senior Executive President, Madura Garments, and Dr Alo Ghosh of Techna at the recently concluded Delhi edition of the India Retail Forum, The Shop.
According to the report, the youth spend double of what their households spend on Internet usage, landline phones are passé compared to mobile phones and most young women prefer public transport while young men prefer private transport.
A zonal analysis done by the report reveals some interesting facets of youth in India. For instance, the disposable incomes of the working youth in the southern parts of the country are more than those of their northern counterparts. The report also revealed that North Indian guardians spoil their wards with the highest levels of pocket money. There are more smokers in the eastern parts while the western states prefer vacations as means to unwind. Youth down South spend more on two-wheelers, while youth in the West spend more on mobiles.
While average annual credit card payments are around Rs 62,220, for young adults the average is around Rs 1.21 lakh, even higher for women. About 12-13 per cent of the youth in India have home or car loans, but only 7 per cent have durable loans to pay off.
Source: The Hindu Businessline
Shakeout in the Indian retail industry on the horizon?
June 27, 2007
A new study called India 50, conducted by real estate consulting firm Jones Lang LaSalle Meghraj shows that due to the lack of infrastructure, logistic management and real estate worries will lead to a shakeout in the Indian retail industry in the next three years, with several retailers, concepts and malls shutting shop. According to Abhishek Kiran Gupta, Senior Manager (Strategic Consulting and Research) at Jones Lang LaSalle Meghraj, "A rapidly growing, but highly challenging retail environment will inevitably result in many losers as well as winners and two-three years down the road there could be a shakeout."
Those who survive are likely to be the real winners have far greater opportunities than ever before. The study stated that cities such as Bangalore, Kolkata, Hyderabad, Pune and Chennai are growing rapidly, although smaller cities are fast catching up.
Source: The Economic Times
India remains the top retail investment destination
June 21, 2007
The Indian retail market held its top position as the most attractive emerging retail market in the world for the third straight year in a row, according to AT Kearney’s annual report. The top markets according the their attractiveness for retail investment were India, followed by Russia and China in the first three spots, while Brazil, which was ranked highly in the BRIC report stood at the 20th position in this report.
The study noted that modern retail is growing at 25-30% in India, as compared to 13% in China and Russia. According to Hemant Kalbag, AT Kearney India’s Consumer Industries and Retail Practice Principal, "We anticipate seeing another year of major investments and new retail concepts changing the rapidly evolving organised retail landscape in India, not just in the metros but also deeper penetration in the tier two and three cities."
Source: The Times of India
Mall growth to ease up
June 21, 2007
Retailer’s growth plans and projections are all in disarray due to delays in completion of malls. Retail companies such as Pantaloon, Pyramid, Reliance, Hypercity and Globus are all facing this problem, which is leading to friction between retailers and real estate developers. It is estimated that these delays will cost retailers a lot of money, who have already tied up for merchandise and vendors in advance.
Source: The Economic Times
Smaller cities increasingly attractive for retailers
June 22, 2007
With many of the larger cities reaching saturation point, retailers are now focusing on smaller cities, mostly II and III tier cities where they can open up stores. Consumers in most of these cities are already aware of the systems of organized retailing due to the widespread use of these formats in popular movies, television and the internet, and are eager to try them out for themselves.
The 6th annual Global Retail Development Index (GRDI) conducted by AT Kearney which studies retail market attractiveness for investment shows India at the top spot for the third year in a row. The Indian and Russian retail markets have held the top spots for the past two years, with China shooting past Vietnam and Ukraine to the third spot in this years index.
Source: The Hindu Business Line
Majority of malls in India not successful
June 22, 2007
While the retail boom is increasing the number of malls almost on a daily basis, only a very small number of these are actually successful. According to real estate and retail analyst, Susil Dungarwal, only 10-12% of an estimated 120 malls in India are successful. Malls might be opening on every corner, but most of them don’t get enough footfalls and those who do are not able to convert them into sales.
One reason for their lack of success is their design and tenant mix, which is often not given enough importance. The lack of retail design specialists has added to the situation, as once malls are built there is no one to manage them correctly.
Source: The Hindu Business Line
NextGen stores coming near you
June 10, 2007
Even though Indian shoppers visit the new organized retail stores, most shoppers still love their homegrown kirana store, doing their monthly grocery for bulk items from the hypermarkets and going to the kirana store for weekly top ups. SundayET commissioned a survey from market research firm Synovate, which found that 63% of all respondents used both formats. Only 26% of respondents preferred the organized retail stores alone and 11% preferred to do all their shopping at kirana stores.
According to Preety Reddy, vice-president of Technopak Advisors, “For the Indian consumer, the mall with their hypermarts are seen as a destination — not a place for one’s regular shopping because of problems of transportation, shortage of storage space, weather conditions and the preference to eat and buy fresh. The local grocery is where most of the regular shopping is done. This isn’t going to change for a very long time.”
Source: The Economic Times
Indians increasingly doing online shopping
June 14, 2007
Indians are spending more and more each month on the Internet, largely due to the widespread availability of broadband internet connections. According to the latest figures, e-commerce has reached Rs. 23 billion, with 10.8 million people or 43% of the country’s online population are buying items online.
According to a survey by JuxtConsult, 59% of Indians surf the internet from their residences and 77% of these people have broadband connections. The potential for e-commerce is still huge, as the number of people who are able to connect increases. Online travel booking is by far the most popular activity online, with 84% of all online users having purchased travel related products last year.
Source: The Economic Times
Tommy Hilfiger to add stores in India
June 29, 2007
US brand Tommy Hilfiger is planning a major expansion for its stores in India and will be experimenting with different formats to test out its range of apparels and accessories. According to Tommy Hilfiger India CEO, Shailesh Chaturvedi, "We have just completed phase I of our expansion and would be undertaking phase II in a rapid expansion mode. Currently we have nine exclusive stores in seven cities and by the end of this year we would make it to 20 stores in nine cities."
At present there are 9 stores in seven cities and the company hopes to increase this number to 20 stores in nine cities. So far all stores are exclusive stores, but now the company is trying out multi brand outlets (MBOs) as well. Tommy Hilfiger has also opened factory outlets in certain cities where it does not have exclusive stores.
Source: The Economic Times
Starbucks by winter most likely!
June 21, 2007
US coffee chain Starbucks’ hopes to be opening its first store by October and will most likely to be in Gurgaon, with a second outlet planned for Saket in Delhi. The company has set up a team for research and development, operations and marketing, and is currently based in the Future Group’s office in Gurgaon.
Starbucks India venture will be headed by Anoop Sequiera, the former CEO of Global Franchise Architects, with the licensee being New Horizons, a 51:49 JV between Starbucks’ Indonesian franchisee V.P. Sharma and Kishore Biyani, COE of Future Group. New Horizons will set up the company here, operate and manage their stores in India.
Source: CNN-IBN
Tesco criticizes retail “frenzy” towards entering Indian market
June 21, 2007
At the Reuters Consumer and Retail Summit, Tesco criticized the way international retailers were causing retail frenzy about entering India. The company added that it would only enter the country once the rules of ownership had been changed for entering the Indian market. Tesco had been holding talks with Bharti last year, which did not go through.
While European retailers are still very excited about growth prospects in the Indian market, the legal and operational hassles are making many feel the cost as too high. Tesco itself is still interested in the market but only once the laws change in regard to foreign ownership of retail stores.
Source: Reuters
Railways offers its space to retailers
June 23, 2007
The Indian Railways has large tracts of land and is working on a plan to offer some of its less used space to retailers. Besides stations, railyards, and goods sheds, the railways also has 7 cinema halls, which is what the organization is planning to give to retailers such as Reliance, Bharti-Wal-Mart, Future Group, to use as warehouses.
According to a Rail Bhawan official, “Big retail companies are in talks with us for taking various real estate spaces across the country, and these cinema halls are one of them. The real estate, including halls and clubs would be leased out to them on competitive basis, provided they cease to be of use to us any more.”
With the cinema halls located in cities such as Delhi, Chandigarh, Bhopal and Indore, which are usually located between 1-3 kms. from the railway stations and are a perfect option for warehouses for large retailers and cash & carry ventures.
Source: The Economic Times
Reliance Money keen on tying up with retailers
June 10, 2007
The Anil Dhirubani Ambani Group (ADAG) is keen on forming tie ups with major retailers, according to Sudip Bandopadhyay, Reliance Money’s Director and CEO. The company has already tied up with Barista just last month and plans to be available in other retail formats as well.
Source: The Economic Times
Indian Oil Corporation to launch rural malls
June 14, 2007
The Indian Oil Corporation (IOC) will be launching its own version of rural malls, which will be called Kisan Sewa Kendras. The company has appointed Technopak as its consultant for its non-fuel foray. IOC is owned by the government and is a Fortune 500 company and is the largest company in terms of sales.
IOC has already commissioned 1,180 KSKs and plans to open 1,000 more in this financial year itself. According to an IOC official, "The Kisan Sewa Kendras are the first steps towards the organised retail. The Kendras are being set up as small 'malls', where a farmer can buy whatever he needs. We are looking at maximising our non-fuel retail and the Kendras are a way towards that."
Source: Rediff Money
Category killers to be the next hot format?
June 16, 2007
Category killers are quite common in most western retail markets and are now becoming known to the Indian market as well. Any large retail chain that dominates its category is said to be a category killer. These stores are so focused on offering only niche products that they are able to offer discounted prices and other special deals and drive away the completion. In the US, these are also called as Big Box stores or Big Box format.
US home improvement chain Home Depot is already in talks with retailers here in India, although it has not specified with whom. The Future Group is keen on setting up it’s own such store, and is even considering its home furnishings format Home Town that recently launched in Delhi and Ahmedabad to be converted to one.
According to Rakesh Biyani, director of Pantaloon Retail India, “The Indian market is highly price-sensitive, and with increasing purchasing power, the demand too is mounting. So the concept is expected to find many takers here. We are expanding our speciality stores for books, electronics and home furnishings. Later, as the market evolves further we will consider setting up category killer stores.” Other possibilities are Reliance Digital and Tata’s Croma, both consumer durable stores, which also might convert to become category killers.
Source: The Economic Times
Amway offers its distribution network to MNCs
July 4, 2007
Direct-seller Amway is planning to offer its distribution set up to MNCs who are trying to get a foothold in the Indian market.
Its ready distribution network comprising nearly 5-lakh active members will be leveraged by such companies to enter new categories.
Offering to develop and launch a separate line of products on behalf of the MNCs — who would continue to sell their products on the retail shelves — Amway intends marketing and selling their specified brands through its distributors.
There are domestic companies ranging from aloe vera to bed sheet manufacturers who have already been using Amway’s distribution network.
Recently, it has also developed and packaged a premium line of Basmati rice for the Kohinoor brand. Besides, it has also been aiding smaller MNCs such as Twinings to sell its green tea through its distribution channels. At the same time, Amway is getting ready to pit its indigenous brands against the existing big FMCG players in the market.
Having developed India-specific brands such as Persona and Attitude, it is now planning to enter the colour cosmetic range with the latter and compete against big brands.
Source: The Hindu Businessline
UK retail experts to take on staff shortage
June 29, 2007
Retail Management Consultants (RMC) announced that it will be setting up a joint venture to provide experienced expats for senior positions in the retail industry. According to RMC Consultant Tony Brett, "Already about ten expats have been hired from Europe through us by some major retailers in India. In another two months time, we should be starting our operations here through a joint venture." A joint venture with an Indian company has already been formed although the company did not disclose the identity of the company.
Source: The Economic Times
Lack of infrastructure can undo retail boom
June 29, 2007
The bad shape of infrastructure in the country could be the downfall of the Indian retail industry, according to experts at a retail conference organized by the Indian Retail Forum (IRF). Before companies make expansion plans, they need to concentrate on setting up supply chains and logistic facilities. A study released earlier this week by Jones Lang LaSalle Meghraj has already highlighted the need to improve infrastructure, logistics and manpower which unless addressed would lead to a shakeout in the industry.
Source: The Economic Times
JWT gets Bharti Retail ad account
June 20, 2007
The highly valued Bharti Retail advertising account worth Rs. 500 million has been won by JWT. Ever since the company announced its plans to entering retail in a big way, advertising companies such as Lowe, O&M, Leo Burnett and McCann-Erickson have been vying for its account. Besides the advertising, JWT will also be responsible for building the Bharti brand as well as store design.
Source: The Economic Times
DLF planning malls on a large scale
June 10, 2007
The country’s largest real estate developer DLF Ltd. has made plans to set up the largest mall in the country. The mall will have more than 4 million sq ft of space and will also have a chain of multiplexes in several major cities such as Mumbai, Chennai, Bangalore, Hyderabad, Chandigarh and Ludhiana.
The company had earlier tied up with Trent, the retail arm of the Tata Group, as a partner for its malls. According to a DLF official, "The size of our malls is also increasing due to consumer demand for greater retail diversity and we believe that in the future, size will be an important determinant of the success of a mall."
The largest mall of the country will be called Mall of India and will come up in Gurgaon on 32.87 acres of land and will be designed by Jerde Partnership and have a total leaseable space of 3.9 million sq ft.
Source: The Economic Times
Wal-Mart looking for a warehousing partner
June 13, 2007
Wal-Mart is conducting talks with Indo Arya, a Delhi based logistics company, to set up its warehouses in India. According to Yogesh Arya, director of Indo Arya, “We have been offered business by Wal-Mart and are looking for a suitable location in north India to set up an exclusive warehouse by 2008.” Wal-Mart is looking for a warehouse in the range of 50,0000 to 200,000 sq ft. Indo Arya has recently also set up a 514,000 sq ft warehouse in the state of Haryana to serve several retail companies such as Pantaloon, ITC and Reliance Retail.
Source: The Economic Times
Retail and real estate biggies look for opportunities in small towns
June 27, 2007
Real estate developers are looking for partners for mall projects in smaller towns and cities. Unitech Limited has already planned to invest Rs. 5 billion in a Greenfield retail project in cities such as Pune, Nagpur and Indore. Other developers such as Parsavnath and Omaxe are currently going through proposals from local developers for buyouts.
According to Sanjay Chandra, managing director of Unitech, “We do not mind picking up majority or 100% stake in greenfield mall projects in upcoming towns and cities. It gives us the first mover advantage.” DLF is also considering several such proposals although it has yet to take a decision on any project as yet.
Source: The Economic Times
Commissariat Road, Bangalore is the next retail hotspot
June 05, 2007
The country’s hottest new retail spot is Bangalore’s Commissariat Road, which has a daily gross of Rs. 45 million. Spaces are very limited here, but nearby Vittal Mallya Road is also a good bet for retail. This one street in Bangalore has seen higher sales than any other place in the country, significantly higher than NCRs Mehrauli-Gurgaon Road with Rs. 36 million and Bombay’s Malad Link Road at Rs. 29 million.
Retail is big business in Bangalore, growing at an annual rate of 45% and is on the preferred city and launch list for most retailers. One reason for its success is its central location. There are pitfalls though, as the street lacks a high street atmosphere and has no cafés as Brigade Road does.
Source: The Economic Times
Godrej to focus on rural market
June 07, 2007
Godrej Agrovet is expanding its rural retail format Aadhaar, where farmers and rural customers can get everything they need, from food to electronics and more. The company will be setting up additional Aadhaar stores, with each store taking in a Rs. 200,000-500,000 investment. At present the company has 46 stores and plans to increase this number to 120 by the end of this financial year.
Source: NDTV Profit
McDonald’s India facing severe shortage of trained manpower
June 29, 2007
According to senior company officials, McDonald’s restaurants are suffering due to a high attrition rate of 83% at the front-end level. Vikram Bakshi, managing director of McDonald’s India, said, "Well-trained people with experience are being pulled by different people because they need that talent." McDonald’s is planning to open 45 restaurants by the end of 2007 to add to its 113 restaurants currently.
Source: Yahoo News
Retail to be one of the sectors with maximum jobs
June 12, 2007
According to the Assocham Business Barometer (ABB) study “Job Opportunities in Emerging Sectors”; the sectors that will create the maximum jobs and a rewarding career will be retail, aviation, hospitality and brokerages. The study also stated that there was a lack of information on many fields, including IT and management sectors.
Source: The Economic Times
Retail sector to pull talent from other sectors
June 08, 2007
The retail sector’s shortage of talent is likely to lead to professionals from other fields such as telecom, finance and IT to migrate to it. It has been estimated that the retail sector is facing a shortage of about 2-3 million people, which will be required in the next few years. But since the industry is still in its early stages, there still needs to be some structure set to it as yet.
Source: IBNlive.com
Café Coffee Day plans 50 outlets in Pak, Austria
July 6, 2007
The Amalgamated Bean Coffee Trading Company, popularly known as Café Coffee Day, will open 50 outlets in Pakistan and Austria in the next 15 months. With an investment requirement of Rs 25-30 lakh per outlet, the coffee house is expected to pump in Rs 15 crore for the expansion.
Along with operating four formats of businesses — Café Coffee Day outlets, Café Express, takeaways and vending machines — the coffee maker is experimenting with different formats. It runs 10 highway outlets; 40 outlets in offices like Wipro, Accenture and Infosys which contribute to high revenues due to less capital requirements; colleges, airports, and service apartments. Besides, Café Coffee Day is within the top three exporters of coffee beans, with exports of up to 10-12,000 tonnes every year.
Café Coffee Day’s turnover last year was Rs 400 crore, which is expected to grow by 40-50 per cent.
Source: The Hindu Businessline
NZ ice creams in India
July 2, 2007
New Zealand Naturals, one of the world’s premier ice cream and dairy products company, has announced the launch of a range of ice creams, which the company claimed had only vegetarian content.
The range is a spread over 70 flavours in different types of ice creams, smoothies, sorbets and all of them flown from their manufacturing base in New Zealand.
The promoter and franchisee of New Zealand Naturals, and represented through JKL Engineers and Consultants, Mr Pramod Reddy, said that this is the first such outlet in the South and they plan to set up six more within the year in tier II cities and also explore options to partner with large retail stores. He said they were also planning ice creams for diabetics.
Source: The Hindu Businessline
Big Apple to invest Rs. 450 million in retail stores in NCR
June 29, 2007
Grocery store chain Big Apple announced that it would be investing Rs. 450 million to double its stores in Delhi and the NCR area by 2008-09. According to Munish Hemrajani, managing director of Big Apple, "We would invest Rs. 45 crore (Rs 450 million) to set up 65 new stores in Delhi and NCR to take up the total number to 100, which would be further increased to 140 by the end of this fiscal." The company plans to expand to other locations such as Karnataka and Gujarat in the next financial year, with 200 stores in Gujarat and 50 in Karnataka.
Source: The Economic Times
Subhiksha focuses on the masses
June 20, 2007
Subhiksha, the largest grocery store from Chennai in south India has been expanding to new territories and continues to focus on its target market, the masses of India. The company is not looking to win over any of the higher end customers and doesn’t plan to change the way it operates. In an interview with The Economic Times, R Subramanian speaks about how he got started with creating the company, starting with 10 stores in Chennai and giving customers a 7-8% discount on all items.
The company took two years to break even, but the company continued to expand and open more stores. ICICI Venture joined as an investor and the company carried on its expansion into Tamil Nadu, till it decided to expand on a national basis in 2004.
Source: The Economic Times
Vishal Retail plans to open 150-200 stores by 2010
June 12, 2007
Vishal Retail Ltd. announced that it will be setting up about 150-200 Vishal Mega Mart stores by the year 2010. In its first phase, the company will be setting up 32 stores in the 2007-08 financial year. Most Vishal Mega Mart stores cover an average of 25,000 sq ft of space and take an investment of Rs. 50-60 million.
According to Ritesh Rathi, CEO of Vishal Retail, “We will be using the capital raised through the IPO to fund 22 of our 32 upcoming stores this year. Already realty deals for 19 stores have been finalised. Going by the present rate at which we are growing, we hope to open 150-220 Vishal Mega Mart stores by 2010.”
The company’s target customer belongs to the middle class and lives in urban areas, although the company is for the most part targeting tier II and tier III cities. Most of the new stores coming up in the first phase will be in Karnataka, Tamil Nadu and Andhra Pradesh.
Source: Business Standard
Subhiksha looking to install a wireless retail solution
June 15, 2007
Discount retailer Subhiksha is working on creating a wireless solution that will assist in managing demand and supply between its stores and the warehouse. According to managing director, R Subramaniam, the solution is already in the prototype stage and should be tested in 20-25 stores by September. The company has been expanding on a war footing for the past year and has 758 stores in major cities such as Delhi, Mumbai, Bangalore, Ahmedabad, Vadodara and Hyderabd. By the end of this year, the company hopes to have 1,000 stores.
Source: The Hindu Business Line
Reliance Retail plans to enter packet tea market
June 16, 2007
Reliance Retail is making big plans to enter the packet tea market and has started talks with Goodricke Group Ltd (GGL) to form an exclusive agreement for its tea for its own Reliance Select brand. According to the buzz in the industry, Reliance will buy CTC from GGL from its 12 gardens in the Dooars. Reliance is currently also formed a deal with the BK Birla Group’s Jay Shree Tea & Industries for its packaged tea, which it sells at select stores.
Source: The Economic Times
Is the government planning to introduce licensing in retail sector?
June 19, 2007
According to some news reports, the government might be planning to introduce a license system in the retail sector in an effort to protect the small retailer. If this plan goes through, local municipal corporations will have the power to decide where large retail stores come up in the city.
The reason why the government might put this plan into effect is due to the opposition of large international and domestic retail by the CPI (M) as well as other political parties. The plan is likely to benefit only the municipal corporation officials, who will wield power over retailers, but other than that all other parties involved will be at the losing end.
Small retailers have for years been selling products over the listed MRP, but consumers didn’t have any other choice but to pay that price. Now that there are lots of choices available to them, they will themselves select the option that is most beneficial to them financially and otherwise as well.
Source: The Economic Times
Government to redo FDI norms for franchise agreements
June 22, 2007
Luxury brands are likely to find it tougher in the Indian market as the government is planning to change its foreign direct investment (FDI) norms of franchise agreements that take place between Indian companies and overseas partners. If this change goes through, then franchise agreements in sectors that do not allow automatic foreign direct investment will be affected. Brands such a Chanel, Ferragamo, Valentino and Tiffany operate in India via this franchising route and Gucci, FCUK and Starbucks are planning on entering the market via a franchising agreement.
Source: The Economic Times
Government likely to liberalize certain sectors for FDI
June 22, 2007
The Indian government is planning to ease restrictions for FDI and exempt certain sectors from mandatory requirements under Press Note 1 (PN1). Sectors such as advertising, hospitality, franchise operations and other services are now likely to be excluded from Press Note 1. This move is likely to remove major obstacles in the fields of advertising, hotels, agro processing and franchising.
Source: The Economic Times
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