If this report is to be believed, Reliance Retail has bid Bye to the Cash & Carry business at least for the time being. In our opinion, we believe this as a totally wrong move as Reliance under Mukesh Ambani is best suited to implement large B2B projects with economies of scale.
The report further claims that it is a cash intensive business and we can assure you that Reliance is never dearth of cash. The announcement comes at a time when Bharti Wal-Mart announced their brand name for the Cash & Carry business. It is also hard to believe the newspaper report citing that Political developments were a hurdle for this business. Does it mean Bharti Wal-Mart, Tesco, etc have not done due dilligence ?
In our view, Reliance should have built large Hypermarket and Cash & Carry stores first and then should have netured into other formats – Departmental, JV with Global Brands etc. Tata group is in talks with Tesco while Careefour which is flirting with any and every business house in India hasn’t been able to choose its partner yet for the cash & carry business.
And during the boom period, Vishal Retail had pitched a different business model for Kirana Stores in India.