Bharti Walmart finds real estate costs a challenge for retail business foray

By: Karshni on 10:49

Bharti Walmart, the joint venture between Bharti Enterprises and Walmart Stores Inc, views limited availability of real estate space coupled with high real estate costs as one of the major challenges before its Indian retail foray, said a top official. 

This is in the backdrop of government's restrictions on foreign direct investment (FDI) into multi-brand retail sector wherein the MNC retailers are allowed to open stores only in those cities with a minimum of 10 lakh of population. 

Bharti Walmart also sees bad supply chain environment in big cities as another key challenge before its retail foray in view of restrictions on inter-state movement of goods, which could be addressed only through early introduction of goods and service tax (GST). 

Talking reporters in Hyderabad on Wednesday after launching Bharti Walmart's wholesale store, 3rd in AP and 18th in India, Raj Jain, Walmart India president and Bharti Walmart MD & CEO, said the joint venture partners hope to firm up their strategy for retail foray in 4-6 weeks. 

Jain said the strategy includes working out equity structure for the retail joint venture among the partners who currently hold equal stakes in the wholesale venture. The partners hope to roll out their first Indian retail store in 12-18 months, he said, adding that it was little early for them to announce the retail investments as the policy was very new. 

"The largest challenge has to do with real estate in large cities where FDI has been opened up. Unfortunately, the availability and cost of real estate in India is very high and we are a low price retailer. If we pay too much of rentals, we cannot offer great prices to our customers," said Jain.
Source : ET