With the debate over FDI in retail hotting up, existing retail chains are consolidating their base across the country. The target is 61 non-metros and smaller cities with a population of more than 5 lakh.For instance, major Pantaloon Retail has started retail outlets in Sangli, Nasik and will open one in Aurangabad in Maharashtra, Durgapur in West Bengal and Allahabad in Uttar Pradesh and all set to start in Mysore in Karnataka.The Raheja-promoted fashion and lifestyle chain Shopper’s Stop, which has 19 shops across the country, is also looking into prospects of 22 cities including Ludhiana, Jalandhar, Coimbatore and Mangalore. ‘‘If we get good properties at these cities, there is no reason that we cannot start our operations there. In 3 to 5 years there will be huge growth in these cities,’’ says B S Nagesh, CEO, Shopper’s stop.Though the retail format would be similar, the shopping area and offerings would be different. For instance, a Big Bazaar, Pantaloon’s hypermarket mall, in Mumbai has 50,000 sq feet. In smaller cities, it would be 25,000 to 30,000 sq feet. It will spend Rs 400 crore in the next two years to more than double the total area of its retail stores to 5.5 million square feet.‘‘The store-on-store growth is quite healthy and gives us confidence that there’s scope for growing in every market we exist and get into new markets. There is a huge potential to tap these cities. First we will get into small cities of south, then we will move to north,’’ said Kishore Biyani, Pantaloon MD.Why the rush? Metros have almost reached saturation levels while rising income levels in smaller cities are the new attraction.For instance, Globus, will add three stores to its existing nine by Diwali, including one at Ghaziabad. Emphasising on the company’s profile, Vinay Nadkarni, CEO, Globus, says, ‘‘Globus is a youth brand. Fashion travels from metros to Tier-II and Tier-III cities. Sure, accessibility of fashion takes some time. The store space also differs. In the present scenario, these cities are the best bet.’’Adds Khrish Iyer, MD and CEO, Piramyd Retail: ‘‘The 61 tier-II and tier III cities have huge potential for value retailing like hypermarkets.’’Even South-based retail chains do not want to lose out. Chennai-based RPG group company Spencer’s — Foodworld (90 stores), Music World (170 stores), Spencer’s Hypermarket and Health & Glow — already has a store in Vizag and will set up one more soon Aurangabad. ‘‘Firstly, we want to consolidate in top 16 cities. Nonetheless, we are looking for opportunities in other 49 cities. All the new formats would be opened under Spencer’s brand name. Right properties are important,’’ says Jeethu Mehta, COO, Spencer’s.Landmark, a Chennai-based leisure and knowledge store chain, has 5 physical stores and an online store landmarkonthenet.com. The chain is targeting cities like Chandigarh, Coimbatore, Kochin. As per an HSBC report, more than 225 malls will be operating in India by 2007 and about 40 per cent will be in these cities. Of the total 26 mn sq ft of retail space in the cities, about 5 mn will be in 45 of these 61 cities.
