On a roll

Calcutta, June 11: Pantaloon Retail (India) Ltd, on a 100 per cent year-on-year growth trajectory, is planning to cushion itself against the rising property prices with its own mall development and property management firm.

However, its lifestyle products might become costlier by 6-10 per cent due to fluctuating input costs. The value retail chain will remain unaffected this fiscal.

“We have been lucky to have signed with mall developers when the going was not so expensive. This is especially true in cities like Calcutta and Jaipur where property prices have gone through the roof. It is an area where Pantaloon’s mall development companies would help in absorbing the costs within the group,” said Rajan Malhotra, chief of value retail at Pantaloon.

According to industry estimates the property prices have gone up by 30 per cent in the last six months.

The company is cautious not to pass on rising costs this fiscal to consumers through its value retail chain formats, which include Big Bazaar, Food Bazaar, Electronics Bazaar, Furniture and Mobile Bazaar and Fashion Station. Pantaloon follows the July to June financial year.

“Since the last five years, despite the rising cost of plastic, steel and other commodities, Big Bazaars, which might comprise all other formats, have not hiked prices across the country. Nonetheless, strong inflationary pressures would be felt throughout this year,” Malhotra said.

Under such pressures it is important to have cost effectiveness built into the logistics system, he added.

According to a study conducted by the Centre for Monitoring Indian Economy, logistics cost account for 10-12 per cent of the GDP and inventory costs comprised $22 billion, or 22 per cent of the total annual sales in the economy.

The company caters to the lifestyle segment through its 18 Pantaloons stores and three Central Malls. The value chain has 27 Big Bazaar hypermarkets, 43 Food Bazaars and five Fashion Stations.

The company plans to have more than 70 Big Bazaars by July next year.

In 2006, Calcutta will get two more Big Bazaars, while Haldia, Darjeeling and Guwahati will have one each. The additional 40 Big Bazaars planned in 83 cities are in various stages of development.