Bharti eyes Big Apple as starter for retail feast

Bharti Enterprises, slated to start its retail business in the first quarter next year, may acquire Big Apple — the Delhi-based supermarket chain with 65 stores. Bharti’s acquisition blueprint in the retail sector may be a replay of its telecom business, where the group built up a pan-India mobile presence by acquiring telcos such as JT Mobile in Karnataka and Andhra Pradesh, Skycell in Chennai and Hexacom in Rajasthan.

A senior source said the Bharti Group and Big Apple are at fairly advanced stages of negotiations and if price expectations match, the deal could be sealed as early as next month. He also said Big Apple has quoted its price and Bharti has given a revised offer. “Talks will resume after Christmas vacations,” he said.

Bharti plans to start retail operations in March by opening its first small format retail store in North India while the cash and carry business in partnership with Wal-Mart will start in the third quarter of next year. Acquisition of regional retail chains is likely to give Bharti a headstart in terms of locations, a readymade supply chain and operations.

Bharti plans to invest $2-2.5 billion in retail by 2015. It is planning pan-India operations and is looking at approximately 10 million square feet of retail experience across all cities in India with a population of over one million.

As western-style supermarkets take off in India and large companies enter the business, a consolidation is likely. Small regional chains, unless backed by a large group, have limited funds to expand and scale up, and will look for joint venture partners and buyers.

The process has already started. Wadhawan Retail, which runs Spinach retail chains in the west, took over Delhi’s Sabka Bazaar and Home Store as well as the management contract of Maratha Stores in Mumbai. Similarly, AV Birla group’s retail arm took over Trinethra stores in the south. Reliance Retail took over Adani Retail in Gujarat but steep valuations in other states kept it away from acquiring more.

Spinach retail buys out Sabka Bazaar

June: 2007

After Aditya Birla–Trinethra and Reliance–Adani Retail deal, more consolidation is happening among small and medium-sized retailers. Mumbai-based Wadhawan Retail, owners of stores under name ‘Spinach’ have taken over Delhi-based Sabka Bazaar and The Home Store for over Rs.100 crores.

Wadhawan has also bought 15 outlets of Mumbai’s co-operative Maratha Stores. The Home Store offers home and lifestyle products and present in nine major cities while Sabka Bazaar sells food and grocery items has 35 stores in Delhi-NCR.

The acquisitions slips nicely into Spinach’s fold as Wadhawan Food Retail had plans to open 1,500 stores in 90 cities. Currently it has 23 Spinach stores in Mumbai. It gives a good hold in the northern and Mumbai market and initially would retain the same brands as they are well-known in their respective regions and own clientele. .

The Home Store was also in need of funds to expand and looking for Rs.150 crore funding from venture capitalists to expand its operations nationally with 100 outlets. Besides this it is establishing 3 hypermarkets in northern India for Rs.15 crore.

Now, Wadhawan Retail (a retail venture of Dewan Housing Finance) would spruce up the acquired outlets to take on Reliance Fresh and Food Bazaar. Spinach earlier bought HLL’s home-delivery retail business, Sangam Direct in Mumbai.

As unorganised retailing picks pace in India, small and medium sized retailers will consolidate to scale up their operations and meet capital requirements. Also, they could then meet with problems of rising real estate prices and lack of quality space availability.

US giant Big Apple comes to India

Popular international retail giants are now heading towards India for setting up their stores. Yet another addition to this list is Big Apple, the Indian version of the popular US retail chain 7-Eleven.

It plans to launch 100 convenience stores in the national capital and surrounding areas by August to cater to the urban consumers. With shopping becoming another casualty of long working hours, Express Retail Services Pvt Ltd is rapidly expanding its Big Apple chain of convenience stores with 25 stores already merchandising 2,500 products including FMCG, grocery, fruits and vegetables.

The stores will remain open from 7 AM to 11 PM. After August, Big Apple will expand into cities adjoining the national capital to double the number of stores to 200.

In the second phase, expansion is planned in Karnataka and Gujarat.

The company's stores are doing an average sales of Rs 16 lakh per day and it is just six-month away from break- even.

"They are just two per cent away from break-even." A typical Big Apple store is 1,500 to 1,800 sq feet and stores over 2,500 product merchandise, and they claimed it was way ahead of competition from Reliance Retail's neighbourhood stores and Subhiksha. They change product line every 90 days based on customer acceptance and demand.

The Rs 40-crore company has a direct tie-up with farmers in Haryana, Rajasthan, Himachal Pradesh and Uttar Pradesh.

Bru Cappuccino

The North: e.g. Delhi

Bru Cappuccino ads have been popping up in City and Delhi times regularly for the past couple of months. The brain behind the campaign has to be appreciated. This is a different and a pretty expensive 360 degree campaign.

Print media, PVR theatre boards, Concerts in DU - Euphoria, MTV shows - Flirtbook, and various other Below the Line activities like a mobile coffee vending van that travels across different institutes.

Hindustan Unilever Ltd’s flagship coffee brand, Bru, has announced Karan Johar as the official brand ambassador for Bru Cappuccino. Johar will kick off this new association with Bru Cappuccino’s ‘One is Not Enough Festival’ in Delhi. Johar, who is the host of the well-known celebrity chat show, ‘Koffee with Karan’, has taken his tryst with coffee a step ahead.

http://in.promos.yahoo.com/bru/flirt_contest.html

This is one of their online gaming links on flirting.


The South: e.g. Chennai

Will the same strategy work in the South? There are a lack of specific magazines or newspapers that would target the same segment as a City or a Delhi Times does.

Bru as a brand in itself is huge revenue source in the south. Hence airing a commercial for Bru Cappuccino with the "Flirt More" tag would definitely not go well with the exsiting strong customer base.