Retail giant Trent is rapidly growing its Star Bazaar chain. In the first quarter of FY25, the number of supermarkets increased from 66 to 72. The chain plans to add 20-25 new stores in FY25, aiming to reach about 90 stores by the end of the year. This follows a previous financial year where they ended with 66 supermarkets. This expansion is part of Trent's strategy to make Star Bazaar a key growth driver, alongside Zudio and Westside. By FY26, Trent hopes to have 110-120 stores across 15-20 cities. The plan focuses on increasing store numbers, making prices more affordable, and boosting private-label products.
Retail major Trent, is aiming to position its supermarket and hypermarket chain, Star Bazaar, as its third growth driver after Zudio and Westside. The company's plan is to accelerate the expansion of Star Bazaar stores, focus on affordability, and aggressively promote private labels under the leadership of the newly appointed executive, Neville Tata, who has joined Trent Hypermarket, the 50:50 joint venture between Trent and the UK-based Tesco that operates the Star Bazaar outlets in India, as per informed sources.
Star Bazaar plans to add around 20-25 new stores in the financial year 2025, taking the total store count to around 90 by the end of that year. At the end of the financial year 2024, Star Bazaar had 66 supermarkets, which increased to 72 in the first quarter of the financial year 2025, covering 10 cities. The plan is to reach around 110-120 stores, covering approximately 15-20 cities by the financial year 2026. A request for comment on Star Bazaar's strategy sent to Trent, the parent company of Star Bazaar, remained unanswered at the time of publication.
Star Bazaar is focusing heavily on private labels, which are products branded by the store itself. In FY24, revenue from private labels rose to 72%, up from 63% the previous year. This is expected to reach 80-85% by the end of FY25. The goal is to offer consumers significant savings, with discounts of 20-30% compared to other brands. This growth strategy is part of their plan to make Star Bazaar a key player in the retail sector, alongside Zudio and Westside.
Neville Tata, who is the son of Trent chairman Noel Tata, is eager to take advantage of the growing organized grocery market in India. This market is worth about USD 30 billion, and it offers a huge opportunity for growth. And, by offering affordable products and expanding their private labels, Star Bazaar aims to attract more customers and strengthen its position in the retail market.
According to Arvind Singhal, chairman of Technopak, the organized grocery retail market in India currently accounts for only 5% of the overall grocery retail market, which is estimated to be around USD 600 billion. This suggests that the organized grocery retail market in India has a significant runway for growth.
Star Bazaar will use a clustered approach, similar to DMart. They will open stores close to each other, focusing on states like Maharashtra, Karnataka, and Telangana. This strategy will help create local scale, reduce costs, and maintain a concentrated store presence. The focus will be on sharp pricing, fresh produce, and private-label products.
In the recent June quarter results, Trent reported that the revenue share from its private labels had risen to 72%, up from around 63% the previous year. Experts expect this figure could reach 80-85% by the end of FY25. Trent Hypermarket experienced a 21% year-on-year revenue increase, reaching INR 2,210.53 crore in FY24. The joint venture reduced its net loss to INR 0.67 crore in FY24, compared to a loss of INR 102.86 crore in FY23, according to Trent's FY24 annual report.
The company has covered these losses primarily through the liquidation of financial assets and equity issuance, as noted by sector analysts. Trent also runs Star Bazaar stores and Zudio outlets through Fiora Hypermarket, which saw a 2.71% year-on-year revenue increase to INR 192.33 crore in FY24. Fiora Hypermarket reported a net profit of INR 12.47 crore for FY24, a significant turnaround from a net loss of INR 11.98 crore in FY23.
In conclusion, Trent's Star Bazaar is emerging as a key growth driver, focusing on expanding its store network, emphasizing affordability, and aggressively promoting private labels. The strategy involves a clustered approach to drive local scale and profitability. With the organized grocery retail market in India offering significant growth potential, Star Bazaar, under Neville Tata's leadership, aims to become a major player in the Indian retail landscape.
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