Sahara Q Shop:
It’s confirmed that Sahara Group enters in retail sector (in format of hypermarkets) with brand name Sahara Q. The Sahara Group which has successful presence in Infrastructure, Tourism, finance, entertainment, real estate, health care, Sports and media is all set to launch a chain of retail stores across the country. This time the conglomerate plans to launch hypermarkets in carefully selected locations across the country under the brand name Sahara Q. The hypermarkets will sell consumer products, including Sahara’s own range of packaged goods such as detergents and soaps, as well as insurance and mutual fund products. According to experts this is a good move from Sahara Group for the retail sector as it has its own range of goods which will give another range of option for the consumer. Sahara has been trying to hit the retail sector since 2009, and researched the various ways. In 2009 Sahara Prime City, the realty arm of the Group, had planned to build 88 integrated townships across the country with retail outlets but that did not worked out. Now after various research Sahara group has chosen hypermarket to enter and is all set to get in to the retail business.
According to reports India’s retail sector is estimated at $350 billion and is growing at 30-40 per cent a year. Out of which the organized retail penetration in India is estimated at 5-8 per cent. The hypermarket segment has emerged as the format with the highest growth in most emerging markets and is likely to see the more action in India. Companies in India’s hypermarket format include Aditya Birla Retail, which runs around nine hypermarkets, Reliance Retail, Tata’s Trent, which operates the Star Bazaar stores, Shoppers Stop’s subsidiary HyperCity Retail, and Kishore Biyani’s Pantaloon Retail which runs Big Bazaar.
Many of these hypermarkets are witnessing profits with thinner margins as the format demands heavy investment and are slow to show returns. For one, they have yet to get the basics right. However, the Profit generation is limited but it has an enormous future potential. Often the product mix is heavily biased toward one or the other category. On an average, these stores require a capital expenditure of Rs 1,800 per sq. ft. and about 12 to 18 months to start generating cash at the store level. During this gestation period, a lot of perseverance would be required to fell things into places.