Kishore Biyani’s Future Retail has earmarked ₹300-500 crore for capital expenditure this year. This will get funded through a mix of equity, debt and internal accruals.
After posting a standalone net profit of ₹74 crore and 12 per cent growth in total income at ₹10,368 crore in 2014-15, the owner of formats like Big Bazaar, e-Zone and HomeTown is looking to emerge as the largest player in the hypermarket segment.
Kishore Biyani, Managing Director, Future Retail, said: “We are back on the growth path and will be consolidating our leadership position in the hypermarket space touching 250 Big Bazaar stores in the next 12-18 months making us significantly larger than our competitors. This year we will add 50 hypermarkets, which comprises 35 Big Bazaar stores and 15 stores belonging to Bharti Retail, which will get converted into Big Bazaar.’’
Competitors such as Tata-owned Trent (Star Bazaar), Reliance Hypermarket and Shoppers Stop-owned HyperCity have about 150 hypermarket stores.
The merger with Bharti Retail has helped Future Group in expanding its reach and increasing the number of stores faster. Biyani says, “We have added ₹2,000 crore of business due to the merger with Bharti Retail with its 15 hypermarkets and 200 supermarkets under the EasyDay outlets.’’
Future Retail has 401 stores under formats such as Big Bazaar (196 stores) and e-Zone (97 stores). New stores of Big Bazaar will get added in far flung suburbs of Mumbai such as Malad and Dahisar.
However, when it comes to its electronic retail format under e-zone, it is unlikely to go in for further expansions. “e-Zone will go towards the digital format as we are moving the retail brand towards the net through ezoneonline.in, so that we do not have to open more stores,’’ added Biyani.
The company has been constantly exploring the digital medium since it set up Big Bazaar Direct under which its franchises own tablets to place orders with consumers. “We will be extrapolating from the 550 franchises for Big Bazaar to 40,000 in the next 3-4 years reaching out to 12,000 pin codes,” said Biyani.
Logistics unitThe company’s logistics subsidiary under Future Supply Solutions is the backbone of its retail business.
“It is our supply chain capability which is the biggest differentiator compared to other players that will help us in building reach across 220 cities. We are also building a prototype across cities to reach goods within an hour of placing an order,’’ added Biyani. Future Supply Solutions posted also does third party logistics for companies such as ITC, P&G and Tata Motors.