Explains Mr Nagesh: “We currently have nine stores in seven cities covering more than three lakh sq ft with 1,200 employees. We now plan to cover 16 to 17 cities in the next two years with 20 stores and plan a turnover in excess of Rs 500 crore.” The company started its operations in 1991 with just one store with the capacity of 2,800 sq ft.
Meanwhile, the Rs 50-crore Piramyd Megastore, which is a single-largest store of the retail mall ‘Crossroads’, is also focussing on the regional markets and plans to set up seven additional independent ‘Piramyd Megastores’ in the next two years.
According to Mr Krish Iyer, executive director and chief executive officer, Piramyd Megastore: “We will be looking at the profitability factor and primarily focus on return on capital employed.”
In the first and second phases, the company plans to concentrate on the western and southern markets and in the third phase it will focus on the northern market, informs Mr Iyer. In the western market, the company plans to set up its first independent store in Pune and in Nagpur by mid-October.
On the new expansion plans of Shoppers’ Stop and Piramyd Megastore, says Mr Prashant Mulay, research analyst, Strat Caps Securities Pvt Ltd: “Looking at the rate at which organised retailers are expanding their stores in India, this industry will work likewise in the global market too. This is because the bigger retailers have a larger bind power, larger bargaining power and provide retail shopping experience to customers.”
Adds Mr Mulay: “Even bigger companies such as HLL and Colgate, among others are welcoming the expansion plans of retail majors. However, there is only one concern about organised retailers in terms of the real estate cost which is too high. In India, the ratio of sales per sq ft is one of the lowest in the world compared to rent per sq ft.”