Reliance Fresh SWOT ( 3
The Indian retail market accounted for $ 200 billions. Food accounts for over two-thirds of the $200-billion Indian retail market. Yet, it has seen less than 1 percent penetration by modern retail so far.Reliance industries which always looking for new business opportunities juststarted a new era with its introduction of new concept stores named RelianceFresh with opening convince store in high streets of Banjara hills of Hyderabad.Reliance Fresh is very different from what modern retail has offered in India sofar and with this reliance is planning to establish strong retail network in India infood and farm sector. They have started with new eleven stores in the last weekand they are thinking to add 100 more stores to their feather by the end of thisyear.Let’s do a SWOT analysis on the Reliance Fresh.
Reliance is the first into enter into this unorganized sector of vegetables andfruits. According to them its intentions to have100% farm fresh foods in theirnew retail stores. It is also adding shortly a juice bar, and even a large counterfor puja flowers. In fact, over 60 per cent of the floor space has been dedicatedto fresh fruits and vegetables, the rest to other food products like staples, spices,bakery, etc. But reliance has decided not to add any bar soap or toothpaste anddetergent in its shelves. So by using this strategy they are positioningthemselves different from other players of the industries like Food world, BigBazaar and Nilgiris. But over come the short comings of these specialized storesthey are also introducing new Reliance full-fledged supermarket called ShakhariBhandar which offers each and everything from the staple to soap. Most of thestaples are under its own private label brand — ‘Reliance Select’. There is a 500gchanna dal pack priced at Rs 28, a 500g urad dal pack for Rs 39, all underReliance’s own brand. Excepting a few packets of Nestle’s Maggi, or MTR’smasalas or Pepsi’s Lays chips, there is very little shelf space given to the bigbrand owners in the country. Reason: private labels offer far better profit marginto the retailer than branded products of FMCG companies. Most of these outletswill need only 2,000-5,000 sq. ft. A supermarket may need as much as 8,000-10,000 sq. ft.
This is definitely an interesting business venture but it may miss out on theopportunity to capture a greater share of the customer’s wallet. For customers,too, this could be irksome, as they would have to visit another store to pick upessentials. Reliance could easily fix this problem by adding a few small countersfor some basic non-food products. According to their official this format is notfinal one they are accepting the new changes which are required to attract thelarge number of customers.