Walmart India Is Evaluating A “Food-Only” Retail Model

Now that the government has allowed 100% foreign direct investment in food retail, Walmart India is evaluating the policy guidelines to come up with a ‘food-only’ retail model of their stores in the country.

Walmart India CEO Krish Iyer told reporters at the India Retail Forum Mumbai that they are currently evaluating the policy guidelines and added, “We do not have an ‘only food model’ anywhere. So, we need to conceptualise, evaluate and come up with a model, which takes time. It is not something we will jump into very quickly.”

The government’s move to open up food retail to investment will be beneficial to all stakeholders including retailers, consumers and farmers and it will also increase access to capital which will then promote retail enterprise. For Walmart India, especially, food retail in the cash and carry business accounts for more than 65% of business, Iyer added. “Particularly looking at the importance of food, we do believe that we will continue to focus a lot more on food in our cash and carry stores.”

Iyer also noted that resellers – particularly mom and pop stores – are the most important channel for Walmart. “Our e-commerce (B2B) experience has been good, and while we do not speak about the e-commerce sales, more than 50% of buying is digitally influenced,” he said.

Walmart India is also focusing on private labels – their own being Member’s Mark and Right Buy – but customer buying proposition is much more crucial. Iyer even said that the “idea of private labels is to support the ‘Make in India’ programme”.

Currently, Walmart India operates stores in nine states in the country and in the next five years, the company plans to add 50 more stores, taking the total to 70. “We continue to focus on Tier II and Tier III cities, and the opportunities here are as good as metro towns,” Iyer said, adding that the availability of land is the challenge in most metros, but the company is still looking for good options.