Retail giant Future Group is giving a big push to Big Bazaar, which is the largest hypermarket chain in the country with 132 stores. The group plans to spend Rs 600 crore to set up an additional 60 Big Bazaar stores within 18 months. In an interview with Raghavendra Kamath, Pantaloon Retail Director and Future Retail Chief Executive Officer B>Rakesh Biyani discusses the company’s plans and the road ahead. Excerpts:
What are your plans for Big Bazaar and Food Bazaar?
We want to add 80 to 100 more stores to the current tally of 190 stores in the next 18 months. We have a good team as well as the products and systems & processes to drive fast growth.
What happened to your plans of listing Big Bazaar?
Big Bazaar is now operated by Future Value Retail India Ltd (FVRL), which is a 100 per cent subsidiary of Pantaloon Retail. As of now, there are no plans to list FVRL. We have raised resources to fund expansion plans for the next 12 months.
What is the kind of growth you are seeing in the business?
Last fiscal, our retail verticals did a business of more than Rs 9,000 crore. This year, we are working to grow by 35 per cent. Both value and lifestyle segments are delivering good same-store growth. We have also seen a very good revival in growth of our home retail divisions. All our efforts to simplify our business verticals and processes have improved all retail operating parameters.
There is a lot of confusion about your restructuring...
We want the group business to be in the verticals of retail, finance & capital and support. With the various mergers and de-mergers, we have aligned our retail business into lifestyle and value retail. All non-core, non-retail activities have moved out or will move out of Pantaloon Retail. We believe this will deliver a better understanding of our business verticals and increase the value for stakeholders.
How do you look at the competition in the hypermarket business, where you were one of the first-movers?
India is very large market. There is space for a number of retailers. Big Bazaar has the biggest footprint in the country currently. As I mentioned earlier, we have invested in our product offering and delivery. Our scale is allowing us to consistently deliver superior value to our customers. Footfalls (customer entry) continues to grow in our stores.
You seem to focus on only a few formats now, versus many ventures earlier...
Indian was a nascent retail market. Future Group has always been willing to test categories that can increase consumption in our country. We have decided to focus on Big Bazaar, Food Bazaar, Pantaloons, Brand Factory, Central, KB's Fair Price, E-Zone & Home Town. These concepts have matured and we want to accelerate growth of these concepts. We also continue to invest in growing the sports retail business of Planet Sports. We will continue to try new consumption categories in the future, too.
How long will you carry on the offers and discounts in Big Bazaar that have a negative impact on your margins?
Discounts and offers drive consumption by making products affordable for many more consumers. We have the scale and are working very closely with our vendor partners to deliver products at prices that drive more volumes. This approach is an integral part of the Big Bazaar strategy and, thus, does not have any negative impact on our margins.
