Godfrey Phillips woos Reliance, Tata & DMart to put 24Seven in their bags

New Delhi: The KK Modi Group-backed Godfrey Phillips is in talks with Tata Trent, Reliance Retail and Avenue Supermarts to sell retail grocery chain 24Seven, said executives aware of the development.

Godfrey Phillips India had said in an exchange filing on April 12 that it plans to exit the loss-making 24Seven convenience chain "following a detailed review of the company's retail business division".

The negotiations will hinge on valuation, said one of the persons cited.


"The (Modi) group leadership has held talks with groups which have obvious synergies, as of now. The talks are at different stages," the executive said.

Scalable Format
24Seven operates about 145 stores in the Delhi-National Capital Region (NCR), Punjab and Hyderabad.

Launched in 2005, the chain offers grocery, staples, snacks, beverages, personal care products, the Modi group's own beauty brand Colorbar, as well as ready-to-eat food counters at some of the larger format stores. "Grocery retail has significant upside, and the 24Seven format is scalable as a blend of hyper-convenience grocery, staples, general merchandise, and even small in-store cafes, despite current accumulated losses," said the executive cited above.

Trent Ltd, the retail arm of the Tata Group, operates grocery chain Star Bazaar. But grocery remains a small part of the diversified group's overall retail business and 24Seven may only add incremental value, another executive said. Trent's other retail chains - Westside and Zudio - have grown and expanded faster than Star Bazaar.

Reliance Retail Ventures operates close to 50 stores under the 7-Eleven brand as master franchise partner of the Texas-based chain, having started in 2021.

"A potential acquisition could lead to Reliance merging its own convenience store chain with 24Seven - both formats are similar," another executive said.

Avenue Supermarts, operator of DMart stores, sells general merchandise and apparel, but its business is largely grocery-focused, and it's looking to expand this segment aggressively. The chain reported 7% growth in revenue per store and 13% year-on-year increase in store additions for the quarter ended March, up 20% over the corresponding year-ago quarter.

Modi Enterprises managing director Samir Modi didn't respond to queries. Spokespersons of Tata Trent and Avenue Supermarts declined to comment.

A Reliance Retail spokesperson said in an email: "As a policy, we do not comment on media speculation and rumours."

FY23 Revenue
Godfrey Phillips' retail business division reported revenue from operations at ₹396 crore in FY23, or 9.3% of tobacco maker's total. However, its retail business division declared a negative net worth on account of accumulated losses as of March 31, 2023.

"After due consideration of the stakeholders' feedback, long-term performance of the division since inception, prevailing market conditions of the retail sector and long-term business strategy of the company, the board... has decided to exit... its retail business division," Godfrey Philips had said last week, while announcing the move.