Future Value Retail (FVRL), a wholly-owned subsidiary of Pantaloon Retail (India), the country?s largest retailer, plans to speed up expansion as consumer demand improves. It has raised its expansion target to three-four million square feet a year, from around 2 million square feet, earlier. Rakesh Biyani, director and CEO, retail, Future Group speaks to FE?s Shubham Batra on the company’s expansion plans. He also elaborates on the ways by which vendors and the company are working together to bring down prices at Big Bazaar and Food Bazaar, despite high inflation levels. Excerpts:

How has business shaped up for Big Bazaar and Food Bazaar?

Consumer demand has been strong despite high inflation. We are working with our vendors and suppliers to bring down prices on high-value products. Our best offers in the past have come through partnerships and though advance forecasting done this year, we’ve been able to bring down prices 15-18%. We have entire product assortment on offer, be it a microwave at Rs 2,000 or a laptop at Rs 15,000. We are able to attract footfalls into our stores.

What are your expectations from the five-day discount offer, on till Independence Day?

We had a very good trading period in July. The numbers are very strong, till the first half of August. This week would be the largest-ever trading week for FVRL. We are prepared operationally and have set up 1,500 new cash counters. We have appointed more people, security, crowd management and more working hours for the stores.

What are your expansion plans for FVRL this fiscal?

We are close to opening 50-60 stores of Big Bazaar and Food Bazaar by June, 2011. We are trying to increase the number to 70. During the last one year, all our efforts have been put in streamlining our back-end operations. KB’s Fair Price shops will continue to focus on three cities of Mumbai, Delhi and Bangalore. We will spend about Rs 600 crore this fiscal.

We are also looking at opening 20 e-Zone stores, 20 Pantaloon stores and about 12 planet sports stores. Along with opening 40 converse stores. These are all self-generating cash companies.

You had recently issued warrants worth Rs 400 crore to repay your debt. Where does the current debt level stand?

I would not have the exact number. There has been an efficiency drive and the numbers are looking good. Not only the debt level has come down, the inventory is also under control. Profits are going to look good.

There was speculation you might dilute your stake in FVRL.

Right now, there is no such plan. It depends on what speed you can grow. Business is going well. Operating conditions are much better than what we’ve ever had. The business is generating enough funds for itself. Now, we have the capability to run more stores.

What are your inventory turns like?

For us, inventory turns are not the criteria, rather the inventory per square feet is important because there are different product categories. I think food category is running at about 20 days of stock,, which means that we are rotating about 16 times a year. However, that’s not the reflection of the overall business, because electronic and fashion do not rotate as fast.