Aditya Birla Retail plans to open 12-15 hypermarts a year

Aditya Birla Retail Ltd, the country’s second-largest supermarket chain retailer, is giving a big thrust to large-format hypermarket business after capturing the market with More supermarket chain. The retailer plans to open about 12-15 hypermarket stores a year, while consolidating its small-format supermarket business. The company, which has over 292 stock keeping units (SKUs) across 15 private label brands ranging from apparel, foods to personal care, is expanding its portfolio to become a leader in the value-retail business in the country. Thomas Varghese, chief executive officer, Aditya Birla Retail, spoke to DNA aboutt the launch of company’s sixth hypermarket store — More Megastore — in Mumbai. Excerpts from the interview:
 
Aditya Birla Retail has shifted its focus from supermarket business to large-format hypermarkets now…
We started opening hypermarket stores June 2009 onwards and already have Megastores in cities like Mysore, Vadodra, Aurangabad, Bangalore and Indore. Our plan is to open 12-15 hypermarkets every year, because this is a very practical number. Next, we will open stores at NCR and Hyderabad, and additional stores in Bangalore, Hyderabad and Delhi. Each store is 60,000 square feet in size and accommodates 17,000 SKUs.

How is the consolidation in supermarket business coming along?
The More supermarket chain is 632 stores strong with presence in 12 states. The consolidation is ongoing. We have shut down over a hundred stores already. So, while we evaluate non-profitable stores and shut them, we are opening others in different locations. The focus is more on hypermarket expansion.

Which categories in retail are doing better than the others and how are you ensuring growth?
All categories are doing well for us, fresh (fresh foods and dairy) is very strong because of the Indian eating habits. Our hypermarkets have huge storage of fresh dairy foods, which is an advantage to us. At any given time, we plan to offer 4,500 items at heavily discounted rates across apparel, foods, general merchandise and consumer durables for 365 days. We are also doing very well in our private label offerings — from cookies to toothpaste, jams and personal care products. I believe our private label juice is better than that of other FMCG companies. Our ladies apparel offers price-points 40-50% cheaper than many other retail stores. We have a R&D centre and a special team to work on private label offerings. We started our own milk brand in our stores in Mumbai. 

Going forward, what is the kind of growth you think is sustainable for you?
I think, we can do at least 25-30% growth year on year. 15-25% growth is very achievable for us.

Are you in talks with any international retailers for tie-ups, like many of your peers in the retail industry?
No, we are not. We are one Indian retail company that has decided to go on its own way. In fact, we are putting up much better stores than anybody is doing right now. We are not closed to the idea but it is not on top of our agenda at the moment.
How are you raising all the money? Any big plans there?
We are doing it through a mixture of debt and equity. As we keep expanding, we will go on investing. No particular fundraising plans for now.