Tata's Star Bazaar faces realty roadblock

By Vivin Mathew & Nachiket Kelkar, CNBC-TV18

Tata's retail company Trent today opened its fourth Star Bazaar hypermarket. But the company has just managed to open four stores in four years and the main cause is real estate issues that have caused this snail-paced growth.

It may look spanking, spread over 75,000 sq ft with over 2,50,000 products, but looks may be deceptive. The Star Bazaar hypermarket is only the fourth that the Tata's have managed to open in the last four years. And the company blames its laboured growth on indian retailer's biggest foe: the lack of reasonably priced real estate.

Star Bazaar only opened four stores in four years. Now, it says it will open 50 in five years. But off-camera they admit that a significant number of their stores have been delayed by property issues.

A failure to tackle those issues means that the Tatas are way behind the competition. Take for instance, Big Bazaar, which has opened almost a hundred stores in the last seven years.

Noel Tata, MD, Trent, said, “Especially for hypermarkets, property is a major and significant cost in our business and getting a right property is a key factor to the success of hypermarkets.”

Hoping to still make a success of its hypermarket venture, Trent said it will invest up to Rs 2,000 crore over the next four years. And its major focus will be cities in the west and south on the country. But if it wants to reach its target of 50 stores in five years, it will have to tackle its real estate issues better than it has done in the past.