Reliance Retail launches first store, unveils mega plans

He said that in Hyderabad, various formats including the hyper market format, would be launched by March 2007 and that hyper market would be their important format.

Pillai said Reliance Retail will expand to all large cities in the next six months, and to top 70 cities in the country in the coming 18-24 months, based on how the pilot goes.

The stores will stock non-vegetarian food, but that would be in separate enclosures and also have an independent supply chain.

On the opening day, vegetables definitely were cheaper in the Reliance store. R Srinivasan, an elderly consumer who lives in that posh neighborhood, said vegetables prices were 40 percent lower. When asked if this how it is going to continue, Pillai said that he will put pressure on K.S. Venugopal, chief executive for customer operations in Andhra Pradesh , for that. That it is not likely to be so, was given away when he said that there are promotional interests. However, Reliance is giving itself enough time to experiment with various pricing approaches during the piloting period.

Asked if Reliance, to maintain a variety of fruits and vegetables including imported ones, forgoes margins on the costlier ones and makes higher margins on cheaper local and seasonal fruits, thus in a way cross subsidising among consumer classes, Venugopal said that it may not be possible to adopt a cost plus approach.