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Reliance retail arrives in Hyderabad

Last updated on: November 03, 2006 11:49 IST
Reliance Industries Limited formally entered the country's fairly young organised retail market through its Reliance Fresh format stores in Hyderabad on Friday while reassuring petty traders that the company was no threat to them.

In fact, the company's retail format for selling vegetables, fruits and groceries, offered an opportunity for neighbourhood stores and even push cart sellers to source supplies at competitive rates making it a win-win situation for all, RIL officials claimed.

"They (Kirana stores and push cart sellers) will benefit from us... the argument that they will be affected is not supported by numbers," RIL President and CEO (Operations and Strategy) Raghu Pillai told reporters just before the inauguration of the first Reliance Fresh retail outlet in the upmarket Banjara Hills in Hyderabad.

Reliance Fresh, 10 more of whose outlets were inaugurated on Friday, marks the front-end of the company's much larger agriculture initiative that involves setting up farm product sourcing centres, supply chain and finally retailing.

The neighbourhood format has been designed keeping the needs of homemakers in mind and stocked with a wide variety of vegetables, fruits, eggs, dairy products and groceries and priced competitively, Pillai said.

"We are not harming small retail players... the market is growing by 8 per cent which is $24 to $25 billion (nearly Rs 1,12,500 crore or Rs 1,125 billion) every year... we are aiming at revenues of only $25 billion in four years... even if the market grows by $100 billion by 2015, organised retail would be still less than 10 to 12 per cent of retail trade," he said.

In fact, all the 11 stores that were opened on Friday were inaugurated by homemakers.

The roll-out of Reliance Fresh would be followed by other formats -- a nation-wide chain of hypermarkets, supermarkets, discount stores, department stores, convenience stores and specialty stores at an investment of more than Rs 25,000 crore in (Rs 250 billion) the next five years.

RIL's Board had approved the retail venture early this year.

Having already created the supply chain, the company would ultimately look at supplying to small time kirana shops
and push cart sellers by setting up a separate structure to cater to this segment.

Asked whether the company would come out with an initial public offer to mobilise funds for the retail venture, Pillai
declined to comment but said resource would not be a constraint.

The launch of the neighbourhood store in Hyderabad would be followed by the opening of mega stores in Mumbai, Delhi and Ahmedabad, besides luxury stores across the country.

The company is already in talks with global luxury brands like Gucci and Calvin Klein and some Japanese consumer
durables brands in this regard.

Reliance expects to take its retail formats to 784 cities and towns, besides over 6,000 rural 'mandi' towns by 2010,
with over 100 million square feet of retail space. 

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