Aditya Birla Retail, the retail arm of the diversified Aditya Birla Group, is looking at reorganising its format and shifting focus from food and grocery business to apparel and general merchandising business.

“Apparel is a great upside for us in terms of both revenue and margin. Presently at hypermarket level we are at 56:44 product mix where 56 per cent is food and grocery and balance is general merchandising (toys, leisure, sports, plastic), consumer durable and apparel. We would like this ratio to go up to 50-50. We want to build on all the non-food and grocery categories and allot more space to these with a special focus to apparel which we want to grow disproportionately,” said Thomas Varghese, CEO Aditya Birla Retail.

The retail chain is also looking at reshuffling the product mix at supermarket level. “Our supermarkets are mainly food stores with 90 to 95 percent food items. However, general merchandising being the key margin driver (with 30 per cent margin, against 20 per cent in FMCG and even lesser than that in fresh), we are looking at increasing its proportion in the super markets. And for that we are creating space by increasing the rack size from 5 feet to 7 feet,” added Varghese.

The chain has declared that it will be adding on 1 million sq feet to its existing 2 million sq ft presence in the country this year. “We will add 12 hypermarkets of 7,20,000 sq feet area and 150 supermarkets of 3,75,000 sq feet area at the cost of Rs 300 crore,” said Varghese.

The retail chain has laid out an elaborate plan to build up the apparel category. They have divided the entire category into three divisions- core offering, core fashion offering and fashion offering and prices for both men’s and women’s apparel will be starting as low as Rs 150.

Not just apparel, in other categories too, the retail chain claims to be priced at around 8-10 per cent lower than its competitors. The chain will offer a blend of brands like Peter England, Belmonte, Levis, Adidas among others and private labels (such as Truth). “We are trying to build up our private labels in apparel and accessory category, ” said Varghese.

Although the focus now is on apparel and general merchandising business, the food and grocery category would continue to have its relevance for the chain, said Verghese. “Although we have very less margin on these categories but it happens to be very important as it gets people to the stores on a daily basis,” he added.

The company closed last financial year with a turnover of Rs 1,650 crore and expects sales of Rs 2,400 crore by the end of this financial year. The key drivers of growth would be store growth (around 16 per cent), and the rest from

expansion and margin growth.