Reliance Retail Expands Trading Area in Grocery Stores to Boost Margins

Reliance Retail, India's top retailer, is expanding its trading area for non-food and general merchandise in grocery stores by 50% to enhance margins. This strategy aims to bolster their hyper-local e-commerce platform, Jiomart, connecting Smart and Smart Bazaar stores. The move targets margin improvement through strategic space allocation and category mix management.

Reliance Retail, the largest retailer in India, has announced a 50% increase in trading area for non-food and general merchandise in its grocery stores. This strategic move aims to boost margins and enhance the retailer's hyper-local aspirations through its e-commerce platform Jiomart, connecting Smart and Smart Bazaar stores.

According to a senior industry executive, the space revision will allow Reliance Retail to allocate more trading areas for higher-margin non-food and general merchandise items. This initiative will fill gaps in the retailer's offerings, especially in big box formats like SmartBazaar, which aims to cover the total consumption basket of a family.

Reliance Retail's EBITDA margin for the June quarter was 8.2%, with an annual margin of 8.5% for FY 2023-24. The company plans to compete with quick-commerce platforms through Jiomart by investing in technology and supply chain capabilities.

(With inputs from agencies.)