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.

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.