After acquiring south based Trinethra and plans to buy Pyramid Retail, the Aditya Birla group doesn’t want itself to be left behind in the race for getting their pie in the organised retail market. Instead of tying with Tesco, Carrefour, Woolworth, they have decided to go all alone.
They plan to open 172 hypermarkets and supermarkets starting from Pune. While Subhiksha is mainly into neighbourhood stores, Future Group has a strategy of having single brand outlets to multi-brand seamless malls, similarly Reliance Retail has started with Fresh stores and Reliance Digital to be followed by opening up of hypermarkets and specialised stores.
Birla’s business style is perceived to be a little conservative, and they are investing Rs. 9,000 crores in this venture which will enable it to establish a pan-India footprint. The retail venture would be aided by the group’s companies like Madura Garments (a key component of retail sales), IDEA cellular (for technical and communication requirements of stores), financial services (for providing consumer loans on its goods).
Organised retail sector’s growth is expected to be rapid, thus making it a valid and natural choice for AVB group to diversify in this sector. But, competition and late entry may somewhat derail the company’s retail growth rate to the overall industry rate.
The sector may also face hurdles as owing to non-clarity of FDI in retail, foreign chains have postponed their plans of entry into India.