Reliance Retail is planning to exit Uttar Pradesh. The company?s move comes in the wake of the state government?s recent decision to shut its outlets in the aftermath of isolated attacks. The decision is seen as selective victimisation, as other retail chains like Spencer?s and Subhiksha are operating freely in the state.
According to sources close to the development, Reliance Retail is in the process of annulling its deals with local contractors and will not be signing up further properties for its Reliance Fresh format in the state. After shutting its outlets in other parts of UP last month, only the Noida and Ghaziabad stores of Reliance Fresh were operational. But the state administration on Sunday evening ordered the company to close its operations in these satellite towns of Delhi as well.
?We had never anticipated that UP would be such a debacle, with the state government asking us to shut operations,? a company source told FE. Orissa also featured on the list of troubled states for Reliance Fresh after protestors gathered at its store in Bhubaneshwar on Tuesday. However, the local administration managed to pacify the demonstrators.
When contacted, a company spokesperson declined to comment.
As reported by FE earlier, though the department of consumer affairs had written to the UP government seeking an explanation for ordering the closure of Reliance Fresh stores in the state, it is yet to receive a response. The company planned a total of 200 stores in UP over the next three years and already has 315 stores across the country.
Industry experts point out that Reliance is probably being targeted by the anti-organised retail lobby as it had the most high profile roll-out and because it had announced its intention of directly sourcing from farmers, thereby disintermediating middlemen accused of escalating costs.
