Saturday, May 9, 2009

Aditya Birla Group sees 2,200 stores ahead

For Kumar Mangalam Birla, ‘More’ means more even in a downturn that has made many a retail venture stop on its tracks.

His Aditya Vikram Birla Group, which runs ‘More’ chain of supermarkets and ‘More Mega’ hypermarkets in the Indian retail market is in the process of relaunching its 640 stores, starting this month. The plan is to take it to 2,200 by 2015.

“The exercise will involve revamping of the stores based on a best practices study that the company has carried out”, said Thomas Varghese, CEO, Aditya Birla Retail Limited.

“We will have 720 supermarket stores by end of 2010. The hypermarket count will go up to 8 to 10 by end of March 2010 and 70 to 80 by end of 2015”, said Varghese.

After acquiring the 167 stores from Trinethra in 2006 and aggressively expanding to about 710 stores, the group had shut down 70 stores across the country after carrying out an evaluation exercise based on scorecards that saw poor performers out.

Its private label brands are present across 350 stock keeping units in processed foods (Feasters, Kitchen’s Promise and Best of India) and home and personal care products (110 %, Enriche, A U 79, Fresh-o-dent, Prarthana, Paradise, Pestex, Germex). “Our private label business contributes to about 4 to 5 per cent of the total turnover”, said Varghese.

Private labels are a good bet for retailers as it offers them good margins without having to spend a lot on mass advertising.

Varghese said that the retail business of the Aditya Birla Group will turn profitable at the end of five to six years. Varghese has been with the Aditya Birla Group for the past 10 years and was given the mandate to turn around the group’s pulp and fibre business before taking charge of the retail operations.

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