Recession won’t hit small buys, says Big Bazaar's Biyani

Kishore Biyani's future group is confident that its new direct-selling venture, Big Bazaar Direct, will be a success despite the ongoing economic slowdown, as a good monsoon and an election year ahead will help retailers.

''The consumer wants to enjoy small joys of life, even if he is deferring spending on big-ticket items. That's why we are seeing double-digit same-store sales growth,'' Biyani said at the India Retail Forum 2013 in Mumbai on Wednesday.

''In our central format, we are seeing 20 per cent same-store sales growth,'' he said.

On the Reserve Bank of India's plan to increase interest rates and clamp down on interest-free instalment purchase schemes, he said, ''Consumers will not stop spending just because rates have gone up or zero per cent schemes have stopped. Consumption is dependent on the festive and wedding seasons and people save up to buy things.''

At the same time he added, ''The zero per cent interest EMI (equated monthly instalments) schemes definitely help sales ... it is an anti-consumption move [by the central bank] added.

He said the new Big Bazaar Direct venture might become a larger success than his present flagship Big Bazaar stores. Big Bazaar Direct is a franchisee-based model, where the franchisee will visit consumers and take orders, to be delivered in three to seven days.

"Our country does not have good internet or credit card penetration, so human intervention is a must," Biyani said.

Big Bazaar Direct plans to rope in 'kirana' or small dry grocery shops and offer more opportunities to help them grow their business.

"It is a model on a table. If it works well, it will be bigger than Big Bazaar," Biyani told reporters on the sidelines of the forum.

He further said the new format has already been launched in some parts of Vidarbha district in Maharashtra and will be expanded to the north-eastern parts of the state and Gujarat in the coming months.

"Through this partnership, franchisees will be able to offer an additional 2,000 SKUs (stock keeping units), without having to build inventory. They should get business worth Rs40-50 lakh a year easily," he said.