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Reliance Fresh: move to Delhi

‘Content Reliance’s move into Delhi is part of a second expansion push following the firm’s successful entry into retail, which was initiated through its opening of 11 Reliance Fresh outlets in Hyderabad in November last year. So far, the growing number of 2,300 square foot stores, offering around 200 SKUs of vegetables and staple foods, have been well received. As well as the obvious benefits of freshness and cheap prices, customers are impressed by unprecedented standards in store fit out, strong merchandising and the availability of an albeit limited range of chilled and frozen products.

Pleased with its development so far, Delhi is an obvious next step for Reliance Fresh. The city has a conurbation of 15 million people and is a key region enjoying economic growth and a resultant burgeoning middle class. These shoppers are increasingly aspirational and keen to spend.

This current pipeline of stores planned for Delhi is likely to range in size from 2000-5000 square feet. And looking ahead, Reliance has greater ambitions still. it plans to open stores across the country of up to 10,000 square feet under the Reliance Fresh Plus fascia by the end of the year, with the possibility of hypermarkets in excess of 100,000 square feet.

That india’s consumer economy offers tremendous potential does not really come into question, but one should not lose perspective. Of india’s 1.1 billion population, the middle class is estimated to stand at around 150 million people. The rest are poor - many living in conditions of extreme poverty. Also, serious issues surrounding india’s weak transport infrastructure, poor standards of public health and a need to alleviate an imminent shortage of skilled workers should not be underestimated.

There are undoubtedly significant challenges ahead for Reliance. However, by leveraging its brand strength and emerging logistical infrastructure, it is well placed to capitalize on the new opportunities presenting themselves and to defend itself from the pending onslaught of competition from both home and abroad.

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