A Fresh start for Reliance Retail

The launch of 11 stores selling fresh produce, groceries and dairy products at various locations in Hyderabad, including the upmarket Banjara Hills, will tomorrow mark the beginning of Reliance Retail's rollout across the country.

Apart from Reliance Fresh stores, the company is also slated to launch the Reliance Select brand, under which it will sell staples such as pulses and rice, which, it promises, will be cheaper than those in neighbourhood stores.

This is perhaps the reason behind the Nita Ambani-designed stores being opened by housewives tomorrow. Nita, Mukesh Ambani's wife, has been involved with all the aspects relating to store design, branding, customer experience and people processes in Reliance Retail.

The company says it will have nearly 1,000 stores, many of them 2,000-5,000 sq ft, spread across major cities in 10 states by March. Important markets such as Delhi and Mumbai will see 30-35 small-format stores begin operations by that time.

"Over three years since then we should have around 500 stores across the country," a company source said. A key component of the strategy will involve two distribution and logistics centres in north and south.

That Reliance has big plans for its retail foray is well known. But the impact it will have on the market and the competition is not fully understood yet, considering the facts such as it already employs 30,000 people, a number which the company says will grow to 5,00,000 (direct and indirect) ultimately at an investment of Rs 25,000-30,000 crore.

The 30,000 staff on the rolls has a large expatriate component from global retail giants like Wal-Mart, Carrefour and Tesco. Reliance Retail would take organised retail to the next level, Arvind Singhal, chairman, KSA Technopak India, said.

"It is going to reflect how much organised retail will benefit all strata, though there will be some losers. It also shows how Reliance Industries has lived up to its reputation for fast execution of projects," he said.

That retail team, led by Mukesh Ambani and Manoj Modi, includes senior executives like Gurinder Kapoor, Sanjeev Asthana, Raghu Pillai and Rajkumar Pugalia. The choice of Hyderabad as the launch city is interesting.

The city has an established organised retail presence, including the popular Foodworld chain. It also has some home-grown standalone stores such as Trinethra and Hyderabad Central.

Organised retail in the country is estimated at $6 billion and is projected to grow at 20-25 per cent a year.