Reliance Retail To Shoppers Stop: Offline Chains Line Up Breakneck Expansion Defying Online Frenzy

Brick-and-mortar retailers have lined up an aggressive store expansion, anticipating that a bout of revenge shopping by pandemic-weary Indians will kick-start momentum.Lifestyle to fast-food chains plan to set up more new outlets in high streets, and smaller cities and towns. While some are executing plans stalled by Covid-19, others are scouting for new locations. “Retail expansion has picked up and almost everyone is looking to complete their five-year plan in three to make up for the time lost to Covid-led delays,” Shubhranshu Pani, managing director, retail services at JLL India, told BloombergQuint. 'But, a majority of the new stores won't be in metros or malls. Tier 2 and tier 3 cities seem to have emerged as the most-favoured destination with consumer demand in these regions growing significantly in the last few years, and especially so during the pandemic.'A precursor to the spike came during the festival season with both online and offline retailers reporting record demand. According to a survey by the Retailers Association of India, sales rose 14% in October over the corresponding pre-pandemic month, driven by jewellery, apparel, food and grocery. Optimism stems from rising vaccination and falling Covid cases. But fresh concerns have emerged from the Omicron variant that spreads faster. Some countries have already started curtailing travel. It's not clear if Indian retailers are revisiting plans just yet.Reliance Retail Ventures Ltd., the footwear maker Metro Brands Ltd., Tata Group-owned Trent Ltd., Shoppers Stop Ltd. and Aditya Birla Fashion and Retail Ltd., so far, plan to go full throttle with expansion.“We're well back on track to open 60-plus stores during this fiscal and 100 Pantaloons outlets annually for the next couple of years, with 20% being franchisee-driven,” Jagdish Bajaj, chief financial officer, Aditya Birla Fashion and Retail, said in a post-earnings call for the quarter ended September. The company also plans to launch another 100 stores for its relatively new ethnic wear business in the next 12 months. “We had held back expansion of Shantanu & Nikhil and Jaypore and you will see about 10-15 stores this year and another 25-30 stores next year,' Bajaj said. 'With the Tarun Tahiliani association, we will launch 50 stores in the next 12 months. So, a lot of these are set for very rapid expansion.” The pandemic kept people indoors, shifting demand online both after the first and second waves. But as fresh infections eased, footfalls recovered with improved consumer sentiment in the run-up to the festival season this year.“We're seeing demand coming back in a big way across the country,” Dinesh Thapar, Reliance Retail's chief financial officer, said in an investor call. “We have plans in the offing to accelerate the retail infrastructure,” he said, without giving specific future guidance on the number of stores. The billionaire Mukesh Ambani-owned chain added 813 new stores in the second quarter ended September, up from 123 in the preceding three months, taking the total count to 13,635. Even Covid-19 didn't stop the country's largest retailer from expanding. It opened 1,456 stores in FY21.Spencer’s Retail, one of the earlier retail chains in India and part of the RP-Sanjiv Goenka Group, expects to open 1-2 lakh square feet of space a year, the same pace as 2019.“There are stores signed up for Nature’s Basket in Mumbai, Pune, Bangalore, Kolkata and Delhi-NCR region,' Devendra Chawla, chief executive officer and managing director of the company, said in an investor call after September quarter earnings. 'We'll continue to expand in these geographies for Spencer’s also, preferably in hypermarkets.' Large-format stores, between 5,000 sqft and 18,000 sqft, will drive growth for Spencer's, he said. The retail chain has 190 stores across 14 cities as of now. Retailers are planning to invest in more towards offline expansion, make their stores bigger despite the widespread focus on online business.Titan Co. plans 250-300 stores in 12-15 months in the eyewear division and about 20-odd jewellery stores in the next six months.The Tata Group company will also focus on renovation to make its World of Titan stores more modern and premium, Suparna Mitra, chief executive officer of watches and wearable division at Titan, told investors in an earnings call. 'So yes, store expansions are there, planned for the second half.'.Retailers See Inventory Pile Up As Rural Demand Begins To Lose Steam .According to individual company disclosures, several offline retailers are prepping for similar expansion.TCNS ClothingExpects at least 30% reduction in rentals.Eyes to double its store size to accommodate new categories like footwear, and beauty and personal care products. Plans to open one store every third day in the second half of FY22. The overall pipeline is 60 fresh outlets.Shoppers Stop Plans to open 20 stores over the next six quarters, focusing on a mix of private labels and beauty business. Seeks to deepen its presence in small cities with smaller-sized stores. To add three beauty stores in the next 12 weeks and 20 such stores annually for the next two years, betting on demand for cosmetics will come back strong.Me n MomsThe kids and maternity wear retailer to set up 200 stores, a mix of franchise shops and company-owned by FY22-end. In November, it opened 12 stores across Hyderabad, Nagpur, Noida, Bhatinda, Ludhiana, Amritsar, Kolkata and Muzaffarpur. Its biggest outlet is at DLF Mall, Noida.Metro BrandsThe IPO-bound shoe retailer will add as many as 260 stores across four brands—Mochi, Metro, Walkway and Crocs—over the next three years, according to its RHP. These outlets will be mostly company-owned.It operates 598 stores across 136 cities of which 43% are located in malls. The company is increasing presence in tier 2 and tier 3 cities.Tata TrentThe owner of brands like Westside and Zudio is eyeing 150 stores by FY22.V-Mart Retail Guided for a 20-25% store addition this fiscal. The plan is to open 40 stores, with a focus on South India.Avenue SupermartsThe operator of DMart supermarket chain intends to open 37 offline stores in FY22, aiming to make up for the tepid store opening in FY21.Page IndustriesThe maker of Jockey products in India plans to reach 1.5 lakh outlets, from 1 lakh outlets in the next couple of years. Jockey footprint is in all 50,000 population towns so the focus will now be on towns with 25,000-30,000 population, according to its latest investors presentation. IKEAIn contrast to its usual stores spanning across 3-5 lakh sq feet, the Swedish home furnishing retailer has launched its first small format city store at Worli, Mumbai on Dec. 9.It plans to have four more stores in Mumbai and another in Bengaluru. It also plans to open two stores at Ikea-anchored centres in Noida and Gurugram. The company is even scouting for locations in tier 2 cities.Fast-food chains, too, plan to widen network as dine-ins have resumed.Sapphire Foods India Ltd., one of the operators of KFC and Pizza Hut outlets in India, plans to open 60 in ongoing quarter ending December. It opened 13 stores between April and June and 32 stores in July-September.“As restrictions have eased, we have seen healthy recovery in dine-in sales while our delivery sales continue to accelerate. This has resulted in a robust 40% same store sales growth in October and November combined over FY20 (pre-Covid period),” Sanjay Purohit, group chief executive officer at Sapphire Foods said in an emailed statement. The franchisee operator expects to double its store count in the next three to four years, he said, after launching KFC store No. 500 last week in Dindigul, Tamil Nadu.Burger King India has 58 stores in the pipeline for this financial year. Of this, 25 are drive-through, 21 will be across high-streets and rest in food court. .Retail Auto Sales Jump The Most In 18 Months In November

Reliance Retail To Shoppers Stop: Offline Chains Line Up Breakneck Expansion Defying Online Frenzy

Offline retailers line up store expansion, anticipating that a bout of revenge shopping will kick-start momentum.

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