Spar International is confident its second foray into India can be a success, the Netherlands-based retail group told just-food this afternoon (22 August).
Spar has launched its latest attempt to break into the fast-growing Indian sector with a licensing deal with local retailer Max Hypermarkets.
Max Hypermarkets, owned by the Dubai-based Landmark Group, will open Spar-branded hypermarkets and supermarkets across India.
The agreement comes just eight months after Spar ended its first venture into India. Spar and former local partner Foodland ended their venture last December after three years in Mumbai.
Spar said the new venture with Max Hypermarkets is better placed to succeed than that first attempt. Under the plans, the two companies plan to open seven new stores over the next two years. The first two outlets – a hypermarket and a supermarket – are expected to open in Bangalore next month.
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“It was different in Mumbai; we focused on smaller supermarkets,” a Spar spokesperson told just-food. “We’re confident this time that we have found a different solution for the Indian market.”
The spokesperson pointed to the “expertise” of Landmark Group, the owner of Max Hypermarkets and Spar’s partner in the project. “Landmark has the expertise, they’ve done their homework and studied what needs to be done,” she said.
Spar’s venture is the latest move from foreign retailers into India’s fast-growing retail sector. Direct foreign investment into Indian retailing is limited to wholesale and franchise operations but multinationals are eyeing growth in the sector with interest.
Earlier this month, Wal-Mart set up a wholesale cash-and-carry business to serve the Indian retail sector with Indian conglomerate Bharti Enterprises.
Local retail groups are also busy drawing up expansion plans. Last week, Reliance Retail plans to invest US$6bn in expansion over the next four years.
Reliance plans to expand its store network from 250 to around 5,000 outlets across India by 2011.