Reliance Retail will open stores in more small cities and towns over the next year under aggressive expansion targets that the Reliance Industries unit has set for itself.
“I have set our leadership a target of 30% growth each year over the next decade,” chairman MukeshAmbani told Reliance Industries’ shareholders while explaining the retail unit’s performance.
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Reliance Retail, the retail arm of Reliance Industries, reported 65.8% rise in pre-tax profit at Rs 398 crore for the first quarter ended on June 30 2017.
The turnover in the quarter under review jumped by 73.6% to Rs 11,571 crore compared to Rs 6,666 crore in the year-ago period, Reliance Industries said in a regulatory filing.
Reliance Retail opened 371new stores last year, which it claimed was an unprecedented expansion in the retail industry in India. Across formats the retailer has stores across 702 cities with an area of over 13.5 million square feet which includes 344 Trends stores across 186 cities and 1996 Digital stores, according to the company’s annual report.
“Our business strategy for retail is simply single-minded focus on customer satisfaction and value. We execute this strategy through use of technology, scale and spread,” Ambani said.
Also, Reliance Trends, the fashion business of the company, attracted 7 crore customers last year. The company plans to add around 500 outlets across segment in 2017-18.
Even as the ecommerce behemoth Amazon.com prepares to enter the food retail business in India, Reliance Retail is confident of becoming India’s top online grocery retailer by 2020.For the financial year 2017, Reliance Retail’s grocery retail consumption basket had a 32% revenue share of the Rs33,765 crores total turnover of the retail business.
The Reliance Fresh brand of neighbourhood stores, large destination supermarkets under Reliance Smart and the wholesale cash & carry stores of Reliance Market all grew over 25% in fiscal 2017.
“The full stream action on home delivery will be seen this year. The design will feed off from our store network,” said Damodar Mall, chief executive officer, Reliance Retail.
Reliance Fresh and Smart stores undertook productivity improvement initiatives and witnessed strong uptake in same store sales growth. Reliance Market continues to focus on innovation and planning, better assortment and channel development. These initiatives have resulted in strong growth in Kirana and HoReCa customer segments.
Earlier this month, Department of Industrial Policy and Promotion (DIPP) approved e-commerce giant Amazon’s $500 million proposal for food retail in India. In all, the government received investment proposals worth $695 million from three companies—Amazon, BigBasket and Grofers.Amazon India has been piloting groceries delivery since February last year through an app called Amazon Now.
Reliance Retail’s online journey began nearly two years ago with Reliancefreshdirect.com which got rebranded to Reliance Smart.in last year. The retailer also announced a tie-up with Grofers India for the record.
The online foray was further boosted by its Jio broadband services. “The first phase of Jio was rapid establishment of consumer base and network. Now the synergies will kick in. Jio will differentiate us as a retailer this year,” said Mall.
Mall claims that the basket sizehas gone up with the online drive.
The Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. Globally, India is fifth-largest global destination in the retail space and is growing at a rate of 12% per annum, according to a CARE Ratings report.
Retail Industry in India constitutes over 10% of the country’s Gross Domestic Product (GDP) and around 8% of the employment and is valued at $672 billion.