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Trent Hypermarket on an expansion spree

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The joint venture of Trent Hypermarket and Tesco is now reshaping itself after a meticulously worked upon expansion. By the next fiscal, the chain will be opening 20-30 stores in Maharashtra and Karnataka which have been given permission for a foreign direct investment (FDI) in multi-brand retailing.

It would be the biggest number of store openings which was ever planned, with a capital expenditure of Rs 100 crore. As of now the chain runs 22 stores in Star Bazaar, Star Daily and Star Market brands.The first Star Bazaar opened in 2004 in Ahmedabad, but it expanded and came in full form only after 2009.

In March 2014, Tata owned Trent and Tesco made an agreement for an equal JV. New stores are coming up in Mumbai, Pune and Bengaluru, along with other big cities in Karnataka and Maharashtra. In FY15, Trent Hypermarket, saw a slump of Rs. 790 crore, in comparison to Rs. 795 crore a year ago, though they are doing all possible efforts to achieve profits.

Keeping in mind the ups and downs, the stores are cutting down on the additional lease rents and hence don’t have required storage facilities. Instead they prefer to restock their products on the shelves on a regular basis as per demand, which would keep them fresh. Some sources say, the stores are also being designed to break faster. Earlier they used to stay intact for five to six years, but now they go down in 18 – 20 months.

To solve this issue the sellers have started keeping only those commodities whose margins equal or go higher than the lease rent. Star Bazaar as of now occupies 50,000 sq.ft hypermarket stores, Star Daily has 2,000-5,000 sq ft express stores and Star Market is around 5,000 to 15,000 sq ft.

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