AV Birla Retail to review non-metro expansion plans
Published on Mon, Jun 16, 2008 at 18:54 | Source : CNBC-TV18
Updated at Tue, Jun 17, 2008 at 11:21
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AV Birla Retail to review non-metro expansion plans
High realty costs have put a dampener on expansion of organized retail growth in India. Dismal sales in non-metros are forcing non-discount players like AV Birla Retail, or ABV, to review their small city plans.
High realty costs have put a dampener on expansion of organized retail growth in India. Dismal sales in non-metros are forcing non-discount players like AV Birla Retail, or ABV, toreview their small city plans.
More than a month after CNBC-TV18 reported that AVB Retail was re-negotiating contract rates with its vendors; the company is now reviewing its expansion in the non-metros too.
Sumant Sinha, the company's CEO, admitted that further penetration in tier II cities may not be feasible. The company is present in 40 cities through more than 500 retail points operating under 'More'. The company also says that it will pass on cost increases to consumers.
The company is also reviewing various aspects of the business that includes format size, private label mix and merchandising and sourcing. High rentals and domestic inflation have already taken a toll on organized retail and though rentals in non-metros are still affordable, retailing for a non-discount outfit like AVB Retail is not.
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