The Hindu Business Line : High rentals keep FoodWorld stores out of Mumbai

According to Mr K. Radhakrishnan, Vice-President, Merchandising, Foodworld Supermarkets Ltd, setting up a store in Mumbai would depend on the availability of real estate. Bringing even a small retail format grocery store into Mumbai when rents average Rs 75 to Rs 90 per sq foot, in addition to maintenance, would ensure very small margins.

He said the company was considering smaller size formats for Spencer Hypermarkets of 3,000 sq ft and 5,000 sq ft and a Spencer's each in Mumbai and Hyderabad.

Of parting of ways between Dairy Farm International and RPG, Mr Radhakrishnan said that this was "an opportunity for both companies to grow". Both companies are set to split and an official announcement of the same is expected next week.

On the entry of foreign retailers with the announcement of FDI in retail, Mr Radhakrishnan said that it was early days yet in the Indian retail market. However, he said that foreign retailers would have to come into India with very innovative models to tackle the Indian market. There would constraints where pricing, credit, logistics and infrastructure were concerned.

FoodWorld has 93 stores countrywide.

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