Reliance Retail is slowly filling its top slots with professionals from Thailand, a country whose retail market once used to resemble India’s with its freshly-minted organised players hemmed in by a well-entrenched network of neighbourhood stores.

The firm has already hired at least 10 people in key roles — all of them from Thailand’s Tesco Lotus. Around 20-25 more are expected to join in the coming months to run its value formats, confirmed two persons on condition of anonymity since they are not authorised to speak to the media.

The Thai professionals will be heading key functions such as operations, commercial, IT, supply chain and HR. ET had reported last month that Gwyn Sundhagul, former chief marketing officer and director at Tesco Lotus, has joined as CEO of value formats at Reliance Retail.

Titima Bantrapiwat has joined as head of supply chain and Sansahee Kubena has come on board as head of HR.

“We engage with global and domestic talent in line with requirements and identified gaps across levels in the organisation. We would not like to comment on any specific appointments,” said a Reliance Retail spokesman said. Meanwhile, K Radhakrishnan who was heading value format and Ratan Agarwal, head of HR for the value format, have left the company.

Raghu Pillai who virtually ran the show as president for strategy at the value format has been shifted to the chairman’s office to oversee alliances and joint ventures.

Many of these Thai professionals are being hired on the company’s payroll, while others are being brought in on limited-term contracts. The incoming team has been mandated to study the company’s systems and processes closely, identify the gaps and suggest remedial measures, said another person familiar with the retailer’s plans.

Reliance has been in talks with various global retail chains for a strategic partnership. ET had reported on its talks with French retail chain Carrefour to establish a partnership in the value retail business.

The infusion of foreign talent is happening in the division that runs the so-called value retail formats —Reliance Super and Reliance Fresh and Reliance Hyper. The company, which started operations in 2006 and now runs about 1,000 stores across formats, also runs a line of specialty stores such as Trends, Timeout, Digital, Footprints and Jewels. Value format stores accounts for more than 70% of the company’s revenues.

Talent shortage

India’s $37 billion organized retail industry, which enjoys only a fraction of the estimated $400 billion retail market, faces huge human resources challenge, as it scrambles to fill up ranks with able and experienced professionals. The spotlight on management talent is even harsher. Many retailers, who undertook a scorching pace of expansion during the boom years, have been hurt badly since the onset of the economic slowdown. While one major retail chain, Subhiksha, went bankrupt, a few others reportedly came close.

Reliance Retail, a subsidiary of Reliance Industries Ltd, reported a loss of Rs 260.2 crore on a combined turnover of Rs 2,400 crore last fiscal. RIL chairman Mukesh Ambani emphasized t

Mumbai-based VVF Ltd beat Mukesh Ambani’s Reliance Retail to acquire three brands from detergent and home care company Henkel India, namely Aramusk and Moloy soaps and Mahabringol hair oil.

The move comes three months after VVF, the makers of Doy and Jo soaps and one of the world’s largest contract manufacturers of bar soaps, bought out Henkel’s plant at Tiljala, Kolkata.

Rashmin Joshi, president and director (consumer goods) of VVF, confirmed the development. “We have been looking at such acquisitions as part of our core growth strategy,” he added. Reliance Retail, which was keen to buy the three regional brands on the block to boost its private brands business, lost out because Henkel was keen to sell them off along with the plant.

“Reliance Retail was keen only on acquiring the three brands; so lost out to VVF,” an official directly involved with the development said.

The total deal is estimated at Rs 22-23 crore, with the plant accounting for Rs 17-18 crore, the official said.

Although the brands do not bring in much turnover at a national level, they are attractive local buys. Aramusk is among the oldest male deodorant soaps in the country with a loyal consumer, while Moloy sandalwood soap and Mahabringol hair oil have reasonable equity in eastern India.

“We plan to take the three acquired brands national in due course,” said Mr Joshi, pointing out that his Rs 1,350-crore company already covers one million outlets across the country. The Kolkata plant, which can produce 10,000 tonnes of soaps per year and a smaller amount of toothpaste, will be VVF’s eighth plant.

It will manufacture Henkel’s Margo, the three acquired brands, and its own Doy at the plant, Mr Joshi said.

The Chennai-based Henkel India, 51% owned by Düsseldorf, Germany-based Henkel group, put the three brands on the block last year. Media reports had said Marico and Emami too were interested in Aramusk and Moloy brands.

The company wanted to prune its portfolio to focus on flagship brands Henko and Mr White (both laundry care products), Pril dishwasher, Margo soap, Fa deodorants and Neem toothpaste.

Alongside, Henkel — which also makes haircare brands Igora, Bonacure, Glatt and Palette and Bref surface cleaners — also decided to divest the Kolkata plant to concentrate on marketing.

Henkel had acquired the plant along with Aramusk and Moloy brands one decade ago when it bought out Shaw Wallace’s consumer care division, which included Calcutta Chemicals and Detergents India.

Henkel now has only one plant in Pondicherry for manufacturing its laundry and home care products. About a dozen contract manufacturers make the rest of its products as the company wants to focus on marketing and distribution.

Apart from soaps brands Doy, Doy Aloe Vera and Jo and contact manufacturing, VVF also makes oleochemicals, a key ingredient for soaps and cosmetics. In mid-2008, VVF had acquired Henkel’s soap manufacturing plant in Poland. It was the first European facility of the company with a global capacity of 300,000 metric tonnes.

Mukesh Ambani-led Reliance Retail has devised a new business model, under which it will open small outlets at the premises of large corporates.

The company, which is a subsidiary of Reliance Industries, will soon approach big corporate houses with this proposal to implement the novel business plan, a top Reliance Retail Official said.

"We will approach big corporate houses, where thousands of people work, with a proposal to open our small retail outlets there," the official told PTI.

Elaborating on the new business model, the official said RRL envisages an employee-friendly retail format. It will provide price discounts to employees in these stores.

In the first phase, RRL plans to open Reliance TimeOut Stores, engaged in books and music retailing business, in Mumbai and Delhi.

"Our initial plan is to start this with our TimeOut stores where we sell music, books and gifts.

Mukesh Ambani-led Reliance Retail Ltd plans to open a total of 45 stores of its books and music retailing business -- Reliance TimeOut -- across India over the next three to five years.

The multi-format retailer, which operates seven stores of TimeOut, said it wants to tap India's Rs 3,500-crore book retailing industry, of which only 40 per cent is organised.

"In the next 3-5 years (or December 2014), we will have a total of 45 TimeOut outlets across four states - mainly in western and southern India. Our strategy is to first saturate a town, then a state followed by the entire region," Reliance Retail, Business Head, Reliance TimeOut, Deepinder Kapany told PTI.

He said the next couple of months will see five stores being opened in Mumbai.

"The next few stores in (calender year) 2010 will come up in Delhi, Ahmedabad, Mumbai and Bangalore. We want to saturate Gujarat, Maharashtra, Karnataka and the National Capital Region (NCR)," Kapany said.

This is part of an overall aggressive expansion strategy by the format, which will enter Pune, Nagpur, Hyderabad, Mysore, Mangalore, Ahmedabad, Baroda and Jamnagar.

Reliance Retail will expand through the cost-effective model of revenue-sharing format with property owners.

Famed British toy retailer Hamleys will make its India debut with a 22,000-square-feet store at the popular Phoenix Mills in Mumbai, by February next year.

Reliance Retail, which has a 20-year-franchise agreement with the retailer, will set up 20 stores in the first seven years of the agreement.

Besides Mumbai, other cities on the retailer's list include Delhi, Bangalore and Chennai in the first phase of the launch. The second store, says Bijou Kurien, president & chief executive, lifestyle division, Reliance Retail, will be launched in Chennai by June next year. This will be a smaller store, roughly 12,000-square-feet in size. “Stores in Delhi and Bangalore will come up next, but we will first monitor the performance of the first two stores,” says Kurien.

Hamleys’ flagship store in Regent Street, London, is a five-storey-structure, over 54,000-square-feet in size. Other Hamleys stores in the UK and rest of the world are slightly smaller. The franchise agreement with the 248-year-old retailer will allow Reliance Retail to use the latter's branding, store design and best practices when setting up outlets in the country. “They will also provide training to staff in soft skills etc,” says Kurien.

Hamleys was acquired by Baugur, the Icelandic investor that also owns Oasis and House of Fraser, for £47 million in 2003 and has since set its sights on international expansion. However, so far, the group only has a small presence in Denmark but has opened a few stores in West Asia.

Brand experts said as a British institution that may possibly be as well known overseas as at home, Hamleys is likely to enjoy a head-start in many of its planned new markets. The Regent Street shop is in fact one of London's 10 most popular tourist destinations and is visited by four million people a year. Moreover, Hamleys prides itself on a history of breaking down cultural barriers. In 1909, for instance, it became the first store in Britain to sell a novelty from China called ping pong.

Reliance Retail will not only stock Hamleys merchandise, but also products that are exclusively available to the UK retailer.

Besides, allied national brands from manufacturers such as Mattel, Funschool etc will also be available at the outlets. “The overarching branding will be Hamleys. But there will be space available in the store for allied brands,” says Kurien.

Some of the 20 stores will be located in tier-two cities as well.

The toy retail market in India is roughly Rs 2,500-3,000-crore in size. Of this, about 25 per cent comprises the branded market. The balance 75 per cent is made up of imported toys and products manufactured locally. The total toy retail market, say experts, is growing at 10-12 per cent per annum in the country. But the branded portion has the potential to grow even faster at 25 per cent, they add.

Mukesh Ambani-led Reliance Retail is in the expansion mode and is looking to take its food-to- fashion chains into newer Indian cities as well forge new strategic alliances.

"I am pleased to report that we have done extraordinarily well, despite the tough economic conditions.

Having achieved critical scale, Reliance Retail is now working on expanding its coverage. This expansion would encompass new cities, new markets and new strategic alliances," Reliance Industries Chairman and Managing Director, Mukesh Ambani, told shareholders at the company's 35th Annual General Meeting.

Reliance Retail is an unlisted and wholly-owned subsidiary of energy giant, Reliance Industries Ltd (RIL).

Concurrently, Reliance Retail would focus on continuously innovating to enrich the shopping experience, through customised offers, private labels and 'value-for-money' merchandise, he added.

Reliance Retail today serves over five-million customers in 86 cities across 14 states. The fashion-food-gadgets chain operates nearly 1,000 stores.

"We are developing an ecosystem, which will strengthen our offering, while bringing wealth to our stakeholders, primarily marginal farmers, small transporters and vendors," Ambani said.

RELIANCE Retail is yet to see profit in any of its formats. The company has reported total losses in excess of Rs 450 crore in 2008-09 alone. Mukesh Ambani had launched the retail business in 2006, which now operates under 15 formats.

Data obtained from RIL shows that till March 2009, Reliance Fresh had run up the highest negative reserves of Rs 276.77 crore. The other formats such as Reliance Hypermart (negative reserves of Rs 54.32 crore), Retail Concepts & Services (-Rs 38.37 crore) and Reliance Vantage Retail (-Rs 21.23 crore) have also run up negative reserves.

Reliance Dairy Foods (with negative reserves of Rs 7.63 crore), Reliance Digital Retail (-Rs 15.49 crore), Reliance Footprint (-Rs 10.47 crore), Reliance Trends (-Rs 3.1 crore), Reliance Gems and Jewels (-Rs 5.73 crore) and Reliance Home Store (-Rs 4.54 crore) are among the other formats that have reported accumulated losses.

RIL’s unabridged annual report confirms the consolidated negative reserves and the total loss. The company did not respond to an email seeking comment, possibly because of the silent period ahead of its annual general body meeting.

A part of Reliance Industries, India’s most valuable company, Reliance Retail now runs as many as 900 stores across 14 states in India, spanning the supermarket, convenience store and mini hypermart formats, in addition to specialised units which sell everything from eyewear to jewellery. The business, which encompasses partnerships with firms such as Marks and Spencer, Office Depot and Hamleys, now counts five million customers as members of its business-wide loyalty programme.

Reliance Retail has now struck a strategy to partner with global majors for specialised retail formats, catering to distinct sets of shoppers.

While the retail major has outlined a plan to enhance value for its customers through customised offers, private labels and ‘value-for-money merchandise,’ its shareholders are seeing a rising portion of Rs 4,051 crore invested as equity capital in Reliance Retail erode by way of losses accumulated at each of its subsidiaries.

These firms, which run formats such as the food and grocery specialty store, electronics specialty store, foot wear specialty store and apparel specialty store, have all made losses in the fiscal year 2008-09 (see table alongside). Even support businesses such as Strategic Manpower Solutions have totted up negative reserves of Rs 10.24 crore while Reliance Trade Services Centre has accumulated Rs 21.23 crore in losses. Companies engaged in the supply chain aspects of the retail business too have not been spared.

Reliance Agri Products Distribution had negative reserves of Rs 7.83 crore while Reliance Food Processing Solutions had negative reserves of Rs 37.34 crore and Reliance Supply Chain Solutions Rs 12.9 crore. Firms such as Reliance Loyalty & Analytics, which supports the Reliance One customer relationship management programme, had negative reserves of Rs 6.44 crore till March.

The rising losses in the retail business are learnt to have led to the billionaire Ambani downsizing the ambition for this business, which was expected to bring about a paradigm shift to his oil and petrochemicals commodity venture. However industry experts point out that even other large business families such as the Kumar Mangalam Birla-controlled Aditya Birla Retail too are losing money as they try to get their business model, scale and efficiencies right.

By: Satish John

Mumbai: Just how big is the retail business of Reliance Industries Ltd, or RIL?

The answer, according to the company’s annual report for 2008-09: well over half the size of Pantaloon Retail India Ltd, India’s largest listed retailer that set up its first Big Bazaar store in 2001.

Reliance’s first store opened for business in late 2006. Still, Reliance’s retail subsidiaries remain unprofitable, an indication of the challenges facing India’s modern retailers.

The firm’s annual report, released on Wednesday, shows that RIL’s retail businesses ended the year with an aggregate loss of Rs557 crore on a revenue of about Rs4,000 crore. Pantaloon Retail reported a net profit of Rs140.58 crore on net sales of Rs6,341.7 crore in 2008-09.

Among RIL’s retail subsidiaries, Reliance Retail Ltd (RRL) reported a loss of Rs20.24 crore on a revenue of Rs622.31 crore; grocery chain Reliance Fresh Ltd reported a net loss of Rs249.30 crore on revenue of Rs1,778.06 crore; and Reliance Hypermart Ltd reported a loss of Rs51.84 crore on a revenue of Rs372.32 crore. Reliance Dairy Foods Ltd and Reliance Digital Retail Finance Ltd too reported losses.

“The (losses) are small change for a company of RIL’s size,” said an analyst who tracks the company at a Mumbai brokerage and who did not want to be identified. The firm is now scaling up its retail operations.

“Through this year, RRL increased its footprint to more than 900 stores in 80 cities across 14 states in India,” RIL said in its annual report. “Keeping in sync with its multi-format store strategy, RRL added new formats to its spectrum in the last year,” the company said in its annual report.

Several operational metrics in the consolidated annual report for 2008-09 have doubled after the Bombay and Gujarat high courts approved the merger of Reliance Petroleum Ltd with RIL. Its net fixed assets have doubled to Rs1.69 trillion from Rs84,889 crore in 2007-08. Its total assets have surged to Rs2.45 trillion from Rs1.49 trillion and its net worth has increased 55.15% to Rs1.26 trillion. The number of employees in the firm’s roster, however, slipped to 24,679 from 25,487 in 2007-08. Its contribution to the national exchequer also fell to Rs11,574 crore from Rs13,696 crore, although not all of it could be ascribed to tax planning as depreciation rose to Rs5,195 crore from Rs4,847 crore a year earlier.

RIL’s appetite for cash was evident from the fact that it divested its entire mutual fund portfolio of Rs3,058.73 crore even as it received a cash infusion from the balance subscription of Rs15,142 crore.

RIL’s cash and cash equivalents at the year-end stood at Rs25,050 crore, placed in instruments such as fixed deposits or government securities. “The management anticipated the liquidity crisis,” said a spokesman for the company.

RIL’s net gearing was still at a stable 27.8%, even as a bulk of its capital expenditure budgets are in place, said the analyst mentioned earlier. He added that RIL has to de-bottleneck its refinery capacities a bit, which will not entail much funds. The analyst also said RIL is at its peak in terms of the debt burden as its investments in the new refinery at Jamnagar, Gujarat, and in the Krishna-Godavari basin will start paying off from now.

There were some interesting transactions with related entities such as Reliance Gas Transportation Infrastructure Ltd, a company promoted by RIL’s promoters, which is setting up intra-city and inter-city gas pipelines.

RIL invested in 500 million non-cumulative preference shares of Reliance Gas for Rs2,000 crore. As per regulatory norms, RIL cannot invest in the equity of the gas transportation company. RIL had also bought 85,000 shares in the National Stock Exchange for Rs28.48 crore during the year.

The firm decided to levy “manpower deputation charges” of Rs20.81 crore on RRL for 2008-09, against zero in 2007-08. Reliance Trends was levied Rs12 crore under the same overhead, and Reliance Petroinvestments Limited was charged Rs2.75 crore.

The media in recent times has speculated about RIL readying for a major acquisition after a portion of its treasury shares, held by wholly owned subsidiary Petroleum Trust Ltd, was sold in the current fiscal. RIL in 2008-09 invested Rs314.53 crore in Delta Hydrocarbons SA Luxembourg. Gulf Africa Petroleum Corporation, which the firm acquired in 2007, is yet to make a turnaround.

“Significant reductions were achieved in supply chain cost and the operations were integrated into the RIL system,” the report said.

Bhuvanesh Khanna, the India Durables Business Head at Reliance Retail corporate office in Mumbai for their Reliance Digital business, is moving on. He is now headed back to Delhi after three years at Reliance. His impending move has been doing the rounds.

A veteran of the durables, media and retail industry, prior to Reliance, Khanna had done stints in India and the overseas at Hindustan Times, Whirlpool, Sanyo, Casio and Usha.

A Vice-President, Sales, with Hindustan Times at their corporate office in Delhi, Khanna was also the Project Manager for their Mumbai launch and was part of the core team that drove strategy.

After a long stint overseas, Khanna returned to India in 1995 and joined Whirlpool in India, where he spent over eight years. He was Director - Sales and was part of the original core team that took over Kelvinator and launched Whirlpool in India.

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As I see it, the initial brouhaha about the retail industry has quickly faded, the silken robes have now begun to give way to tattered rags, with most of the retail companies in India sitting on piles of stock and mounting debt situations.

Most of the large retail companies that scaled up massively in the last two years – the likes of Reliance Retail, Aditya Birla Retail had the same consultants who sold them similar business plans with inflated returns and profitability. SPSF for supermarkets were estimated between INR 750 – 1,200. The reality is hurting at closer to INR 500.

To aggressively scale up, no one bothered about rentals till yesterday. Business Development teams had targets not in terms of number of stores at x-rentals, but only in terms of number of stores at whatever rentals.

The order of the day was scale up and do it fast. Get a valuation and go public. This scaling up also meant hiring people in droves and hiring double that what were needed as companies fattened their benches, “to scale up fast”.

That dream is now bust.

Reality has set in and order of the day seems “austerity”. Companies are closing non-performing stores, reducing bench strengths, in some cases closing almost all stores and showing almost all their employees the door (as in India bulls). Others as Subhiksha are looking for financing and facing legal battles with FMCG companies, who have taken them to court for payment issues. What is surprising is one of their bankers has done that too, who had presence on their board!

No one said retailing is easy, but what takes the Mickey out of me and everybody else is – why the heck were Indian companies emulating established retailers in developed countries and modelling businesses at their returns. Not learning from their mistakes and learning's that they have had in the last 30 years. Not taking best practice lessons from them. Basically not doing their homework right in each and every way possible, and only modelling businesses at consultant opinions!

So where are we headed now – Re-evaluations. Which means back to the drawing board for most, bust for many and sell out for others.

Coupled with recession, it may take a year or more to come out of the current situation. For those of you reading this blog who have been laid off, take heart in the knowledge that things should start improving in the next 3-6 months once markets start stabilizing and some form of buoyancy returns and customers start shopping again.

Till then, focus needs to be on optimizing costs and getting the most out of a single paisa.

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Turning happy doesn’t seem to have worked for the retail business of the India-bulls Group, which also has interests in financial services, real estate and power.

The retail unit of Indiabulls recently repositioned its outlets as Happy Store with a new logo that comprised a smiley transposed on a cheerful yellow shopping bag, but according to a senior manager who recently quit the company and two senior company executives, Indiabulls Retail Services Ltd, the company that houses the retail business, has closed all but four of its 42 outlets.

These outlets had been inherited from Piramyd Retail Ltd, the firm that the group acquired in 2007 for Rs208 crore. In the process, Indiabulls has completely exited some cities such as Ludhiana and Jaipur.

The company, however, opened a new store in March in Destination Mall, situated in Faridabad in the National Capital Region. It also runs a multiplex and a food court in this mall.

Indiabull’s website, however, still says the group is “one of the fastest growing retailers having broad national brand presence with 47 stores located in seven cities”.

“Instead of opening five stores and firefighting on loss-making stores where the business deal is not making sense, it is better to do what we are doing,” said Anil Lepps, chief executive of Indiabulls Retail, in response to why the company has shut most of the stores.

An executive, who recently quit, said the company has also retrenched employees from the stores that have been closed and laid off at least 60 more people in the buying and merchandising team in existing stores in the past three-four months. He did not want to be identified. One of the two company executives mentioned in the first instance confirmed that dozens of people across stores and divisions have either quit or been fired in the past three months. “We are working on a very limited team. We are short-staffed,” he said, asking not to be named.

Lepps, however, said the company has only laid off around 10 people in the merchandising and buying team and is currently trying to rebuild the team with new hires.

Meanwhile, the landlord of one of the closed stores in Jaipur has moved a winding up petition against Indiabulls Retail in the Delhi high court. According to Sanjay Jhanwar, the lawyer representing the landlord in the case, the landlord has sought recovery of Rs1.5 crore against unpaid rent for several months.

In recent months, several retail firms here have either gone bust or have been closing down some stores, scaling back expansion plans, even laying off employees in an attempt to cut costs and to beat the acute downturn in the business that began with the slowdown in the economy.

Subhiksha Trading Services Ltd, the country’s largest discount retail chain, for in stance, has completely halted its operations amid mounting debt and a severe cash crunch.

Other retailers such as Pantaloon Retail (India) Ltd, Reliance Retail Ltd, Aditya Birla Retail Ltd and Spencer’s Retail Ltd have also closed stores and shelved expansion plans in the past year or so.

Indiabulls Retail’s Lepps, however, said the firm was still in a better condition than many of its rivals. “While others are bleeding hundreds of crores, our bleed is over because we have shut down all unprofitable stores,” he said, adding that he is currently focusing on the revival strategy.

“My idea is to get perfect with one store and once we get our model right...then we will plan to open a flagship property in Mumbai in one year and that’s when the new beginning of Indiabulls Retail happens,” Lepps said. “We are trying to figure out a differentiator...”

A March report by audit and consulting firm KPMG International said the slowdown in the retail business is expected to last for another 12-18 months. The firm said the sales growth in modern retail stores in December slowed to 11%, from 35% a year ago.

Indiabulls Retail has been plagued by problems, mainly financial, ever since it entered the business by acquiring Pyramid Retail from the Mumbai-based Ashok Piramal Group. Indiabulls officials privately say they inherited a “mess” from Piramal.

Piramyd was making losses at the time of its acquisition. Many investors expected cash-rich Indiabulls to turn around the company, but it has not happened thus far. On the contrary, the company has had to close down a majority of the inherited stores.

Indiabulls Retail’s stock sank nearly 90% to Rs14 on Thursday, from a peak of at least Rs200 in December 2007. It, however, rose 10% to end at Rs16.30 on the Bombay Stock Exchange on Friday. The firm has also been under fire from vendors in various cities who have accused it of not paying their dues for months together.

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Reliance Retail (RRL) is planning to counter the shrinking demand and rising costs stalking India’s organised retail industry.

company is rebranding some of its existing stores as ‘discount destinations’ reducing the number of products on offer and taking away air-conditioning, according to two people familiar with the matter.

All Reliance Fresh stores in Jaipur, Dharwad, Aurangabad, Hubli, Mysore and Dhanbad will be converted into ‘discount destinations’, which will offer up to 10% reduction on existing price, said an RRL official, who didn’t want to be named. These stores may also be rebranded to reflect the change and are tentatively referred to as Reliance Super Value, he said.

An RRL spokesperson declined to comment for this story, but the RRL official, whom ET spoke, said the company had already started a pilot project in Jaipur and is in the process of evolving finer details of converting Fresh stores into no-frills ones.

As of now, the exercise involves 30 stores and may be completed in a month or two.

The initiative is on the lines of Future Group’s KB Fair Price Shop, a chain of small neighbourhood grocery stores that offer discounts, fewer product categories and no AC. These shops, however, are not limited to small towns, and do not offer carry bags. These austere strategies run counter to those followed by RPG Group’s Spencers and Aditya Birla Group’s More supermarket chains, where shopping experience is seen as important as pricing.

The Future Group, India’s biggest retailer, has championed the cause of value retailing in India, on the lines of international retail giant Wal-Mart, even though prices offered at its stores still may not be as lucrative as Wal-Mart’s.

Reliance Retail, which runs over 800 stores across formats (hypermarkets, supermarkets and convenience stores) has been focusing on lower prices, a strategy that will take wings with the launch of “Reliance Super Value” in select towns.

People familiar with the matter say the retailer will squeeze its margin, cut down on costs by reducing power bill, rental, manpower cost and improve supply chain further to be able to offer lower prices to customers.

In the beginning of the year, Reliance retail has integrated the operations of all its formats. Now there is a centralised sourcing for much of its product categories that gives it better bargaining power with respect to the suppliers thereby meaning lower costs, which could then be passed on to consumers.

India’s most valuable company, Reliance Industries, had announced plans to enter organised retail in 2006, with an estimated investment of Rs 26,000 crore. Since then, it has shaped and reshaped its strategy, closed some stores, tweaked its formats and rationalised manpower to stay course in the retailing game, which has forced some fairly successful domestic retailers to the brink of bankruptcy.

The oil-to-retail company is now better placed to focus on retail with the Bombay High Court allowing RIL to sell gas from the Krishna Godavari region, thus monetising its investments. This is estimated to add almost $1 billion to its bottom-line by the end of the fiscal.

The company also commissioned its second refinery at Jamnagar in December which will add to its revenue and profits.

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French retail giant Carrefour has shelved its plans for multi-brand outlets in the absence of a local partner.

However, the company is on track with its plans for wholesale retail, where it is going solo.

Carrefour, the world’s second largest retailer, said it was not forging partnerships with any Indian firm, including Reliance Retail and Aditya Birla Retail.

“Carrefour is not associating with any Indian retail player. At the moment, Carrefour does not have anything to share on the same,” said a company spokesperson in an email to The Telegraph.

Plans for the first cash-and-carry store in the country by the third quarter of 2009 are on schedule.

However, front-end retail plans have hit a hurdle in the absence of a local partner.

Speculations were rife that the company was in talks with Future Group, Reliance Retail, Aditya Birla Retail and Spencer’s Retail for a joint venture on the lines of the Bharti-Wal-Mart deal.

However, after short listing six from 18 companies, it is yet to choose a partner.

Indian law allows 100 per cent foreign ownership in the cash-and-carry business. However, partnership deals with a local player is a precondition for entry into multi-brand retail.

Carrefour, which has 15,000 stores across 33 countries, had announced its plan to enter the country through the cash-and-carry route in 2007.

Analysts said stagnant sales in France — which accounted for nearly 50 per cent of the global sales — had prompted the company to explore India’s fast growing retail sector.

Carrefour said it was finalising sourcing arrangements with the suppliers of food and non-food items ahead of the launch of its wholesale outlet in Delhi.

“Every market we enter, we work closely with local producers, farmers, agricultural co-operatives and manufacturers. This concentration on domestic sourcing allows us to make valuable contribution to the development of the local economy,” Herve Clec’h, managing director of Carrefour India, had said.

The French retailer is competing with US-based Wal-Mart Stores, Britain’s Tesco and Germany’s Metro AG.

While, Wal-Mart will soon open its first cash-and-carry store in India in partnership with telecom giant Bharti Enterprises, Metro AG of Germany — the world’s fourth largest retailer — already has stores in Bangalore, Hyderabad, Mumbai and Calcutta.

Tesco, the third largest retailer, is also firming up plans to set up cash-and-carry stores in the country. It has also entered into a franchisee deal with Tata group’s retail arm Trent Ltd.

Assocham survey

Industry body Assocham wants a single authority to regulate the country’s retail sector instead of multiple authorities, according to PTI.

A survey by the chamber revealed that over 95 per cent of organised retailers are opposed to the retail sector being jointly regulated by the ministries of commerce and industry, and consumer affairs.

Submitting the survey, to the two ministries and the Planning Commission, Assocham said multiple governance agencies in the sector caused confusion, which needed to be removed.

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Reliance retail revamp plans – telecast on NDTV

Mukesh Ambani-controlled Reliance Retail, which is reviewing the performance of Reliance Fresh outlets in Jharkhand, may close down the non-viable ones.

According to a company source, a group of technical experts are reviewing the performance of Reliance Fresh outlets. "Those that are not doing well may be closed down. In that case, their assets will be merged with other units. This is being done at the national level," the official said.

Retail industry circles indicated the sales at Reliance Fresh outlets had been impacted by the recession.

Incidentally, Reliance Retail had launched its first outlet in November 2006 under the Reliance Fresh banner. In Jharkhand, there are 10 Reliance Fresh outlets in Ranchi, while Jamshedpur and Dhanbad seven each. A Reliance hyper mart was also inaugurated in Ranchi last year which is said to be one of the biggest, with 33,400 sq ft floor space and 30,000 products

Incidentally, two Reliance Fresh outlets -- one in Upper Bazaar, Ranchi and one in Jugsalai, Jamshedpur -- have already closed down. However, this is being attributed to non-viability due to their poor location. And performance of many others are reportedly poor.