India’s Aditya Birla Retail group is changing gears on its store roll-out plans, announcing it will dramatically increase its hypermarket numbers while reassessing its supermarket strategy.
At the opening of the company’s new More-brand hypermarket in Thane yesterday, CEO Thomas Varghese said the company was taking a more realistic approach to its expansion in light of its failure to meet earlier targets.
“We want all our stores to be profitable by 2012. We are becoming realistic now,” Mr Varghese told the Business Standard.
“We may not achieve the earlier target, as we have slowed down significantly and closed down many of our unprofitable stores. There is no point in making losses for long.”
Aditya Birla had previously planned to hit almost 1,500 supermarkets and 150 hypermarkets by 2010, but currently only has 632 supermarkets and five hypermarkets.
In fact, the company has closed 70 of its supermarket chains this financial year as a result of high rents and low sales, and more closures of unprofitable stores are on the horizon.
Mr Varghese said the retailer would for the moment focus on increasing the numbers of its More and More Megastore hypermarkets.
“We will add at least 10-12 hypermarkets every year,” he told the Business Standard. “We will consolidate and deepen our cluster approach in case of our supermarkets. Once we sort out our supermarket strategy, then we will open 100-150 supermarkets a year.”
“We are focusing on our hypermarket format where we can introduce more stock keeping units (SKUs) to churn out more profits from large shop formats.”
Aditya Birla’s hypermarket formats have 13 private labels, and 320 SKUs in the FMCG segment.
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