Bharti Looks At Big Apple As Starter For Retail Feast

Bharti Enterprises is likely to buy Big Apple, the Delhi-based supermarket chain with 65 stores. Bharti''s acquisition blueprint in the retail sector may be a replay of its telecom business, where the group built up a pan-India mobile presence by acquiring telcos such as JT Mobile in Karnataka and Andhra Pradesh, Skycell in Chennai and Hexacom in Rajasthan.

Bharti plans to start retail operations in March by opening its first small format retail store in North India while the cash and carry business in partnership with Wal-Mart will start in the third quarter of next year. Acquisition of regional retail chains is likely to give Bharti a headstart in terms of locations, a readymade supply chain and operations. Bharti plans to invest $2-2.5 billion in retail by 2015. It is planning pan-India operations and is looking at approximately 10 million square feet of retail experience across all cities in India with a population of over one million. Big Apple is jointly promoted by Lalwani Holdings and the Chaurasia Group, which have interests in real estate and FMCG. Big Apple stores started operations in 2005 and the chain is now 65-store strong with an area exceeding 100,000 sq ft. It clocked a turnover of Rs 155 crore last year. The company works on minimum overhead costs and has a customised product mix that suits the area where it is located. As western-style supermarkets take off in India and large companies enter the business, a consolidation is likely. Small regional chains, unless backed by a large group, have limited funds to expand and scale up, and will look for joint venture partners and buyers. The process has already started. Wadhawan Retail, which runs Spinach retail chains in the west, took over Delhi''s Sabka Bazaar and Home Store as well as the management contract of Maratha Stores in Mumbai. Similarly, AV Birla group''s retail arm took over Trinethra stores in the south. Reliance Retail took over Adani Retail in Gujarat but steep valuations in other states kept it away from acquiring more.