31.5.09

Bharti Wal-Mart opens first store


Bharti Wal-Mart, an equal joint venture between world’s largest retailer Wal Mart and the Bharti Group that owns India’s largest telecom company by sales, on Saturday said its first Indian cash-and-carry store will give up to 25% discount over the local wholesale market. With this, Wal Mart becomes the second foreign retailer after Germany’s Metro to start cash-and-carry operations in India. UK retailer Tesco’s and France’s Carrefour are also planning to set up wholesale stores in India. Government policy currently bars foreign companies from setting up retail chains in India. Bharti Wal Mart will sell cereals 2-5% cheaper, daily household products 10% cheaper, and higher-margin apparel and general merchandise 25% cheaper. At the inuguration of its Amritsar-based store, that cost over $6-7 million, excluding real estate expenses, the company didn’t specify by when the store would break even. “We are not worried about profitability now. We are focused on serving cheap products to our customers. If we can have satisfied customers, profits will flow in,” said Bharti Wal-Mart CEO Raj Jain. “There is a crying need for cash-and-carry business in India,” Bharti Enterprises MD Rajan Mittal said. Retailers can choose from 3,000 stock keeping units (SKU) in the Bharti Wal-Mart store compared to 700 SKUs in a typical wholesale store, he added. The 50,000-sq-ft Amritsar store has already got 30,000 kirana stores, hotels, restaurants, and offices signed up as members out of a potential 75,000 members in 25-km radius, Mittal said. The company has 800 suppliers, of which 80% are from Punjab. The store employs 200 people, including 60 from the company’s retail training school in the city. The company plans to roll out 15 such stores over three years in Punjab, Haryana, Delhi and Uttar Pradesh.

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