The world's largest retailer, Walmart famed for its large deep discount stores, will cut down the size of its super marts to about 50,000 sq ft in India - about a fifth of the average size of its stores in the US.
The decision to scale down the store size comes at a time when the company is busy chalking out a strategy to enter the lucrative multi-brand retail business of India after the government allowed foreign direct investment (FDI) in retail sector.
The company reasoned out the rationale for a smaller store format within India as an effort to remain closer to their target customers, and on the availability of space.
"In order to have a store spread across several lakh square feet, we would have to locate them on the outskirts of a city. In the Indian context it will not be the right thing to do so," said Raj Jain, president Wal-Mart India.
Jain said the company's internal research show that people do not wish to travel for more than 15 minutes to make their monthly purchases. "In this scenario having multiple stores will make more business sense," he said.
He refused to divulge further details about the number of stores on anvil or the quantum of investments being planned. "It is too early to comment on the specifics. It is just a week when the FDI policy has been notified by the government."
Walmart is already in a tie-up with Bharti Enterprises wherein it operates 18 cash-and-carry wholesale stores. "Our partnership with Bharti will continue for the cash-and-carry business but it is too early to comment on our retail venture," he said.
The company said it does not want to directly compete with the local kiraana store operators that would always have the advantage of serving consumers at their doorstep. "We will instead focus on the monthly purchases made in a family, which is one third of the total grocery bill of an average Indian household," said Jain.
He also said that the company has no intention of starting a home-delivery model.