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India's top 10 food retailers accumulate $2.2 billion losses FY14

Competition from local stores constitute 90% of India's $500 billion retail market

Mumbai: India's top 10 food retailers are estimated to have accumulated losses worth $2.20 billion in the fiscal year ended March 2014, as they scaled up operations and refined their business models, according to a report by ratings agency Crisil.

The companies, which the report estimated generated $3.98 billion in revenue during the same period, include Wal-Mart's Indian operations which run the Best Price Modern Wholesale stores, Metro Cash & Carry India, Aditya Birla Retail, Bharti Retail Ltd, Reliance Fresh Ltd which is a part of Reliance Industries, and Trent Hypermarket Ltd which is a part of Tata Group-controlled Trent.

Competition from local mom-and-pop stores, which constitute 90 per cent of India's $500 billion retail market, price-sensitive customers, and low margins remain the core challenges to the growth of organised food retailing in the country, the report said.

Food and grocery account for two-thirds of the retailing market and organised food retail contributes 2 per cent to this. Crisil, however, does not expect any consolidation in the sector as most companies are at an advanced stage of investment and backed by deep pocket promoters.

( Source : reuters )
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