Indian retailers are an optimistic lot when it comes to deciding on expansion plans for 2009. Retailers such as Spencer's Retail, Future Group, Shoppers Stop, Westside, Wills Lifestyle, Bata India, and Raymond find the 30-40 per cent drop in retail rentals a reason to cheer.
The retailers also anticipate a further drop in rentals in 2009 and flexibility from mall-owners to help tide over the slump in consumer spending.
Although most retailers held back expansion plans in 2008 and some even closed down unviable stores, most are optimistic about 2009 which is expected to see some momentum. Spencer's Retail, which closed down and relocated 56 of its unviable stores recently, will set up 300 more stores till 2010 for an investment of Rs 500 crore. Currently, Spencer's has 700 stores, commanding a retail space of 2.5 million, which will see addition of another 1.3 million sq ft by 2010.
Samar Sheikhawat, VP marketing, Spencer's, says, "We will also expand our private labels in terms of more variety and options. This will ensure that sale of our private labels make up almost 35 per cent of our revenues, from 25 per cent right now. We are also working on offering more quality products whose price points will be more affordable." Future Group plans to reach 24 million sq feet of retail space by June 2011, up from 8.6 million sq feet right now.
According to Kishore Biyani, MD and CEO of Future Group, the company will concentrate on introducing private labels with high profit margins, in segments ranging from toothpaste to shampoo to butter.
"Another thrust area will be entering into new segments like rural retail and telecom products distribution. Through 'Aadhar' we can ramp up rural retail, which is outside the 20 per cent of the population we have been targeting so far," said Biyani.
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Atul Chand, divisional chief executive, Wills Lifestyle, the retailing arm of ITC, said, "New and emerging retail markets and formats in tier II & III cities offer us the opportunity to expand our presence and we will be leveraging this opportunity both for Wills Lifestyle and John Players over the next year. In the coming year, we see our total retail space going up by around 15-20 per cent to better cater to the needs of the youth with an eye for fashion." Currently, the country has over 50 Wills Lifestyle stores.
Shopper's Stop plans to invest Rs 1,000 crore for expanding its existing store space of 1.3 million square feet to 2.7 million square feet over the next 3-4 years.
According to Shopper's Stop Managing Director B S Nagesh, "The next three-four quarters are not going to be the best of quarters and India cannot isolate itself from what is happening in the world. But there is no change in our investment and expansion plans." Footwear retailer Bata India plans to set up 60 stores in 2009 across the country using cash accruals, said Marcelo Villagran, managing director of Bata India.
Garments retailer Raymond plans to open 50 more stores in tier II & III cities. Currently, the company has 390 stores, of which 60 are owned by the company. According to Aniruddha Deshmukh, president, retail and FMCG, Raymond, the ongoing economic downturn has not impacted the company in a big way and its retail stores have seen revenue growth of 12 per cent in recent months. Tata Group's retail arm Trent, which operates Westside, plans to add 8-10 stores every year. Currently, it has 31 stores in India, informed Smeeta Neogi, head-marketing of Westside.