Bharti sets $10bn retail sales targets

Bharti Enterprises, the Indian conglomerate, said its new store chain could hit sales of $10bn within five years.

Rajan Bharti Mittal, managing director of Bharti Retail, unveiled the sales target at the World Retail Congress in Barcelona. The level of sales points to a rapid store roll-out programme in India, where Bharti has pledged to spend $2.5bn in the seven years to 2015 on new stores.

Wal-Mart, the world’s biggest retailer is providing the logistical and distribution support for the retail chain. However, in accordance with Indian law which bars multi-brand retailers operating in the domestic markets, it will not have a stake in the retail business.

But the US retailer has signed a joint venture deal with Bharti to open cash and carry sites in India. The duo have pledged to open open 10 to 15 stores in India by 2015.

International players are allowed to operate in the wholesale market. German group Metro has a presence, while Carrefour, which is still on the look-out for a retail partner, will open its first cash and carry in the market in 2009.

Mr Mittal told the Financial Times this week that he will be building neighbourhood stores, supermarkets and hypermarkets in urban areas across India.

”That is the construct that will serve consumer needs into all three formats. We will make announcements in the coming weeks about where those supermarkets are, what kind of sizes and what kind of brand.”

He said he has not decided on whether or not to use the Wal-Mart brand in the retail chain. ”We have an arrangement with them that if need be we can use that.”

“Would we use it? It is too early to say,” he added.

Only 4 per cent of the market is organised retail. Mr Mittal thinks that 20 per cent of all shopping will be done through modern chains by 2010 and is hoping to pick up a sizeable chunk of that market.

Reliance Industries is investing $5.5bn to create a retail chain -- although the company was forced last year to temporarily close about 20 new Reliance Fresh groceries in the face of violent demonstrations led by small business associations.