TATA deals for Retail with Woolworths

Jul 7, 2007

Tata is trying to expand fast in retail market. TATA group has lots of experience about India consumer. They are already selling Match Box, salt and many other items sold in retail shop.

The Tata group is in talks with Woolworths Ltd, an Australian retail company, to set up supermarkets and hypermarkets in an attempt to widen its own retail business and enter a segment that accounts for 60-65% of India's $350 billion (Rs14 trillion) retail market, according to industry body Retailers Association of India (RAI).

One of the group's company, Infiniti Retail Ltd, recently launched the Croma chain of consumer electronics stores in association with Woolworths, which is a technical partner in the venture. (Woolworth has no equity stake in Infiniti.)

Given the largely unorganized nature of food retailing in India, firms entering the business have either hired foreign retail industry executives or forged alliances with foreign retailers or both. Indian laws do not allow foreign retailers in multi-brand retail, although they are allowed to operate wholesale cash and carry businesses.

The Tata group already has a presence in the supermarket business through Star India Bazaar, which is run by group company Trent Ltd. Trent also owns the Westside and Landmark chains. Tata Chemicals Ltd recently announced a joint venture with European fresh produce firm Total Produce for a food and grocery distribution business.
A mere 1.3% of food and grocery sales in India happen through supermarkets and other outlets that are part of organized retail; business houses such as Reliance Industries Ltd and Aditya Birla Group are hoping to change this as they make big investments in the business. Bharti Enterprises Ltd too has announced a retail foray with Wal-Mart Stores Inc. joining it as a partner for the back-end or supply business.

Woolworths has around 700 supermarkets in Australia, according to its website, and is the country's second largest employer. It announced sales of A$16,849.9 million for the six months ended 31 December 2006, up 9.7% from the year-ago period.

Source: LiveMint

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