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| Retailers upbeat on 2010; line up Rs 600 cr for investment |
| Pradipta Mukherjee / Kolkata Dec 29, 2009, 00:41 IST |
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The country’s largest retailers — Future Group, Spencer’s Retail and Shoppers Stop — have lined up investments of at least Rs 600 crore for 2010.
For Shoppers Stop, while 2009 was a “cautious” year, 2010 is likely to see more expansion. “In 2009, we launched only two stores and added 100,000 sq ft. But in 2010, we are likely to add eight stores of around 400,000 sq ft. Currently, we have around 30 stores in India. We will have mainly large format stores,” CEO Govind Shrikhande said.
Shoppers Stop invests Rs 10-12 crore per store, which works out to investments worth Rs 100 crore in 2010.
Likewise, Pantaloon Retail, the country’s largest retailer, plans to spend nearly Rs 400 crore for expansion of its various retail formats by June 2010, to add up to 2.4 million sq ft of retail space.
“We have raised Rs 500 crore in November through qualified institutional placement and are looking to raise some of the money for expansion,” said Kishore Biyani, CEO, Future Group, the holding company of Pantaloon.
“Pantaloon for us is one of the best performing formats showing same-store-sales (SSS) growth in excess of 25 per cent. We are looking at opening 10-12 Pantaloon stores in 2010,” Biyani added.
Future Group, across its formats, added 2 million sq ft between July 2008 and June 2009 (the company’s financial year). The company invests between Rs 1,500 and Rs 3,000 per sq ft, depending on location of the property. Currently, the Future Group commands 13 million sq ft retail space in the country. Biyani hopes to make Future Group a Rs 25,000-crore entity with a total retail space of 30 million sq ft by 2014, up from Rs 10,000 crore right now.
Spencer’s Retail, on its part, will be expanding in chosen geographies with large-size stores. “We expect to open at least 12 large-sized stores in 2010,” said Vineet Kapila, president, Spencer’s Retail. Currently Spencer’s has about 220 stores on a total retail space of around 1 million sq ft, and spends Rs 4-8 crore per store. Spencer’s Retail plans to introduce new standalone pilot stores of sub-verticals like fish and meat and gourmet stores. It would also customise offerings to cater to the local requirements. While 80 per cent of the merchandise would be common across India, 20 per cent would to cater to local tastes.
Trade analysts are of the opinion that 2010 will see a number of retailers beefing up their presence in key Tier-II cities, though Tier-III cities will remain on the back burner for a while.
| RETAIL REVIVAL |
| Company |
Expansion plan |
Current status |
| Shoppers Stop |
6-8 new stores in 2010, addition
of 400,000 sq ft, for Rs 100 crore |
28 stores, 1.8 million sq ft |
| Future Group |
10-12 new stores for
Rs 400 crore |
Total retail area of 13 million sq ft,
across formats |
| Spencer’s Retail |
At least 12 large-sized formats in
2010 for Rs 100 crore |
220 stores, 1 million sq ft |
Shubhranshu Pani, managing director (retail services), Jones Lang LaSalle Meghraj, said: “In the metros and larger Tier-II cities, the economy has improved sufficiently to incite shopper interest once again and to boost sales in most categories. Even luxury retail holds a degree of promise in the coming year, though there will be generalised caution by higher-end retailers.”
The most convincing signs of revival are visible in historically retail-oriented cities such as Mumbai, Bangalore, Delhi, Kolkata and Pune, with the action beginning to perk up in other cities as well.
Company Expansion plan Current status Shoppers Stop 6-8 new stores in 2010, addition of 400,000 sq ft, for Rs 100 crore 28 stores, 1.8 million sq ft Future Group 10-12 new stores for Rs 400 crore Total retail area of 13 million sq ft, across formats Spencer’s Retail At least 12 large-sized formats in 2010 for Rs 100 crore 220 stores, 1 million sq ft.
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