Kishore Biyani plans cash-n-carry battle now

THE country’s largest retailer Kishore Biyani is now looking at a presence in the cash-and-carry (wholesale) business to take on Reliance and Wal-Mart on all fronts, The venture, to be called KB’s Wholesale, will be rolled out early next month. Analysts close to Mr Biyani’s Future Group say it’s not without reason that India’s largest retailer has taken the decision. Competition is hotting up with Reliance Retail and Bharti-Wal-Mart putting up their own backend ventures, something that will make their front-end retail ventures competitive on the price front. At present, Pantaloon Retail sources from multiple vendors. Experts say if Mr Biyani continues with his current sourcing model, he would lose out on the price war in the long run. When contacted by ET, Mr Biyani confirmed plans of entering the cash-&-carry business. He said, “we are looking at about 15 wholesale stores in 18 months.” The first KB’s Wholesale store will come up in Burdwan in West Bengal and the second in Mathura, sometime next month. Retailers such as Reliance and Bharti have ambitious plans in the hypermarket and hard discount formats, and are likely to roll out dedicated cash-and-carry operations (wholesale stores that would supply to their retail stores) for catering to front-end retail. In fact, Bharti has already signed up with the world’s largest retailer, Wal-Mart, for cash-and-carry business. Though Bharti chairman Sunil Mittal maintains that cash-and-carry would be an entirely separate business from retail, sources say both would be linked. “Wal-Mart cash & carry will obviously sell at a preferential rate to Bharti’s retail business than to say a Pantaloon,” said a source in the retail consultancy business. In the coming times, cash & carry is likely to see a lot of action, with many international retailers, including Carrefour, Tesco and K-Mart firming up plans in this direction. It’s particularly seen as an interesting business for the global retail community as FDI is not allowed in retail. According to Euromonitor, a London-based market intelligence firm, “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.” At present, the Indian cash-and-carry business is dominated by two global players, the German chain Metro and South Africa’s Shoprite.

Courtesy: EconomicTimes
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