Mukesh Ambani-owned Reliance Retail is looking to new avenues to facilitate growth and increase revenues.
Reliance Retail says it is keeping a close eye on the competition from both other retail chains and neighbourhood stores. It is also identifying certain places at which it hasn’t been doing as well as these local stores and converting large hypermarket stores into wholesale cash-and-carry stores.
“Reliance Retail continues to evaluate its offerings and realign them in specific locations in order to establish sustainable relevance of the business within the consumer ecosystem,” said a company spokesperson.
Reliance Retail is pursuing its interest in the cash-and-carry domain with renewed gusto. After stepping into this business with a store in Ahmedabad in 2011, it monitored the performance and opened the next store more than two years later in Bangalore. In under a year, the chain has opened 12 new cash-and-carry stores with plans to open more in the coming time.
According to analysts familiar with the retail sector, the cash and carry format is projected to become a $22 billion segment by 2017.
The cash-and-carry business generates much higher volumes – as customers buy in bulk, albeit at lower margins – with lower operational costs for the retailer. It can be low-frills in terms of look and feel, but they save on logistics costs as companies and distributors supply merchandise directly to store.