Reliance Retail may modify back-end plans
The outcry from farmers and the traders lobby across several states appears to have upset the organised agri-retail applecart for a whole cluster of retail majors. Nearly all of them, including Reliance Retail, Subhiksha and Spencer’s are treading...
KOLKATA: The outcry from farmers and the traders lobby across several states appears to have upset the organised agri-retail applecart for a whole cluster of retail majors. Nearly all of them, including Reliance Retail, Subhiksha and Spencer’s are treading the ground carefully. Mum’s the word at an official level. But information trickling in from the industry indicates senior executives are getting into a huddle in trying to thrash out future course of action. Some options under review include reworking the existing sourcing mechanisms and fate of the front-end expansions as well as of the proposed investments in the supply chain.
Reliance Retail is exploring options to modify its back-end plans. The company, with a nationwide network of some 100-plus collection centres for direct sourcing of agricultural produce from farmers to achieve price competitiveness, has started tapping mandis for such farm produce. Though a Reliance Retail spokesperson declined to comment, company officials said sourcing from the mandis would further gain steam till the situation becomes normal.
“The move is slated to derail Reliance Retail’s mega investment plans to develop an integrated back-end supply chain for their stores. This is a sharp deviation from the group’s business plan and appears to be a move to appease anti-contract farming lobby,” analysts elaborated.
Subhiksha too intends to engage itself with all its stakeholders. “In absence of any clear policy guideline from the government, we have to be flexible in our business model. Though not a much preferred option, we may even work with middlemen in the back-end and derive efficiencies from it,” Subhiksha managing director R Subramanian said. “Any deviation from such direct sourcing models may not be a pragmatic approach since a retailer needs to have a certain level of control over the supply chain.
Reliance Retail is exploring options to modify its back-end plans. The company, with a nationwide network of some 100-plus collection centres for direct sourcing of agricultural produce from farmers to achieve price competitiveness, has started tapping mandis for such farm produce. Though a Reliance Retail spokesperson declined to comment, company officials said sourcing from the mandis would further gain steam till the situation becomes normal.
“The move is slated to derail Reliance Retail’s mega investment plans to develop an integrated back-end supply chain for their stores. This is a sharp deviation from the group’s business plan and appears to be a move to appease anti-contract farming lobby,” analysts elaborated.
Subhiksha too intends to engage itself with all its stakeholders. “In absence of any clear policy guideline from the government, we have to be flexible in our business model. Though not a much preferred option, we may even work with middlemen in the back-end and derive efficiencies from it,” Subhiksha managing director R Subramanian said. “Any deviation from such direct sourcing models may not be a pragmatic approach since a retailer needs to have a certain level of control over the supply chain.
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