Reliance Retail expands Smart Bazaar stores in small towns
Reliance Retail, the retail arm of Reliance Industries, is growing its Smart Bazaar stores in small towns throughout India, per The Economic Times. CEO Damodar Mall sees consumer growth in these feeder markets as more interesting. He said, "In the Supermarket India that I see—in modern stores or on digital apps—there are no signs of any downward impact on discretionary spending." This view contradicts some retailers and analysts who think discretionary spending has recently been under pressure.
Faster growth in home, personal care, and general merchandise categories
Mall points out that home, personal care, and general merchandise categories are growing faster than the overall store for Reliance Retail. Smaller towns like Nokha and Sikar in Rajasthan, Armoor and Banswada in Telangana, and Raygada and Simliguda in Odisha have shown strong demand trends. Reliance Retail operates various store formats, including Smart Superstore, Smart Point, Smart Bazaar, Fresh Signature, Freshpik, and 7-Eleven.
FMCG companies need to adapt to market growth
According to Mall, FMCG companies facing a slowdown in modern trade may need to adapt to grow with the market. Rural market demand has been weak due to factors like persistent inflation and uneven rains. However, Reliance Retail has been driving sales of its FMCG products, such as soft drinks, confectionaries, biscuits, soaps, dishwashing bars and liquids, toilet and floor cleaners, and laundry detergent.
Reliance Retail's grocery segment reports 33% yearly growth
In this year's second quarter, Reliance Retail's grocery segment reported a 33% yearly growth. The company saw strong demand during the festivals in the quarter. However, leading FMCG makers like HUL, ITC, and Nestle expressed concern over uneven rains and rising commodity prices. Mall stressed the need for FMCG companies to think differently about premiumization for urban, modern trade, and rural consumers to drive market growth.
India outperforms APAC in the consumer goods sector
The Indian market has outperformed the rest of Asia Pacific, including China, for some of the biggest global consumer goods companies in the past quarter. According to post-earnings management commentaries, India has been the top scorer in APAC for these companies. Additionally, data shows that employee productivity of India Inc., measured as revenue per employee, has steadily increased in the past five years, while staff costs have remained at around 10% of total revenues.
