New Delhi: HyperCity Retail (India) Ltd may roll out as many as 300 smaller grocery stores in the next four years even as it adds hypermarkets, as modern retailing starts moving into selling fresh produce.
The company plans to open the grocery stores, which will be called Express City and sell vegetables, fruits and food items, in more than 50 cities by 2010, according to a senior company executive who did not wish to be identified.
Currently, HyperCity operates just one 120,000 sq. ft hypermarket in Mumbai. It plans to open another by the end of the year.
The official declined to give details of investments but said the grocery stores would be spread over 3,500-5,000 sq. ft, adding that the company proposes to roll out two dozen such stores in various cities by December.
“We are continuously doing feasibilities on various retail formats. One of many feasibilities being explored is a small format grocery store,” said Andrew Levermore, chief executive of HyperCity, in an emailed response when asked to comment on the plans.
“It is way too early to speculate if this may go ahead and how many outlets it may be or how long it will take,” he added.
Levermore said the company has the “board’s mandate” to expand the number of hypermarkets to 68 across 45 cities in the next six years. Levermore declined to give the size of the investment but said it will be funded through a combination of equity sales, internal accruals and borrowings.
HyperCity is a unit of Mumbai-based real estate-to-retail company K. Raheja Corp., which owns the country’s largest chain of department stores, Shoppers’ Stop Ltd.
Earlier this year, the alliance of Shoppers’ Stop and HyperCity tied up with Britain’s Home Retail Group to bring Agros catalogue retailing to India. In March, Shoppers’ Stop purchased a 19% stake in HyperCity, with the option of raising it to 51%.
HyperCity’s plans reflects the mood among Indian companies which are pledging billions of dollars to enter the country’s modern retail sector. Companies such as Reliance Industries Ltd and Bharti Enterprises Ltd have mapped out plans to sell to millions of Indian consumers.
Modern retailing is just 3% of India’s retail market but is expected to corner almost 27% or $239 billion (Rs979,900 crore) by 2015, according to consulting firm Technopak Advisors.
The firm says there will be at least 10 modern retail companies in India with revenues in excess of $1 billion in the next five years.