Published on Fri, Apr 18, 2008 at 13:46 | Source : CNBC-TV18
Updated at Fri, Apr 18, 2008 at 15:15
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Reliance Retail to slow down new store openings
At a meeting two weeks ago, the top managment of Reliance Retail was asked to slow down new store openings. Mukesh Ambani asked for a slowdown in opening new outlets, mainly in non-urban centres like UP, Bihar, Orissa, and MP. The perception being that the atmosphere is not conducive for organised retail and returns fell short of expectations.
At a meeting two weeks ago, the top management of Reliance Retail was asked to slow down new store openings.
Mukesh Ambani asked for a slowdown in opening new outlets, mainly in non-urban centres like UP, Bihar, Orissa, MP, Chhatisgarh, and Jharkhand. The perception being that the atmosphere is not conducive for organised retail and returns fell short of expectations.
They wantto focus on core strengths. That is the focus on their semiconductor and solar power business. RIL had earmarked Rs 24,000 crore for these new businesses
Ambani is concerned about the low speed of rollout. His target as on January last year was to have 1,000 stores by December. By April, their target was to have 585 stores. But as on April, there were three supermarkets, two jewellery stores, three shoe stores, three apparel stores, two timeouts, and 24 wellness stores. That is just one-tenth of the original target, and that's way behind the internal targets.
The Farm to Fork strategy was not as easy as they initially perceived and the progress on the back-end supply chain was unsatisfactory. Their vendor claim dues were not being paid on time. RIL was also worried about a political backlash.
Reliance Retail has refused to comment on the issue
