ibnlive » Business

Mar 06, 2008 at 08:53pm IST

AB group to launch 10 Megastores next year

Vadodara: It’s now Aditya Birla Group’s turn to get into the hyper market foray, a move that comes one year after the company launched More Megastores in tier-two cities.

With an average size of 80,000 sq feet, the hyper marts will stock about 60,000 Stock Keeping Units (SKU) or types of merchandise.

The Vadodara store is the second megastore, the first being Mysore. The company says in the one year since the operation began, expansion has been on track.

“We now have 430 super marts across the country and this is our second More Megastore which is a hyper mart. We will end the year with 500 super marts so it has gone very much as per our expectations,” Chairman Aditya Birla Group Kumar Mangalam Birla says.

But most of the stores have come up in tier-two cities because of high real estate cost which is Indian retail’s biggest problem.

“We are having to work our models around that and make sure that we get to numbers that are higher real estate numbers,” the CEO Aditya Birla Retail Sumant Sinha says.

Translated that means: Don’t expect to see a More Megastore in Mumbai, New Delhi or any of the large cities anytime soon, though sources say Gurgaon will get one this year.

Another problem that Indian retailers faced last year was the protest from traders and middlemen against the growth of organised retail.

The group says it will include the community in its business plan very soon.

“All of them will be a part of the value chain in one form or the other. They will all gain, at least in terms of selling to better quality and larger customers,” he says.

Upon being asked whether he is looking at bringing the trader community in officially by hiring them or making them his operation’s sourcing agents, Birla said it’s something he would look at “favourably”.

Even as Aditya Birla Retail deals with issues, it says growth will not slow down and expects ten more Megastores across the country next year along with new format stores.