Future Retail targets 4,000 small stores in 3-5 years
The retail arm of Kishore Biyani led Future Group will set up 4,000 “neighbourhood” small stores in the next 3-5 years as part of its continued focus on small stores for growth.
In a presentation on earnings for the quarter ended March 2017, the company said it will see “robust supply chain infrastructure and deployments across the network” for its neighbourhood stores formats that include EasyDay (acquired from Bharti Retail) in the north and Heritage Fresh in the south.
The firm will ramp up the number of neighbourhood stores from 538 as of March 2017 to 1,000 by September 2018, and to 4,000 in the next 3-5 years.
The company said in its presentation that there was a ‘compelling proposition” for neighbourhood stores as people prefer travelling less and shopping in their area even as consumption and “aspirations” rise among Indians with higher incomes.
A major feature will be a membership program where 1,500 households per store in a single neighbourhood will be eligible to become “members” or frequent shoppers. These members will be eligible for 10% discounts and “many services”, the company said, adding it has 1.3 lakh members in its existing network of neighbourhood stores.
“It is a very good strategy to expand aggressively in the convenience store format”, Abhijit Kundu, vice-president of Research at Antique Stock Broking said. “Future Retail has been focusing on increasing its throughput in their hypermarket format, trying to get higher revenue from existing stores, but they are not very aggressive in here,” he said. Future Retail’s hypermarket formats include Big Bazaar.