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AP rolls out red carpet for Reliance Retail

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(Following is the second in the special series on retail from states)

Reliance Industries’ retail foray in Uttar Pradesh, West Bengal, Maharashtra and Orissa may have seen red, but in Andhra Pradesh it was given the red carpet as the state government felt “it was in the interest of farmers and it would have positive impact.”

Hyderabad, known also as Cyberabad, was selected by Reliance Industries to launch its first retail outlet, Reliance Fresh, in September last year, thus kicking off its ambitious Rs 25,000 crore retail project.

Currently, the company has over 35 outlets in Andhra Pradesh, including 25 in the twin cities of Hyderabad and Secunderabad, while others are located at Vijayawada, Visakhapatnam and Guntur. It is planning to further expand its footprint in the state.

The average area of Reliance Fresh outlets in the state ranges from 2,600 square feet to 4,000 square feet. The company has 30 procurement centres in Andhra Pradesh.

“We are ready to roll out the red carpet for them. We need big retail outlets,” an official of the state industries department said.

The retail sector found an ardent supporter in Chief Minister YS Rajasekhar Reddy, who, though known for his pro-farmer image, rubbished the argument that entry of retail would adversely affect the farmers and small shop-keepers.

“Be it big or small retailers – I welcome all to the state of Andhra Pradesh to set up supermarkets or hypermarkets, or whatever else they like. I am not interested in commenting on the stand taken by other states toward organised retail, but in my state I have no doubt about its progress. Our experience in the past one year with the so-called corporate retailers is that they are able to give better prices to the farmers, and at the same time ensure better products for the consumers at an affordable price. If the people of AP are happy, why should the government run against organised retailing,” Reddy had told Indiaretailing.

Speaking about the merits of organised retail chains, Reddy claimed: “Organised retailers are giving better rates to farmers and better deals to consumers; and I think we should encourage this. I don’t see any threat for small shops, if a big retail store opens. They will also have their own way of earning from the retail pie and will flourish along with the big ones.”

“One should understand the basic fact that organised retailing is minuscule. It may sometimes hurt mediators and brokers in the farm trade business, but not anybody else. Overall efficiency and productivity have to improve in this era of globalisation and liberalisation. Even farmers will not be happy if productivity does not go up,” Reddy shared.

According to officials, there was a need to encourage big corporates to get into retail sector to eliminate the menace being posed by brokers and mediators in the farm trade business.

“Organised retailers will try to increase their turnover and reduce their margin. They give better deal to farmers as well as consumers,” the officials said.

AP has become the first state to attain 100 per cent retail literacy, it seems.

– Hyderabad Bureau, and Vishnu Rageev R, Bangalore Bureau

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