After exiting two of its retail ventures earlier, the K Raheja Corp-owned hypermarket chain HyperCITY today said it was dropping its food retail format, GourmetCity, as it was not meeting its business targets.
The existing GourmetCity was located at Inorbit Mall in the Malad suburb of Mumbai, one of the most successful malls owned by the Raheja group. Initially, HyperCITY was planning to set up eight GourmetCity stores in metros, with an area of 10,000 sq ft each.
But, due to problems with business viability, the company has decided to exit from the concept and has decided to focus on its successful flagship format, HyperCITY.
“GourmetCity was a futuristic store concept created as part of our innovation and expansion plans, but the return on investment does not make the business feasible,” HyperCITY Vice-Chairman B S Nagesh said.
Early this year, HyperCITY pulled out of a catalogue retailing venture with UK’s Home Retail Group under the Hypercity-Argos brand, as it “...could not meet planned performance levels (and) to support investments required in the current economic climate”.
HyperCITY had also exited the supermarket format called HyperCITY Express, as it found the venture was not cost-effective. “Indian shoppers still prefer traditional forms of retailing. New formats are yet to catch up in the country,” said a Gurgaon-based analyst.
After its experiments, HyperCITY said it had re-strategised its business plans and would continue to focus on HyperCITY. The company plans to add four more large stores in the coming year to take its store tally to eight.
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“We open stores without much information but when we close them, we have complete knowledge about operations. We cannot say new formats do not work in India. Crossword is a successful format,” Nagesh had told this newspaper earlier.
After two years of much-hyped growth in the retail sector, many retailers closed hundreds of stores and pulled out from joint ventures, as the economic slowdown forced shoppers to curb spending. While players such as Reliance Retail and Aditya Birla Retail closed many stores, Kishore Biyani’s Future Group ended its tie-ups with Italian brands Etam and Replay.