The move is also likely to bolster the retailer’s hyper-local aspirations through its e-commerce platform Jiomart
Reliance Retail, India’s largest retail company, is expanding its business and improving its profitability through strategic changes and investments. As one of the top 10 global retail sellers by market cap and among the top 30 by revenue, it has experienced significant growth in recent years.
To enhance its margins, Reliance Retail has increased the trading area for non-food and general merchandise by around 50% in its grocery stores. According to TV9 sources by this step the company wants to promote local sales through its e-commerce platform JioMart.
Isha Ambani’s Booster Plan For Reliance Retail
This shift aims to promote local sales through its e-commerce platform, JioMart, by connecting Smart and Smart Bazaar stores to provide a wider variety to consumers. Non-food and general merchandise items offer higher profit margins compared to segments like grocery and apparel.
The strategy also involves reallocating store space to fill gaps in product offerings, thereby providing a comprehensive range of products to customers. According to an industry insider, categories such as fresh produce, toys, and luggage have specific roles in the overall category mix, which depends on factors like store location and the economic and ethnic profile of each area.
Reliance Retail Pans To Double Business
Reliance Retail has set an ambitious goal to double its business in the next 3-4 years. The company is working towards improving its margins and expanding its operations to accommodate the rising demand in the country. By focusing on both premium segments and streamlining its operations, it is positioning itself for long-term growth in India’s evolving retail landscape.
As of June 30, 2024, Reliance Retail operated 18,918 stores across India, covering a total retail area of 81.3 million square feet. The company opened 1,840 new stores in FY24, making it one of the top 5 global retailers in terms of the number of stores. Reliance Retail’s focus on expanding its non-food categories, particularly general merchandise and home and personal care products, remains a key priority.
Reliance Retail Performance
In the June 2024 quarter, Reliance Retail’s EBITDA margin from operations reached 8.2%, an increase of 30 basis points year-on-year. For the entire fiscal year 2023-24, the company’s EBITDA margin stood at 8.5%, showing an improvement of 70 basis points compared to the previous year. During recent earnings calls, the management mentioned that streamlining operations has been instrumental in driving these margin improvements.
In the financial year 2024, Reliance Retail reported gross revenue of ₹3.06 lakh crore (US $36.8 billion). The company witnessed over a billion customer visits and recorded more than 1.25 billion transactions across its various channels.
(With inputs from PTI)