Retail therapy for inflation
Walmart, the world's largest retailer with plans to enter India if the government were to allow foreign investment in the sector, sees a role for itself in keeping food prices in check.business Updated: Jan 27, 2011 23:44 IST
Walmart, the world's largest retailer with plans to enter India if the government were to allow foreign investment in the sector, sees a role for itself in keeping food prices in check.
"We have a plan through our tie-up with Bharti Enterprises to link up with 35,000 small farmers by 2015 to supply our cash-and-cash and Bharti's retail outlets. Once we have our own retail operations, we would invest billions of dollars in logistics and cold chain infrastructure," president and CEO of Walmart International, Doug McMillon, said at the World Economic Forum's summit on Thursday.
India, the world's second largest producer of fruit and vegetables, loses a quarter of its produce between the farm and the table. Nearly 7% of Indian grain rots in fields and granaries. Indian farmers get a mere third of the price the consumer pays in contrast to two-thirds of the final value earned by their counterparts in countries that has big retail.
McMillon said permitting large retail chains would help address food inflation while benefiting farmers in India.Walmart also allayed fears that allowing foreign direct investment (FDI) in retailing would squeeze the local grocer out of business. India permits FDI in single-brand stores and cash-and-carry outlets that sell to only to retailers and businesses. Giving Mexico's example, McMillon said, "We entered in 1991. Even after 20 years, 50% of retailing there is done informally."
Walmart now runs six cash-and-carry wholesale outlets in India under the "BestPrice" label, while Bharti Enterprises has around 100 of its independent 'Easy Day' retail food and grocery stores.
This correspondent's travel and hospitality was paid for by CII.