Spencer's Chennai hypermarket may not materialise

The Chennai launch of RPG's Spencer's hypermarket has been delayed because of legal constraints related to the location the group had initially selected.

A Spencer's hypermarket was expected to come up in Kodambakkam, near Bharani Studio. J H Mehta, president, Spencer's Retail, told Business Standard, "There were legal issues involved with the property where the hypermarket was supposed to have come up and we have decided to set up the hypermarket elsewhere."

When asked about the choice of the new location of the Spencer's hypermarket in Chennai, Mehta said that the company officials were working on finding a suitable location, taking into account various factors including accessibility.

But real estate sources said that the hypermarket of 50,000 sq ft, planned in Kodambakkam, had been scrapped. It usually takes 12 to 15 months to construct a hypermarket. An estimated outlay of Rs 10 crore to Rs 20 crore is required to set up a hypermarket, depending on the city and the location.

To promote hypermarket in the country, RPG had independently floated the Great Wholesale Club, which has been renamed as Spencer's. The first hypermarket by Spencer's was floated in 2001 in Hyderabad with the name Giant. Eventually, this also was renamed as Spencer's.

After the split with its joint venture partner Diary Farm a couple of months ago, RPG Enterprises expects to set up seven more Spencer's hypermarket during current fiscal. RPG, along with Diary Farm, had launched the first organised food and grocery retailing as Foodworld.

Spencer's hypermarket stocks about 25,000 of products including groceries, consumer durables, garments and furniture. It caters to end consumers, institutional buyers and large fraternity of small businesses like retailers, eateries, hotels and restaurants.