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Nirma gets into food retailing biz

Arijit De & Reeba Zachariah

Detergents major Nirma has quietly made a foray into a new area: food retailing. The company has launched a retail supermarket under the brand Radhe in Ahmedabad. The 3,000 square feet grocery and food products store has been launched as a pilot project, with a possible expansion across the country hinging on its success.

Though the grand plan includes a national rollout over the next two years, the group is yet to take a final call in this regard.

Hiren Patel, chairman and vice-chairman of Nirma Consumer Care and the designated spokesperson for the group said, "We have entered the food retailing business as we see a distinct synergy, because of our presence in the FMCG sector."

"We have not decided on a major expansion to other parts of the country with Radhe. We would like to wait and see the results for the store that we have," Patel added. Patel refused to comment on the success of Radhe till date.

Nirma stocks all major products and brands from all companies, including those of rivals. According to analysts, the Indian organised food retail business accounts for less than one per cent (around Rs 6 billion) of the total food expenditure in India. This compares poorly against the global average of around 53 per cent, which has prompted several players to enter the food retailing business.

The RPG group has met with initial success with its FoodWorld chain, based primarily across south India. The company has followed the hub-and-spoke model to expand its business, which requires a significant critical mass in an area to meet with success.

The food-retailing sector is expected to expand ten-fold over the next five years to approximately Rs 75 billion, according to a report by Rabo India Finance.

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