“Club of Knowledge Hunters”

Big Bazaar footprint explodes all around

Posted by retailigence on October 5, 2008

Kishore Biyani does not subscribe to the view of a global meltdown. His Future Group’s strategy is paying off in numbers and his outlets seem to have more and more goods on offer. In effect, he is increasing the real estate that has been leased out to his company for more and more retail outlets.

One wonders whether people are buying more things if they enter a pretty looking showroom or a mall such as Pantaloons or Big Bazaar. To put it in John Donne’s language , “Wasn’t the customer weaned till then?”

For one, the Future Group’s retail chain Big Bazaar is itself is planning to have 300 hypermarkets in the country by 2010-11 .

The company may also increase its annual turnover to Rs 13,000 crore by 2010-11 , up from Rs 3,600 crore last fiscal on the back of its expansion. They had reported begun with their first store in October 2001 and till date have crossed the 100-store mark. This was capped with three stores that opened recently in Pune, Cuttack and Delhi. The company’s top brass plans to increase the number of stores to 300 by end of the 2010-11 fiscal.

Big Bazaar chief executive officer, Rajan Malhotra has reportedly concurred on that figure. The company has also gone on record saying that it would have another 35 stores by the end of its fiscal in June 2009 to take the total number to 135. To achieve this they are targeting a turnover of Rs 5,000 crore in the current fiscal year and have formulated plans for reaching a figure of Rs 13,000 crore by 2010-11 fiscal.

Malhotra has also reportedly concurred on such figures as well.

Ror the expansion, the company would be looking at both the metros and Tier I cities, besides Tier II and smaller cities.

The strategy seems to be perfectly on track as the Big Bazaar hypermarkets had a footfall of 11 crore last fiscal and the company is aiming for an increase in the numbers up to 14 crore this year. The average size of a Big Bazaar hypermarket is 30,000 sq ft to one lakh sq ft.

The retail industry is the largest in India among the new and the old economy industries. It employs around 7.93 per cent of the total workforce in this happening economy and also contributes to over 11 per cent of Indian’s GDP.

The retail industry in India will keep growing as it is not yet targeting even one per cent of the potential customer base and their day to day needs.

The industry as a result is expected to rise by 25 per cent yearly growth being driven by strong incomes, mutating lifestyles, and a young and spending populating compared to an aging one in other parts of the country.

It is widely believed that by 2015, the burgeoning retail industry in India will be worth $175 – 200 billion. Incidentally, it seems that India’s retail industry is one of the fastest growing with revenue to touch $320 billion in 2009. It may also be growing at a rate of six per cent every year.

A still higher increase of seven to eight per cent is expected owing to growth in spending in urban areas, rising incomes, and a parallel rise in consumption in rural areas.

Source: Economic Times


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