Discount retail chains on expansion spree

Discount retail business is indeed booming across India

as is evident from the massive presence of top discount retail brands Megamart, The Loot and the Brand Factory. On the other hand, Promart, run by Provogue has scaled down and abandoned its initial plans to open 20 more outlets across India, while solidifying its presence in Ahmedabad and Indore.

In October, Megamart opened its 175th outlet, in line with its parent company Arvind Retail’s strategy of occupying 5,000 sq. ft. a week and 2.6 million sq. ft. a year. Megamart is clearly catching up with India’s biggest retailer Pantaloon, who plans on opening 3 million sq. ft. a year, across its different formats. Arvind Retail’s CEO Suresh J says Megamart scores over other value retailers in customer service as there is a service executive for every 300 sq. ft. of store space as against others where shoppers have to wait for the sales staff. They are looking at a turnover of Rs 500 crores for FY 2011 and around Rs 1,000 crores by FY 2013. Megamart sells apparels from 200 national and international brands. Their bigger format stores known as Big Megamart also sells homeware products, luggage, etc. at a discount of 35 to 40 per cent.

The Mumbai-based discount retail brand, The Loot has successfully bagged 151 outlets and plans to cross 200 outlets in the next six months and is looking at Rs 100 crores public issue to fund this growth. Brand Factory, part of Kishore Biyani’s Future group, which gives 20-50 per cent discount, lends space to brands in its stores and earns a percentage margins on the business brands do. The chain is looking at a business of Rs 750 crores by the end of 2011 and plans to open five to six more stores.