The Power of Retail

The Future Group will be entering the highly prized cash-and-carry sector in an effort to compete directly with it’s main competitors Reliance and the Wal-Mart/Bharti combine. Its cash-and-carry venture will take the name KB’s Wholesale, after it’s founder and promoter Kishore Biyani’s initials and will be opening in April. Future Group plans to open 15 stores over the next year and a half. The first outlet will be opened in Burdwan in West Bengal and a second outlet will open in Mathura.

Analysts say that it was imperitive for the Future Group to enter this sector if it wanted to compete effectively with Reliance and Wal-Mart as both retailers creating their back-end supply chains very strongly which will enable them to stock their stores with lower priced products. According to a retail consultant, “Wal-Mart cash & carry will obviously sell at a preferential rate to Bharti’s retail business than to say a Pantaloon,” thus is was essential for it to become a wholesaler itself.

A network of wholesale stores will also be extremely profitable when FDI restrictions are eased. London based marketing research and intelligence firm, Euromonitor says, “When the restrictions on retail in India are lifted, international retailers will be in prime position to easily convert their cash-and-carry stores into highly profitable supermarkets and hypermarkets.” German based Metro and South African Shoprite are the two cash-and-carry companies currently in the Indian market.

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