April 16, 2008 / 10:52 AM / 11 years ago

India's Bharti Retail opens convenience stores

MUMBAI, April 16 (Reuters) - India’s Bharti Retail Ltd, a subsidiary of Bharti Enterprises, has launched its first food and grocery stores ahead of the roll-out of its wholesale centres that are being set up with Wal-Mart Stores Inc (WMT.N).

Bharti Retail said on Wednesday it had opened three Easy Day stores selling groceries, personal care and household products in Ludhiana in western Punjab state.

Bharti Retail aims to spend $2.5 billion by 2015 in multiple-format stores including hypermarkets and supermarkets, that will compete with Pantaloon Retail India Ltd PART.BO, the Aditya Birla Group, RPG Group and Reliance Industries (RELI.BO).

Bharti Enterprises also has an equal venture with Wal-Mart for wholesale cash-and-carry and back-end supply chain management. The venture will launch the first store by the end of 2008 and aims to open 10 to 15 centres over seven years.

The high cost of real estate was a challenge, Managing Director Rajan Mittal told Reuters recently.

The Easy Day neighbourhood stores, measuring 2,500 to 4,500 sq. ft., were offering jobs to vendors of fruits, vegetables and meat, as well as to housewives and retired people, Bharti Retail said in a statement.

“These initiatives will help facilitate inclusive growth in communities in which its stores operate,” it said.

It may also help mitigate concerns about job losses from the growth of modern retail in India, where only about 3 percent of the retail industry is in the hands of large companies.

The tightly-controlled industry, estimated at about $350 billion, is forecast to nearly double in size by 2015.

Foreign multiple-brand retailers are currently only allowed wholesale and franchise operations in India.

Germany’s Metro AG MEOG.DE and Shoprite Holdings (SHPJ.J) have wholesale centres, while France’s Carrefour (CARR.PA) and Tesco Plc (TSCO.L) are also in talks for similar deals. (Reporting by Rina Chandran; Editing by John Mair)

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