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SPAR plans India comeback

Source : BUSINESS_STANDARD
Last Updated: Sat, Feb 09, 2013 19:12 hrs

 

After ending its partnership with Dubai’s Landmark group in May last year, euro 31-billion (Rs 2,22,890-crore) Dutch retailer SPAR International is planning an India re-entry by the year-end.

 

The company was in talks with a number of regional retail chains to sign licensing agreements and lend its brand and retail know-how, Managing Director Gordon Campbell said in an email to Business Standard.

Though SPAR has been considering expanding its network in India through tie-ups with regional chains for the last five years, it hasn’t made any announcement in this regard. “It is our objective to establish a network of SPAR partners in India. We are currently in the process of evaluating options. We have held initial discussions with a number of regional retailers and these discussions are continuing,” Campbell said.

He added India was a crucial market for SPAR and the company would have multiple partners for different regions in the country. “India will be one of the top-five global food retail markets in the future. Therefore, it is important for SPAR to have a presence in India,” said Campbell.

The SPAR group has 12,196 stores across 33 countries. It expands through the franchisee route. Recently, SPAR had announced it would expand in West Asia through a cooperative venture with Abu Dhabi Co-operative Society.

The group operates four retail formats — SPAR supermarkets, INTERSPAR hypermarkets (which the group launched in India, China and Russia), EUROSPAR, popular in European and African countries as SUPERSPAR, and neighbourhood stores called SPAR Express.

With the Landmark group’s Max Hypermarkets, SPAR operated 10 hypermarkets. In 2011, the business was worth ^65 million. The stores operated in India, with an average size of 4,710 sq mt, were among the largest in SPAR’s global portfolio.

Retail consultants say the slowdown in European countries is posing challenges for foreign retailers to expand in new markets such as India. “SPAR is highly focused on Europe and is hit by the slowdown there. It may not have additional resources to spare for India,” said Harminder Sahni, managing director of retail consultancy Wazir Advisors. “International retailers such as SPAR take a lot of time before finalising partners, as they involve a lot processes and reporting work,” he added.

“We have already shown the SPAR hypermarket and SPAR supermarket formats are well accept by the Indian consumer and can be profitably operated,” Campbell said.



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