Plans an overall investment of nearly Rs.600 crore
Spencer’s Retail, which recently underwent a painful year-long cocktail of rationalisation and consolidation, is now ‘ruthlessly focussing’ on the hypermarket format of stores, according to family scion Shashwat Goenka, the new head of RP-Sanjiv Goenka Group’s retail arm.
The Kolkata-based company has chalked out an aggressive strategy, which will see an overall investment of nearly Rs. 600 crore, to open nearly 12 such hyper stores by the end of this year, and over 50 more over the next few years. The investment will come from internal accruals. “We believe the hyper stores to be a sort of end-game in our operating model. There were problems in the cost structure of our convenient stores. This is not to say our existing smaller stores will not serve a purpose, we will get to them after we achieve profitability in the third quarter of this current fiscal,” said Mr. Goenka, in an interaction with The Hindu .
The company will open its first major hyper store here on Friday.
“We plan to operate a franchisee model in our smaller stores while including local kirana store owners,” he added.
Hyper stores, which contributed 58 per cent of the total turnover of Rs. 1,400 crore in 2012-13, are expected to chip in 70 per cent in 2013-14. The retail chain, which is in the process of being demerged from CESC and listed, is also planning on selling a stake in the company soon, and is presently in talks with several strategic investors.
Replying to a question on foreign direct investment in multi-brand retail, Mr. Goenka pointed out that many of the ‘so-called cloudy issues’ over the specific norms were not hampering investment.
“I think if companies really wanted to come in and invest, they should be able to work around any of the problems. While some people have talked to us, we mostly won’t see any foreign investment in the industry any time soon.”