Future Group is looking to spend R400 crore on expanding all its formats this year and the Kishore Biyani-promoted company will add space of 1-1.5 million square feet during the period, Rakesh Biyani, the joint managing director, said. This is less than last year?s investment as the company had already spent Rs 588 crore on expansion till December 31, 2012.

Last year, the company opened about 2 million square feet although the management had hoped to add about 2.5 million square feet of space. ?The primary focus is on making stores profitable. We will only open at places where we would be able to ramp up faster,? Biyani said.

The cautious approach comes at a time when other retailers are going on an expansion drive, hoping that consumer demand will pick up soon. Over the last one-and-half years, India?s slowing economy has taken a toll on discretionary spending by consumers. A survey of consumers released by Credit Suisse, in January, shows consumer confidence is at a two-year low.

Retailers are optimistic about higher consumer demand this year, helped by a slew of reforms introduced by the government. Shoppers Stop plans to add 16-18 stores over the next two years while Globus Stores will add five stores in six months. Aditya Birla Group?s Madura Fashion is expanding the Van Huesen chain of stores by adding 50 new outlets by the end of the next fiscal.

However, Biyani said January-March period has been ?quite lukewarm?, adding, ?We have to keep in mind that demand could be uncertain going forward.?

As on December 31, 2012 the company?s total debt stood at R5,431 crore. The company?s debt will fall by R2,800 crore, after the sale of the Pantaloons format to Aditya Birla Nuvo and the creation of fashion company Future Lifestyle Fashions (FLFL).

Last year, the company shut nine Big Bazaar stores, five Food Bazaar supermarket and 20 eZone stores that were not profitable. Typically, retailers shut stores that do not make money after two years, while opening stores at other locations.

For the quarter ended December 31, 2012, same-store sales or sales growth at stores that have been open for at least a year, grew 12.7% annually at the company?s lifestyle business. However, the company?s value retail business? sales grew at 5.1% annually, while home retail business? same store sales fell 3.4% year-on-year. For the quarter ended September 30, 2012 same store sales in the lifestyle segment grew 10.8% annually. Last month, the company also agreed to sell 22.5% stake in its life insurance JV with Generali Group for R300 crore. Future Group sold a major stake in Future Capital Holdings to Warburg Pincus for R560 crore in 2012.

Future Retail India shares closed up almost 1% at R152.55 on Wednesday on the Bombay Stock Exchange. It is Future Group?s listed arm, previously called Pantaloon Retail (India). The shares have shed about 29% of their value in the last six months.