Date:06/10/2006 URL: http://www.thehindubusinessline.com/2006/10/06/stories/2006100601311200.htm

Back Reliance Retail gears up for launch

Vinay Kamath

Grocery retail, hypermarket to follow soon

Chennai , Oct. 5

Reliance Retail's much-anticipated foray into fruit and vegetable retail is expected to be kicked off on October 18 in Hyderabad, despite reports of a delay in the launch, according to a senior official of the group. As the first step of Reliance's Rs 25,000-crore foray into retail, five stores are expected to be flagged off in this format before the group embarks on a furious roll-out phase.

The group expects to have at least 30 Reliance Fresh stores up and running in Hyderabad in the next few months and will sell at least five tonnes of fruits and vegetables a day. The produce, all priced to market, will be sourced from all over the country, as well as the hinterland of Andhra Pradesh and Maharashtra where the group has tied up with many farmers, say sources. While the Fresh stores will span 4,000 sq ft, its Fresh Plus stores, which will retail grocery and consumer goods apart from vegetables, will be larger formats ranging between 4,000 sq ft and 10,000 sq ft. After Hyderabad, Chennai is expected to be the next to see Reliance Fresh stores in a month from the Andhra launch.

To open 6 clusters in AP

Sources in the Hyderabad realty business say that Reliance is expected to open six clusters in Andhra Pradesh, across the major cities of the State, which will be the hubs for its retail operations. Hyderabad was chosen as the launch base as it is among the cheapest cities for rentals and properties are available easily.

Closing following on the heels of these two formats will be Reliance Mart, its planned hypermarket chain, the first of which will open in Ahmedabad in December in 1.5 lakh sq ft of space. The group expects to have at least 20 hypermarkets up and running in a year, says a source. Positioned as `value shopping,' Reliance Mart "will challenge everybody's prices," says an official.

Reliance, according to these sources, is investing substantially in its backroom and supply chain, especially in a cold chain. The group has also tied up with FMCG manufacturers and while negotiating for much higher margins, is looking to take stocks direct from the companies themselves. Industry sources say that the big daddy of FMCG retail, HLL, too, is investing in people and systems to service Reliance as the offtake of consumer goods from HLL is expected to be huge.