IndiaRetailBiz

Wal-Mart, the US-based world’s largest retailer, is here! Of course, through Bharti Retail, its franchisee partner for front-end retail in India. Bharti Retail, a part of Mittals owned Bharti Enterprises– India’s largest mobile telecom player– rolled out first cluster of its three convenience stores in Ludhiana (Punjab) on Wednesday, the 16th April, 2008.

Ludhiana, incidentally, happens to be the home town of Mittals, who before their meteoric rise in telecom business, were engaged in the business of cycle parts.

Despite the launch of retail chain being soft and without much fanfare, consumer response on the first day itself is believed to be huge and enthusiastic. The launch was kept low-key, perhaps, to avoid any adverse reaction from political activists and lobbies of small traders.

Also, ending months of speculation, the front-end business has been branded as “Easy Day.” Thus, the brand is devoid of either party’s name, that is, Wal-Mart or Bharti. This again appears to avoid the criticism of those opposed to entry of MNCs and big corporates in retail. It is noteworthy that both Wal-Mart and Reliance, in the past, have been symbols of protests by anti-retail lobbies.

In order to ward off wrath of petty vendors and local communities, Bharti has hired meat, fruits and vegetable vendors, housewives, retirees, rural folks, and physically-challenged persons from local areas for its operations. It has also announced to to give preference to people from local communities for employment in its retail chain. It will also provide intensive and structured training in retail to such people at Bharti Academy of Retail, which has specifically been set up by the company. In fact, it has already provided such training to over 1,800 persons.

“Easy Day” retail stores, typically measuring between 2,500 and 4,500 sq ft of space, apart from stocking food and grocery will among others also offer personal care products, stationery, household articles, processed foods, meat, poultry and fresh produce including bakery and dairy products. Although, Wal-Mart has revolutionised retail business the world over with its “Every Day Low Prices” concept, there has so far been no word about Easy Day’s pricing policy as yet.

Bharti, having initially flirted with the UK’s Tesco, ultimately decided to tango with Wal-Mart for its retail foray, in the beginning of 2007. While, Bharti has inked a 50:50 joint venture agreement with Wal-Mart for wholesale cash and carry business, in view of the government restrictions on foreign investment in multi-brand, front-end retail, it had to make do with technical services agreement with the retail giant for its front-end business. As part of this agreement, besides putting in place infrastructure for distribution, logistics and vendor management, Wal-Mart has agreed to provide its its globally adopted supply chain management and training standards to Bharti.

Bharti, which in the next five years intends to invest US$ 2.5 billion, or around Rs. 10,000 crore, has plans to eventually occupy 10 million sq ft of retail space and offer employment to 60,000 people. Besides expanding “Every Day” convenience stores format, Bharti will soon roll out multi format retail stores including supermarkets measuring between 30,000 sq. ft and 50,000 sq. ft, and hypermarkets measuring between 75,000-125,000 sq. ft.

Wal-Mart is known for its big box format stores, though, it has toyed in a small way with small format in countries like Mexico, outside the US. There is also speculation, however, about Wal-Mart setting up relatively small sized city centre style stores in the U S, as well.

Bharti Retail is slated to also open the first cash-and-carry store in equal partnership with Wal-Mart before the end of this year with plans plans to set up around 15 stores by 2015.