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| Pantaloon Retail plans to invest Rs 350cr to expand Big Bazaar |
| Pradipta Mukherjee / Kolkata Jul 06, 2009, 00:52 IST |
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Pantaloon Retail India (PRIL) is planning to invest close to Rs 350 crore over the next one year to expand its value hypermarket chain Big Bazaar. The group plans to set up 50 new Big Bazaar srores and aims at growing its retail space by 35 per cent, from 5 million sq ft right now. The group would also allocate special focus on fashion and foods segments through setting up exclusive outlets for these categories.
Currently PRIL commands 5 million sq ft of retail space for its Big Bazaar chain in India.
According to Sadashiv Nayak, president of Big Bazaar, “The challenge was to reach 100 stores in seven years. Having done that, we are targeting a 35 per cent growth in retail space every year.”
“We are also focussing on automation of processes so that transaction speed can be increased by 30 per cent. Already, we have brought down supply chain to two levels before stock hits the store, from five-level structure earlier,” Nayak said.
Big Bazaar contributes close to 60 per cent to Future Group’s turnover at present.
Big Bazaar plans to focus on fashion and foods categories going forward and earn over 30-35 per cent of its revenues from each of these categories.
It has created a sub-brand called ‘Fashion @ Big Bazaar’ to focus on selling apparel in the fashion segment.This strategic shift is expected to help the value retailer to increase its revenues from apparel business to as much as 35 per cent in two years and up to 50 per cent within five years. Currently, apparel business accounts for 30 per cent of the total business.
Food retailing, which is the mainstay of Big Bazaar’s current business, accounts for 30-35 per cent of the value chain’s business.
“We will focus on apparel as the margins here is as high as 35 per cent compared to food retailing business where margins are probably 12 per cent,” said Nayak.
The company currently has five ‘Fashion @ Big Bazaar’ stores in India, and intends to add another 10 in one year.
Likewise, it is also planning to undertake a similar strategy for food products and the top 200 consumer deals.
"We intend to come up with standalone stores which will sell differentiated food products, like local cuisine, staples and imported products and will be quite different from our existing food and grocery format Food Bazaar. We will roll out such sections in some of our Big Bazaar stores and then eventually launch standalone outlets," said Nayak.
On the other hand, PRIL has undertaken a pilot of stores which will only stock the best deals available at Big Bazaar. "We are currently testing this prototype in Mumbai with 2-3 outlets. In a year’s time, we will expand this as shop-in-shop across all our formats," Nayak added.
Big Bazaar also plans to allocate shelf space to self-help-groups (SHGs).
“We have tied-up with SHGs in around 40 of our stores in Maharashtra and we intend to replicate that in other states as well. These SHGs mainly sell cuisines at our stores, like ready-to-cook and ready-to-eat foods. We also advice them on packaging and brand building activities,” Nayak said.
The Big Bazaar stores are operational across three formats — hypermarkets spread over 40,000-45,000 sq ft, the Express format over 15,000-20,000 sq ft and the Super Centres set up over 1 lakh sq ft. Currently, there are 116 Big Bazaar stores pan India across the three formats.
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