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Hypermarkets Expanding Faster with Lower Rents

After being hit by the recession for a while, the things seem to be looking up in India again with large retailers like Future Group, Aditya Birla Retail, Reliance Retail, Tata's Trent, RPG group's Spencer's, encouraged by the falling rentals, are planning to expand aggressively to open new Pan India hypermarkets.

The big chains are planning to open around 75 Hypermarkets, a larger version of supermarkets with an area of more than 20,000 sq ft. In the past year or so, several retailers had closed unprofitable stores and put growth plans on the backburner because of the economic slowdown which had severely dented consumer confidence in urban markets.

Leading the pack in opening hypermarkets is Biyani's Future Group, which is opening six Big Bazaars between this month and the next, and 40 new ones in the next year. The group has 115 of these now and plans to do a business of Rs 5.5 Billion in the current fiscal year as compared with Rs 3.7 Billion during the year that has just ended.

Aditya Birla Retail's More, which had only two hypermarkets so far since it entered retailing in the past two-and-a-half years, is planning to open a hyper every month. It is opening a new one at Aurangabad in Maharashtra this week, besides he existing ones in Mysore and Baroda, reports Business Standard.

"We had plans for hypermarkets. The reason they got delayed is high property prices. As soon as rentals came down to reasonable levels, we signed new properties and are launching new stores,'' said Thomas Varghese reportedly, chief executive of Aditya Birla Retail.

Owing to less demand from retailers, who had put their expansion plans on hold, mall rentals have fallen up to 50 per cent compared to their peak in 2007-08 and this is helping retailers to expand now.

Source: DelWine

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