Spread over 53,000 square feet, the Best Price Modern Wholesale store, situated at Indraprastha Industrial Area, Jhalawar Road, Kota, offers products at best fixed and fair prices with unmatched convenience, choice, quality and hygiene.

Best Price Modern Wholesale store is a one-stop business-to-business store that meets the day-to-day needs of restaurant owners, hoteliers, caterers, fruit and vegetable resellers, kiranas, retail store owners, offices and institutions. The assortment, service and store layout of the Store is customized to specific needs of members who can walk into the store and source high quality products in the quantities they need and at the time they require.

Mr. Rajan Bharti Mittal, Chairman, Bharti Walmart said, “The opening of the first Best Price Modern Wholesale store in Rajasthan marks Bharti Walmart’s commitment of providing an unparalleled retail experience, backed by a range of quality products at the lowest prices to the local kirana stores and local businesses.

We are confident that this rollout will create additional employment opportunities to the local youth and help in further strengthening the economy of the state.” Speaking on the occasion, Mr. Raj Jain, Managing Director and CEO, Bharti Walmart Pvt. Ltd. said, “Bharti Walmart’s mission is to save people’s money so they live better.

In India, out of the estimated 12 million kirana stores, only 10 percent or so are supported directly by large FMCG companies directly. Our Business-to-business Best Price Modern Wholesale cash-and-carry store in Kota provides to our members the benefits of price, convenience, choice, quality and hygiene.

I dedicate this first Best Price Modern Wholesale store outside Punjab, in service of the small traders and businesses, kiranas, hotel and restaurants owners and institutions of Kota.”

The Best Price Modern Wholesale store stocks about 5,400 items, including a wide range of fresh, frozen and chilled foods, fruits and vegetables, dry groceries, personal and home care, hotel and restaurant supplies, clothing, office supplies and other general merchandise items, which are available at competitive wholesale prices, allowing retailers and business owners to lower their cost of operations.

The Best Price Modern Wholesale store will also have the successful ‘Mera Kirana’ program which shares best practices with members, who are small and medium retailers, on various aspects of using low cost modern techniques and processes such as assortment planning, layout and fixtures, displays, backroom, licenses, safe food handling, customer retention and value added services.

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The joint venture that only operates cash-and-carry stores in India as per Indian government FDI norms, will begin charging students Rs2,000 each at its training centre in Amritsar and others expected to come up in the state.

“To enforce seriousness among students, the government of Punjab would like students to deposit Rs2,000 at the start of the course. This amount will be refunded on completion of the course, except for a nominal sum of Rs200 that will be retained as administrative fees,” a Bharti-Walmart spokes-person confirmed.

The centres train students to become employable in the retail industry and are set up in collaboration with the local government.

The company gives 100% scholarships to all students enrolled at the Amritsar and Delhi training centres, making the training free of cost. The sudden change emanates from the state government’s observation that students at its Amritsar centre were not serious and uninterested in acquiring retail-oriented skills.

“Since the training is free, kids don’t take it seriously. If they appear for classes, they don’t appear for exams. If they appear for exams, they don’t pass,” says Punjab principal secretary for employment DS Bains. With only 40% of the students able to get jobs as against the expectation of 100%, the government feels billing the students is a necessary step.

Mr Bains feels the additional incentive of getting 90% of the fee back on passing out, apart from being placed in the retail industry, would encourage students to be more serious about the course.

Bharti-Walmart started the first training centre in Amritsar in 2008, six months before the company entered the Indian market with its first cash-and-carry outlet at the same location. The retailer has established another training centre in New Delhi in July, where it is expected to train approximately 125 candidates each month.

The skill development programme is the first of its kind for Wal-Mart in the world.

The training centres provide technical skills in modern retail and allied sectors like logistics, supply chain and support services. Each centre needs about Rs1-crore investment. To date, over 3,100 students have been certified at the training centres and more than 1,100 have been placed in various jobs, out of which 168 have been employed in Bharti-Walmart’s Best Price cash-and-carry stores.

Centum Learning, a Bharti Associate company that develops special curriculum for these centres in collaboration with Wal-Mart, said earlier this month that successful candidates have joined leading companies such as Bharti Airtel , Coca-Cola, McDonalds, GE Countrywide , Mobile Store , Fossil, Swarovski, Reliance Fresh, Tata AIG, Ray-Ban, Pierre Cardin, PepsiCo and Wipro , among others.

Bharti-Walmart’s other CSR activities include farmer training programmes for better yield and training programmes for kirana owners to increase sales.

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“We have written to the finance ministry for removing the 25 per cent cap on the cash and carry,” Bharti Walmart Chairman Rajan Bharti Mittal told reporters here. The Bharti group has a wholly-owned retail arm, Bharti Retail which runs the ‘Easyday‘ stores. The government had yesterday relaxed FDI norm thereby lifting restriction that required retailers to source products from FDI-backed group wholesale firms only for internal use.

“This is just half the job done,” Mittal said, adding the relaxation should have been done long ago. He, however, said the latest relaxation of norms will result in increased business. ”Offtake will obviously go up. Other companies will also buy from us,” Mittal said, but did not specify what kind of impact it will have on the company’s bottomline.
     
Asked about further relaxation of FDI norm in the retail sectors, he said: “We have asked the government to allow 49 per cent FDI in multi-brand retail to begin with and see how it helps the economy.” Commenting on Bharti Walmart’s expansion plans, company Managing Director and CEO Raj Jain said the firm plans to open 12-15 stores by March next year, up from three stores now. The company’s stores are branded as ‘Best Price Modern Wholesale’.
    
“By March next year the intention is to have up to 12-15 stores. The number is much more than what was originally planned, when the JV was set up,” Jain said. When the JV was announced in 2007, the initial plan was to set up 15 stores in five years. By the end of this calendar year, the firm will enter Rajasthan and Madhya Pradesh with a total of five stores, Jain said, adding Andhra Pradesh, Karnataka and Maharashtra are the states that are being looked at by the country to set up stores.

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“Our plans on the cash and carry business to open 15 outlets by end-next year is on track. We are opening 4 outlets in Rajasthan, Madhya Pradesh, Vijayawada and Hyderabad by mid- next year,” Bharti Walmart’s Head, Raj Jain, told reporters on the sidelines of the Retail Forum here, today.

Bharti Enterprises and US-based Wal-Mart Stores entered into a joint venture in August 2007 and started cash-and-carry stores named ‘BestPrice Modern Wholesale‘ in 2009. On its sales, Jain said a good monsoon and a good growth in the economy this year is likely to boost overall sales.

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“We are planning to open more retail stores. The number of retail stores will go up to 140 by December. We presently have 100 stores,” he said. The firm will be looking at south India next year. “This process is on. Andhra Pradesh and the south will be our foray. We will also set up cash-and-carry stores here,” he said.

The company plans to invest $2 billion in the next 10 years. Mittal said it was close to its yearly expansion plan. Mittal, who is also president of the Federation of Indian Chambers of Commerce and Industry (FICCI), was talking to reporters on the sidelines of its national executive committee meeting.

Bharti has two distribution centres in Haryana and Punjab. It has also tied up with 150 farmers in Punjab to buy vegetables directly from them on a trial basis. Mittal said this was only a small beginning and pointed out that Walmart had tied up with 400,000 farmers in China and was procuring $25 billion worth of manufactured goods in that country.

He said FICCI was happy at the government proposing to allow 49 percent FDI in multi-brand retailing and pointed out that the industry body had responded to the discussion paper on the subject. “Let the government get the feel of it. What value it can add. As an industry it is only at the starting point. It should create an ecosystem and a conducive environment on agriculture, logistics, foodgrain and also manufacturing,” Mittal said.

FICCI has voiced some apprehensions, especially with regard to the restriction that such stores should be allowed only in cities with a population of one million. Mittal wants access to cities of over 200,000-250,000 population. “It is in the smaller cities that the kind of availability is very low, choices are low, hygiene is low. We need to go there and bring a change. If the government wants to do a test trial we will be willing to do so,” he added.

Mittal forecast that the modern or organized retailing, which currently stands at 4-5 percent, will grow to 20 percent in 10 years. “That is how the benchmark is if you see Brazil, Mexico and China. After 10 years, the modern retailing was 15-20 percent and India is no different. There is enough scope for everybody to play,” he contended.

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It plans to have 125 Easy Day supermarkets and 13 Easy Day Market hypermarts by the end of the year, a company spokesman said. It currently operates 60 Easy Day stores across Punjab, Rajasthan, Haryana, Delhi and Uttar Pradesh and six Easy Day Market stores across Punjab, Rajasthan and Uttar Pradesh.

“The fall in rentals and the real estate prices has benefited us immensely,” he said, adding that all the new stores this year will be in North India. But in another five years Bharti Retail plans to be present in every city in the country with a population of more than one million. It will invest up to $2.5 billion to add about 10 million square feet of retail space in the country by then, the spokesman said.

Meanwhile, Bharti’s wholesale partner Wal-Mart is spending millions to shop its way into India’s lucrative retail market. The giant from Bentonville has spent $11 million, or more than Rs 52 crore, on lobbying on issues related to India since signing the joint venture with Bharti Retail in August 2007, according to lobbying disclosure reports filed by the company before the US Senate. Lobbying is legal in the US.

Organised retail, estimated at $30 million, accounts for less than 10% of India’s $375-billion retail market, but is growing at an impressive 13-14% annual rate.  When contacted, Raj Jain, managing director and CEO of Bharti Wal-Mart, said, “Our view is that FDI in India should open in multi-retailing. We believe it is good for India and for the development of a robust supply chain.”

The equal joint venture between Bharti and Wal-Mart plans to open up to 15 cash-and-carry stores and employ about 7,000 people over the next three years, a company spokesman said. He credited the softening of real estate prices and positive response from the two partners for an acceleration in expansion plans.

In 2007, the company had talked about opening 10-15 stores in seven years.  The company in April opened the second Best Price Modern Wholesale store at Zirakpur near Chandigarh after opening the first one in May 2009. It now plans to open the third one in Jallandhar within a couple of months.

It has also signed deals for stores varying between 50,000 sq ft and 100,000 sq ft in Rajasthan and Madhya Pradesh, Mr Jain said. Meanwhile, buoyed by a pick up in consumer demand after last year’s slowdown and reasonable property rentals, other retailers and cash-and-carry players are also ready with a second wave of expansion.

German firm Metro Cash and Carry, which became the first foreign wholesale player in India when it set up in Bangalore back in 2003, recently signed a memorandum of understanding with the Punjab government to open six cash-and-carry outlets in the state for an estimated Rs 900 crore.

Vishal Sehgal, head of corporate relations at Metro Cash & Carry India, however, refused to give timeline for the project. “With our model of investing in own land and making our own construction, things tend to progress slow,” he said. Currently, Metro has five outlets across Bangalore, Mumbai, Hyderabad and Kolkata.

Khet-Se Agriproduce India, a joint venture of Tata Chemicals and Ireland’s Total Produce Plc, too plans to go nationwide, its chief executive officer GR Goves said.  The cash-and-carry player, which operates two outlets in Ludhiana and supplies supplies bananas, grapes and other fruits and vegetables to Reliance Retail, Bharti Easy Day, Aditya Birla group’s More and Namdhari Fresh, recently opened a shop in New Delhi.

Spencer’s Retail, the Sanjiv Goenka-led retail arm of RPG Group that opened only four to five large format stores last year, plans to add 15 large format stores in 2010 by investing close to Rs 100 crore. It will increase its trading area by at least 50% from the current 1 million sq ft and focus on the National Capital Region, West Bengal, Maharashtra, Tamil Nadu, Karnataka and Andhra Pradesh, a company spokesman said.

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The company is lobbying with the US Congress members as also the departments of commerce, trade and treasury, among others, to put forward its case on issues like “discussions on India and Foreign Direct Investment”, and “enhanced market access for investment in China and India.”

Its presence in India is limited to business-to-business wholesale market and back-end supply chain management business through a joint venture with Sunil Mittal-led Bharti group and it has been trying for many years now to enter Indian retail market, as India does not allow foreign direct investment in multi-brand retail business, in which Wal-Mart specialises.

The company had signed the JV with Bharti Retail in August 2007 and soon after that it began lobbying with the US lawmakers about its India plans. As per the lobbying disclosure reports filed by the company with the US Senate, Wal-Mart has since then spent a staggering amount of over $11 million (more than Rs 52 crore) on issues related to India, as also other matters, in over two years now. In 2010 itself, the company spent $1.37 million (over Rs 6 crore) on lobbying in the first quarter.

Lobbying is legal in the US and the companies are required to submit a disclosure of the same every quarter. Interestingly, the latest quarterly lobbying disclosure report comes amid speculations that India might soon propose to permit 100 per cent FDI in multi-brand retail, a development which would allow Wal-Mart to enter Indian retail market.

On many occasions, the top officials of Wal-Mart, which already sees nearly half of its sales coming from outside the now-stagnating US market and is looking to expand further internationally, have said that India is very important for their future growth.

In February this year, Raj Jain, CEO of Bharti Wal-Mart, the Indian JV, had said that he was optimistic of India allowing FDI in the front-end retail sector, given the “progressive” nature of the current government.  Besides its wholesale retail venture, Wal-Mart also provides back-end supply chain management and technical support services to Bharti Retail, which independently operates front-end retail stores.

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Venting out his frustrations over restrictions on foreign investment in the retail sector, Mittal said a political decision needed to be taken at the earliest, else the country will lose out on getting billions of dollars of foreign funds into the sector. “If retail is good, please allow FDI in multi-brand retail. If it is bad, let’s stop talking about it,” he said.

Questioning the rationale of not allowing foreign investment in multi-brand retail under the pretext that organised retail would wipe out small kirana and neighbourhood mom-and-pop stores, he said already big domestic retailers are in market and no such impact has been seen.

“The government has allowed domestic big companies like Bharti, Reliance, Birlas, Spencer group and Kishore Biyani’s Future group, these could have also hurt the kirana strores, but that hasn’t happened,” he added. Currently, the government allows 51 per cent FDI in single brand retail but none in multi-brand, while 100 per cent in wholesale business.

Mittal said government should immediately consider allowing at least 49 per cent FDI in multi-brand retail if not more, as this sector doesn’t pose “any security threat” unlike in telecom and defence.

He, however, said that Bharti Retail, as announced earlier, is on track to invest USD 2 billion by 2018 and would open 150 stores by the end of 2010. Bharti Retail, currently, operates around 70 outlets of its ‘easyday’ stores across the country, including six large format ‘easyday Market’ hyperstores.

In 2007, the company had stated that it envisaged having a pan-India operations with approximately 10 million square feet of retail space cities across with a population of over one million. It had estimated employing about 60,000 people, including ex-servicemen and women.

Bharti Enterprises has also a joint venture with Walmart, the world largest retailer for cash and carry business and runs the ‘Best Price’ stores.

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According to sources, the retailer is also scouting for properties and Western and Central India to open stores and is holding talks with property developers in this regard. The chain has hired a dozen persons to scout and book the properties, sources said. On Wednesday, Mukesh Ambani’s Reliance Retail announced its growth plans, focussing on hypermarkets and world-class infrastructure.

“Considering Bharti’s original plans to have 10 million sq ft by 2015, it has a lot to catch up,” said an analyst who did not want to be quoted. In February 2007, when Bharti announced the foray into retail, it talked about investment of $2-2.5 billion by 2015 and $5 billion in revenues. When contacted, a Bharti Retail spokesperson said: “Bharti Retail has announced plans to increase the number of retail stores to about 140 across India by end of this year and in support of this plan, we are sourcing real estate, pan-India.”

Bharti Walmart, the joint venture between Bharti Enterprises and Walmart, the world’s largest retailer, is also expected to open cash and carry stores in the South in the next 12-24 months. Earlier, the chain said it wanted to expand presence in one region, North in this case, before entering new regions. In sharp contrast to Bharti’s strategy, new entrants such as Reliance Retail and Aditya Birla have launched their operations from the South and expanded other parts of the country.

For instance, while Reliance Retail opened its first store in Hyderabad, Aditya Birla Retail acquired south-based retail chain Trinethra in late 2006 to launch its operations. According to Susil Dungarwal, founder of Beyond Squarefeet, a mall advisory firm, southern cities such as Bangalore and Chennai offer reasonable retail rents compared to other cities and limited supply. “South offers quality real estate at affordable rents,’’ he says.

Currently, Bharti has a total of 70 stores, including 64 Easy Day stores and six Easy Day Market stores, in Punjab, Haryana, UP, Rajasthan, among others. The retailer recently appointed former Hypercity CEO Andrew Levermore as its chief operating officer to spearhead operations. Retail consultants say Bharti Retail will have to face challenges in scaling up in South as the region already has a established organised retail market with the presence of majors such as Spencer’s, Aditya Birla, Reliance Retail, Nilgiris, among others.

According to estimates, India has a total retail market of $385 billion and organised retail accounts for five per cent of that. The share of modern trade is expected to touch 14 per cent by 2013. The penetration of modern trade is expected to be as high as 25-30 per cent in the South, compared to five per cent elsewhere in the country.

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On the appointment, Mr. Rajan Bharti Mittal, Vice Chairman and Managing Director Bharti Enterprises said, “We are delighted to have Andrew Levermore on board. His appointment underlines our philosophy of bringing in best in class and global talent. I am confident that Andrew’s rich experience in the international and India markets will add immense value to Bharti Retail’s operations. I wish him the very best for his new assignment.”

Andrew began his retail career with the Edcon Group in South Africa and progressed to divisional management level before moving to the UK to join the House of Fraser where he had various General Management roles. Andrew has also been Managing Director of Guys & Girls, and Managing Director of The Hub, a department store chain and Sheet Street a home-ware chain, both in South Africa. Prior to joining K. Raheja Corp., Andrew had a senior management responsibility in buying and merchandise management with Makro, South Africa.

Andrew is extremely well traveled and has sourced products from most parts of the world. He is married and has three children.

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