Riding on a sharp recovery from pandemic-led blows, supermarket chains are aggressively looking to expand nationwide in the coming years, according to retail real estate companies.
The big box retailers are betting on India’s long-term potential for organised food and grocery business, an estimated market of more than $500 billion.
While India is the world’s third largest food and grocery market, the sector is dominated by mom-and-pop stores which number around 12 million. So, there is great room for modern retailers to grow in that space.
An India Ratings & Research report from the Fitch Group said food and grocery retailers saw “meaningful recoveries” in October and November from the impact earlier in the year, with many breaking even. According to it, most retailers had over 90% of their stores operational heading into the quarter, compared with 70% at the start of the September quarter.
“More is aggressively looking for 300 properties all over the country,” said the head of a prominent real estate consultancy. “It is an open mandate for various real estate firms.”
More Retail chief executive Mohit Kampani did not respond to calls and text messages. Reliance Retail did not respond to an email seeking comment till press time Thursday.
The store expansions will add heft to the companies’ omni-channel strategies, as they plan to use their outlets either as last-mile delivery points or to act as feeders to kiranas.
“Every supermarket operator is expanding, including Reliance, More, DMart…,” said Shubranshu Pani, managing director of retail services at consultancy firm JLL.
Pani said cash flow is currently tight for most of the other retailers including in fashion and lifestyle, as they are still reeling from the shocks of the pandemic.
“Sales are happening for fashion retailers since August and they had a good Diwali, but they are still not out of the woods,” he said.
“Delhi is underserved for DMart. That is why they are looking at several locations,” said Shriram PM Monga, principal consultant at F&B and retail real estate advisory SRED.
A WhatsApp message to Neville Noronha, managing director at Avenue Supermarts that operates DMart, did not elicit any response till press time Thursday.
In 2018, More Retail was acquired by Samara Capital through Witzig Advisory Services from the Aditya Birla Group for about Rs 4,200 crore. Subsequently Amazon acquired a 49% stake in Witzig Advisory with 17% stake purchased through Class A shares which have voting rights and the rest 32% through Class B shares which have no voting rights. The deal was structured this way to make it compliant with the foreign direct investment rules in ecommerce whereby More can remain a seller on Amazon India’s marketplace.
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3 Comments on this Story
Abhinav 52 days ago
NDMC should Prepare Upgradation & Beautification of Popular Markets like Connaught Place, Khan Market to Incite Young people. Delhi administration must fast track upgradation of Chandni Chowk Market. Tourism is expected to grow with recovery From covid-19 Vaccination Program, Hotels & Restaurants must offer discounts to Inspire Customers.
Abhinav 52 days ago
Time is for Reliance to speedily settle its Issues & matters with Biyani Big Bazar & Re- Refurbish & upgrade Existing Retail Stores & Re-start Operations soon. Add New Suppliers, Introduce more digital Services, improve Condition of Stores . Covid -19 Recovery is in Sight & Malls should ready themselves by adding new Stores in their Space. Offer more Dinning spaces to Invite more Footfalls. Brick & Mortar Stores such as - Big Bazars, Spencer’s- Goenka Group, “Home Store”, Urban ladder like Furniture stores will have to add new Product inventories, add more Product Lines to attract new Customers. Hadrian Kind of Eatery Joints are needed to attract customers into malls. State administration of UP must Instruct IKEA to Ready its Store in Noida quickly because large stores like IKEA can help lift Retailing & Manufacturing in City .
Praker 52 days ago
Good for them.. since many years they were reporting loss and suddenly become profitable? Strange.. in the matter of income tax, itâ s not profitable and otherwise itâ s a good business?