NEW DELHI: Shahadara is an unlikely place for a multinational supermarket chain but the world's second largest retailer, Carrefour, has chosen the chaotic, not up-market but vibrant east Delhi neighbourhood as its entry point to the vast Indian wholesale retail market. The French retail group on Thursday announced the opening its first cash-andcarry or wholesale outlet in Shahadara.
Government regulations only allow foreign retailers in the wholesale segment and prohibits FDI in the multibrand retail. There is stiff opposition from small shop owners and kirana stores and political parties to further open up the retail sector to foreign players.
The Department of Industrial Policy and Promotion had recently floated a discussion paper on the issue of opening up of the retail sector and some policymakers have backed the idea of allowing greater foreign participation in the retail sector.
The worlds largest retailer, Wal-Mart, had entered into a joint venture agreement with Bharti Enterprises and opened its first wholesale store in Amritsar. It plans to open other stores in the next three years. Germany's Metro entered the country's wholesale retail segment in 2003 and has stores in Hyderabad, Bangalore, Mumbai and Kolkata.
The Carrefour outlet, which will function under the brand name Carrefour Wholesale Cash & Carry, will be spread over an area of 5,200 square metres (56,000 sq ft). It will have food and non-food sections and cater to professional businesses, institutions, restaurants and local retailers.
Most of the foreign retailers, who have opened wholesale outlets have opted for sites away from city centres due to the availability of large space at a relatively cheaper prices in the suburbs.
This opening of the store is in line with the Paris-based group's strategy to be present in major emerging markets that offer significant expansion and medium- and-longterm growth opportunities.
"The opening of this first store marks Carrefour's entry into the Indian market and will be followed shortly by the opening of other cash & carry stores," Carrefour CEO Lars Olofsson said.
The Indian retail landscape presents a positive outlook for American and European retail companies. The Indian retail sector is expected to double to $556 billion by 2014. According to a government report, India continues to be among the most attractive countries for global retailers . FDI inflows between April 2000 and April 2010, in single-brand retail trading, stood at $ 194.69 million.
Robust economic growth of over 8% has attracted global attention and strong domestic demand has helped the economy withstand the slowdown. Growing spending by the country's expanding middle class has helped domestic retailers and foreign brands to notch up impressive sales. Shopping malls have sprung across small, medium and large towns to cater to growing consumption in Asia's third-largest economy.