India’s Reliance Retail is pressing on with its expansion plans, despite local opposition, with the opening of a handful of stores in Mumbai.
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The company, which plans to spend US$6bn on expansion over the next four years, has seen its ambitions take a hit after opposition from local traders wary of competition in India’s fast-growing retail sector.
Reliance has seen stores closed in Uttar Pradesh, India’s most populous state, on the order of local authorities after protests from small shopkeepers. The closures in the state have forced Reliance to draw up plans to lay off 1,000 workers and have thrown doubt on the company’s ambitions.
However, Reliance is having some success elsewhere in the country, with the opening of three Reliance Fresh outlets in Mumbai, a source close to the company told just-food today (28 September).
The source said the openings had been more “low-key” than previous launches elsewhere in India due to the fear of fresh protests. However, the source said opposition to Reliance’s plans was not as extensive in Mumbai as in Uttar Pradesh.
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By GlobalDataThe company wants to expand its store network to around 5,000 outlets across India by 2011
According to figures published by Reliance Industries last week, the Indian retail sector is a $270bn business growing at over 13% a year. The opportunity for the likes of Reliance – and multinational retailers like Wal-Mart – is that under 5% of the industry is “organised”. Small, “mom and pop” outlets dominate the sector.
