Ten months after it launched grocery stores under the Reliance Fresh brand name, Reliance Retail has embarked upon operational restructuring. According to sources, the company is mulling converting its 216 partly franchised stores into company-owned outlets with franchisees possibly brought on the company payrolls. The reason for the change is difficulties in manpower scheduling. Reliance Retail is also evaluating other models, such as one under which the franchisee might continue on a revenue-sharing model despite being on the company?s rolls.
The switchover is bound to have an impact on the retail market since the franchise model is seen as a popular move to co-opt shopkeepers, neutralising the charge that big retailers will eventually displace small retailers. In fact, Bharti Retail, the Sunil Bharti Mittal group?s retail venture with US retail giant Wal-Mart, has also expressed its intent to co-opt kirana stores by implementing a franchise model for its convenience stores. The Aditya Birla group and Tata Woolworths are also likely to focus on the franchise model for their proposed stores.
Reliance Retail at present operates the Reliance Fresh and Reliance Digital formats and is expected to launch its hypermarkets by the first week of August. When contacted a Reliance spokesperson refused to comment.
