Bharti and Wal-Mart mull neighbourhood store format

The $320 billion revenue global retail leader, Wal-Mart, better known for its large store format stores like supermarket chains, may adopt the neighbourhood store format keeping in mind the Indian consumer's preference for this model — and the political sensitivities on allowing small kirana (grocery) stores to be crowded out by foreign retailers.

Foreign multi-brand retailers are debarred from competing with small stores in India and Wal-Mart has tied up with Bharti Enterprises to gain a toehold in the country.

The two plan to explore the neighbourhood market concept because groceries are one of the largest retail categories with the least organised retail competition in India.

While the Left Parties fear that entry of multinational retail players would slowly price out the estimated 13 million small family stores, Congress president Sonia Gandhi too has advised the Manmohan Singh government to rethink the policy on FDI in retail.

Even though fully opening up retail sector to foreign players still remains an issue, domestic petrol and petrochemical major Reliance Industries has entered the field and already boasts of over 40 neighbourhood vegetable and grocery stores across five cities.