Organised retailers like Shoppers Stop and Walmart have drawn up huge investment plans to expand their physical and online presence as the industry faces dwindling sales and profits.
While Shoppers Stop is planning to invest Rs 140 crore for expansion of its stores and online sale infrastructure within next one year, Walmart is seriously looking at opening 50 stores over next five years.
“We have chalked out Rs 140 crore capex plan over next 12—15 months, which include investment of Rs 35 crore on development of technology and infrastructure for the omni channel, which is a combination of physical store and online site,” Shoppers Stop customer care associate and managing director Govind Shrikhande.
“We have 73 stores now. We will be opening six Shoppers Stop stores, three HyperCity stores and five speciality stores during the next 12 months,” he told reporters on the sidelines of the annual retail summit here today.
This capex of Rs 140 crore by Shoppers Stop will happen from its internal accruals, he added.
Elaborating on the plans, Shrikhande said, “We have already generated Rs 150 crore of cash through sales last year and we do hope to generate around Rs 190 crore of cash through same mode over next year. Thus, we have money for the capex from our internal accruals.”
Coming to his company’s debt—equity ratio, he said, “Our debt—equity ratio currently stands at 0.6 per cent and we will manage it to be a little lower next year.”
Walmart India, which became a 100 per cent subsidiary of Walmart Inc last year following the break—up of its JV with Bharti group, has plans to open 50 stores across over the next five years.
“We are focused on cash—and—carry business. We have plans to open 50 stores in the next five years. We already have 20 stores and the 21st store will be opened in Agra in September,” Walmart India president and chief executive Krish Iyer said.
“We want to grow in the B—to—B cash—and—carry and online businesses as well,” he added.
Walmart is betting big on e—Commerce space as part of its business expansion plan in the country.
“We have received good response so far for our online business at five places. Even though we plan to bring our 15 more stores onto the e—commerce space during next five years, going forward for every new store, we will have B—to—B commerce too,” he said.
Even though Walmart is currently focused on Andhra and Telangana to fuel its expansion, it is also eyeing the Northern states.
“In Andhra and Telangana, which are some of our focused geographies, we plan to open cash—n—carry stores. We are also looking at expanding our business in Delhi, UP, Punjab, Haryana and Rajasthan,” Iyer said.