Don’t miss the latest developments in business and finance.

Carrefour braces to expand India footprint

Image
Nivedita Mookerji New Delhi
Last Updated : Jan 21 2013 | 12:53 AM IST

Carrefour is preparing to break its nearly year-long silence in the India market. The French retail chain, the world’s second largest with revenues topping euro 90 billion, is finalising lease deals across 10 to 12 sites in India to open cash-and-carry (wholesale) outlets, according to market intelligence.

It was in December last year that Paris-based Carrefour launched its first India store — a cash-and-carry outlet — in the national capital. In fact, that has since been the only cash-and-carry format store in Asia from its stable, as Carrefour did not expand in the country thereafter.

Of late, though, the hypermarket giant is positive on the expansion plans in India, according to an industry insider tracking the development. “I have already leased several sites in the country. For some others, they are in advanced talks,” he told Business Standard. “These will be operational in a staggered timeline.”

The 1959-founded retailer is expected to launch a store in Jaipur soon, according to another industry representative. While he said the Jaipur store could be launched as early as next month, two others indicated that the rollout could happen early next year. An outlet in Pune is likely to follow the Jaipur launch. These outlets would be spread out across 60,000 to 75,000 sq ft space each, as per market information.

A questionnaire sent to Carrefour on its expansion plans remained unanswered.

Last month, after the retailer’s third-quarter result, its CFO Pierre-Jean Sivignon revealed that the company would pursue its growth ambitions in key emerging markets. “In the increasingly uncertain and volatile context, we are focusing our efforts on the four key priorities,” he said, and emerging market initiative was listed as one of them. The chain operates in 32 countries and has 9,500 stores (including joint venture outlets with franchisees and partners).

Recently, Purnendu Kumar, associate vice-president of Technopak (a consulting working in the retail space), had said the first store must be seen as a pilot project. “People take time after the first store to launch their second,” he told this newspaper, citing the example of other players like Walmart and Metro. Both had taken a break of several months before expanding their respective chains.

More From This Section

Anshuman Magazine, who is CMD (South Asia) of CB Richard Ellis, commenting on the expansion plan of retail majors in India, said India would see a significant increase in larger-format shopping spaces in the next few years.

Among the other foreign cash-and-carry players operating in India, US-based Walmart, in a JV with Bharti Enterprises, has rolled out 12 stores in the country since its first in May 2009. German retail giant, Metro, has opened seven cash and carry stores in India since its foray in 2003, Carrefour has only one since its launch in December 2010. As for expansion plans, Walmart is planning 10 to 12 every year. As for Metro, it is looking at 50 stores in four to five years. Carrefour has not made any announcement on its expansion plans.

While both Carrefour and US-headquartered Walmart are keen on entering the multi-brand retailing in India once the regulations are relaxed in the India market, Metro wants to stick to the cash and carry format. Walmart has partnered Bharti in its retail initiative, but Carrefour is yet to firm up on its partner.

A buzz is on about Carrefour’s likely venture with the Future Group, but there is nothing formal or official about it yet.

In India, FDI is not allowed in multi-brand retail, but there’s no restriction on foreign investment in cash-and-carry business. Cash-and-carry refers to selling wholesale to retailers, hoteliers, offices and businesses. In single-brand retail stores, FDI up to 51 per cent is permitted

The cash-and-carry market in India is estimated at around $140 billion, out of the $350 billion retail business in India.

Also Read

First Published: Nov 09 2011 | 12:23 AM IST

Next Story