Home / News / Retailers look at store expansion  amid  revival

Large organized retailers are putting their expansion plans back on track after store-openings were shelved last year because of the covid-led disruptions. Fashion, fast-food chains and electronics retailers are likely to lead store openings over the next 12 months, said experts.

“Retail expansion has picked up for value retailers, hypermarkets, electronics chains, health and beauty formats. The formal category was the worst hit—but casual and athleisure are doing quite well. Everybody is out covering tier-two and three markets, which performed well for them. Tier-one is yet to reach full recovery," said Shubhranshu Pani, managing director, retail services, JLL India.

Retailers such as Benetton, Levi’s, Aditya Birla Fashion Retail with brands like Louis Phillipe, Allen Solly, Peter England; and fast-food chains such as Domino’s and McDonald’s have made progress on their store opening plans. It also helps that high-street rentals have dropped 10-15%, helping retailers lock in locations, said Pani.

“We’re looking at opening anywhere between 30 to 40 stores across the country this year," said Benetton India managing director Sundeep Chugh. The figure is more than the 25-30 stores the retailer typically opens in a year. Benetton India had halted its expansion plans last year, with the focus shifting towards ensuring profitability of existing stores. The retailer is eyeing more stores in markets such as Gangtok, Ranchi and Delhi.

Jeans brand Levi’s also overhauled its in-store experience. “We undertook a massive store transformation project called RX3—resize, relocate and rejuvenate–for our store network. The result was that we shut 10% of our bottom tail-end stores and opened the exact number of stores by the end of 2020 but with a big difference. The average store size was bigger, locations were better, and the store format was upgraded to the global format," said Sanjeev Mohanty, managing director, South Asia, Middle East and North Africa at Levi Strauss & Co. Mohanty said the plan was opportune as rentals were better and competitors were giving up prime locations. The shift to casual clothing has helped the retailer, he added.

Fast-food chains, on the other hand, have seen demand resume across markets and formats. Consumers pivot to known and hygiene brands and subsequent closure of smaller players has helped organized food chains step up expansion.

“Westlife has been consistently opening 25-30 restaurants every year in line with our vision 2022. We will continue to do so in the coming year as well. We believe that the opportunity for the quick service restaurant industry is huge, and we will continue to invest in the business with a long-term view. FY21 was an exception because of the lock-downs, but even with all the challenges, we managed to open five stores, including one at the Mumbai international airport," said Saurabh Kalra, chief operating officer, McDonald’s India west and south. The fast-food chain plans to open restaurants in the big cities besides significantly growing its presence in tier-two cities and towns, he said

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