Bharti Group, Wal-Mart Stores Inc’s partner for a domestic wholesaling venture, plans to announce its strategy and brand name for a proposed retail chain this month.
Bharti, which is starting the retail chain independently of the Wal-Mart venture, would open its first store as a small supermarket covering 2,000 sq ft of space, Rajan Mittal, managing director of Bharti Enterprises, said in an interview at the World Retail Congress in Barcelona today.
Bharti will compete with retailers including Reliance Industries, the Tata Group and Pantaloon Retail in a market where sales through chain stores may rise eightfold to $97 billion by 2012, according to a forecast by consultant Technopak Advisors.
The equal venture with Wal-Mart, the world’s biggest retailer, was on schedule to open its first wholesale store by the end of the year and open 15 stores by 2015, Mittal said.
High rentals and a shortage of quality retail space have delayed expansion plans of retailers including Reliance.
Real estate prices were a big challenge in India, Mittal said. Reliance had opened 441 Reliance Fresh grocery stores at the end of 2007, less than half the targeted 1,000 shops.
Bharti plans to spend as much as $2.5 billion (Rs 10,000 crore) on the retail venture, which it plans to develop independently of Wal-Mart as foreign investment in retailers is mostly barred.
New Delhi-based Bharti planned to have 10 million sq ft of retail space and employ 60,000 people by 2015, Mittal said in February last year when it announced the retail plan. Bharti had then set a target to open its first store by March.
Bharti expects the retail unit’s sales at Rs 20,000 crore ($5 billion) by 2015, Mittal said. It will set up supermarkets, hypermarkets and convenience stores and sell products including food, electronics, clothing and furniture.
Bharti’s venture with Bentonville, Arkansas-based Wal-Mart may employ as many as 5,000 people.
Left parties, allies of the central ruling coalition, have sought restrictions on the opening of retail stores by large companies. They also oppose foreign investment in the country’s retail industry.
The ruling Congress party, which leads the central coalition, has sought safeguards from the government before it allows overseas investment in the nation’s retail industry.