Tatas get hyper on retail, to invest Rs 2,000 cr
After taking cautious strides in the retail sector, the Tatas are going for aggressive expansion plans. Trent, the Tata group company headed by Ratan Tata's half brother, Noel Tata, is set to invest over Rs 2,000 crore in the hypermarket (discount stores) business over the next five years.
More Star Bazars, Trent's discount stores, will spring up in metros and non-metros where its rival Future group's Big Bazaar has already made a domineering presence. "We are planning to set up 50 hypermarket stores by 2012-13," said Noel Tata, managing director, Trent.
On Friday, Trent hasopened its second discount store in Mumbai's upmarket Andheri. Trent chose Dahisar, North Mumbai's bustling suburb, to start its first hypermarket store in September 2007.
It started its hypermarket journey from Ahmedabad in 2004, where Mukesh Ambani's Reliance Retail has a mega 1 lakh sqft discount store. Star Bazaar has an area of 50,000 sqft, where it stores over 2.5 lakh products ranging from fruits and vegetables to home appliances and cosmetics as well as garments.
"Despite high inflation, we are able to control prices of our products. This helps us to provide products at competitive prices," Tata said. However, there seems to be a lot of catching up left for Trent, which reported consolidated revenues of Rs 716 crore for 2007-08, when it comes to hypermarket business, according to retail analysts.
Big Bazaar, which has 91 stores, will add 60 new stores by June 2009, while Vishal Retail, which has 119 stores already, has plans to add 90 more stores this year, of which 19 have already been opened.
Retail pundits say that Trent's journey till now in the organised retail market has been somewhat slow, in comparison to other players.
Arvind Singhal, chairman of retail consultancy firm Technopak Advisors said, "I would call it very cautious but not necessarily slow. Westside and Landmark are good formats and though it is too early to comment on Star Bazaar, Trent is running a good and steady business."
Trent shares were closed at Rs 437.50 up 2.34 per cent or Rs 10 at the Bombay Stock Exchange on Friday.
With Trent's expansion plans, the Tata group will become a force to reckon with in the organised retail industry, which constitutes only roughly 7-8% of the total retail industry. The Tata group operates another retail company called Infiniti retail, which runs Croma, a chain of consumer electronics and durables. The group has teamed up with Australia's largest retailer Woolworths for supplying products to Croma stores.