Pune: In another sign of the attraction the organized retail business in India has for companies large and small, Wadhawan Food Retail Ltd, the company behind Mumbai’s Spinach chain of convenience stores said it proposes to launch a chain of hypermarkets. And, in an effort to leverage the entry of other companies into the retail business, it will build warehouses and a cold chain that can handle perishable merchandise, says Wadhawan chief executive officer Dipankar Halder.
He added that the warehouses and cold chain would probably be built in association with a foreign company that was already in the business in India.
Several companies are betting big on the organized retail business in India, which is worth around $12 billion (Rs52,800 crore) and growing at 40% a year. Big business houses such as Reliance Industries, Bharti Enterprises (in association with Wal-Mart Stores Inc.), and the Aditya Birla Group have launched, or are in the process of launching their retail chains.
As retailers move rapidly to expand their network, a cold chain will be critical to operations and profitability. “We figured out that if we are setting up a cold chain for our captive use, it would make better sense to make it an additional revenue stream by offering the services to other companies as well,” said Halder .
Wadhawan’s hypermarkets, he added, would open for business in the next six to nine months. These stores would be 30,000-1,00,000sq. ft depending on the density of the city’s population. Halder said that the company could launch its business from a non-metropolitan city because real-estate costs in cities such as Mumbai were very high.
Wadhawan is also gearing up for the next phase of Spinach’s expansion with the launch of 20 stores in Pune.