Aditya Birla Retail to invest Rs.80 bn on expansion


Chennai : Aditya Birla Retail Ltd plans to invest some Rs.80 billion (over $2 billion) in 3-5 years to open stores across India, said a top company official.

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“The company is targeting to have at least 1,000 outlets and have a pan-India presence,” Suman Sinha, CEO of the company, told the media here Thursday.

“This is one of the fastest ramp-ups I am seeing,” said Andrew Denby, CEO, supermarkets, who has had overseas experience in retail with Marks & Spencers in South East Asia.

“From idea to implementation of the first store took just 132 days,” he said.

Currently, the firm has 325 stores in the country. Each outlet has a floor space of 4,000 sq ft, is air-conditioned and offers discounts ranging between 2 to 25 percent on the maximum retail price. The outlets also sell branded products.

Facilitating the rapid expansion is the acquisition of Trinethra Supermarkets (a south India-based supermarket chain) earlier this year for an undisclosed amount. The acquisition gave the company a readymade entry into 170 stores.

Aditya Birla Retail has tied up with 350 vendors for the southern region. It also sources fruits and vegetables directly from farmers. The company has warehouses in all the cities it has stores.

Declining to speak of footfalls, Sinha, however, said that each new store was expected to break even in a year.

The average bill size is not very different from most supermarkets, which is around Rs.150 to Rs.200, he said.

With large numbers of supermarkets in the south, particularly Chennai, Sinha says that the firm’s stores would differentiate in their ease of navigation, comfortable and cheery environments, and sufficient payment counters to avoid queues.

Currently, consumer spending patterns in its store reveal an 8-10 percent spend on fruits and vegetables, 30 percent of processed foods and staples 30 percent.

The company, however, expects an increase on the spending on fruits and vegetables owing to the “freshness” of these on account of direct sourcing.