Kishore Biyani’s Future Group plans to start selling its private labels, including in apparels, food and groceries, to kirana stores in rural and semi-urban areas in the second half of this year, according to a top company executive.
At present, the group’s private labels comprise 10-35 per cent of store sales. The move will increase the presence of its labels and garner more business for the group.
The group was also expected to start its wholesale distribution business from the next quarter, said a source. Future Logistics, the group’s logistics arm, was expected to start operations by January 2009. But economic slowdown delayed the launch, sources said.
The company would distribute products in food, apparel, luggage, grocery and other categories to organised retail chains in the country and expected a business of Rs 1,000 crore in the next three years, sources added. The group is also in talks with a couple of international brands to distribute their products.
As for expanding private labels to mom-and-pop stores, these are expected to be reached through the group’s low-cost stores such as KB’s Fair Price and Aadhaar, the rural retail chain.
“Currently, our store brands are in the top three slots in the categories we operate in. We have tested the wholesale distribution channel in our stores such as KB’s Fair Price and Aadhar. We will take this initiative outside the Future group in 2009,” said Damodar Mall, group customer director, on the sidelines of Food Forum India.
The Future Group runs more than 150 KB’s Fair Price stores, a chain of no-frills stores, in cities such as Mumbai, New Delhi and Ahmedabad and plans to open 1,500 more in the next 18 months. It plans to grow its rural retail venture, Aadhaar, in 800 towns and villages in the country in the next couple of years, from around 60 towns at present.
Mukesh Ambani’s Reliance Retail is also planning to sell its private labels to mom-and-pop stores. Initially, the group would sell private labels in apparels and later those in food and grocery items, Mall said.
Late last year, the group has announced a plan to become a Rs 10,000 crore consumer products major in the next four years by launching new brands in the fast moving consumer goods sector, consumer durables, electronics and apparel, in anticipation of down-trading as economic growth slows and also to take advantage of a slump in commodity prices.
