as they were not profitable and were located in more expensive locations, thereby increasing rental costs. At present, the company has a total of 175 Fairprice stores.
According to Fairprice CEO K Radhakrishnan, “The company is now repositioning itself for the lower-middle class segment. We are not keen on serving the same customer who also goes to a supermarket or a hypermarket. We want to go one level lower to the lower-lower middle class.”
“We are making some changes in our new stores that will have a self-service option, with better visual appeal and systematic stacking of products,” he said.
Apart from these two food and grocery formats, the company is also revamping the HomeTown format by streamlining its supply chain management and exiting categories like heavy furnishing. “The format will be in a position to be profitable at the Ebitda level next year," according to Future Group president (retail strategy) Rajan Malhotra. This comes after FRL managed to turnaround its eZone format last year that turned Ebitda positive in the April-June 2013 quarter.
The rejig in the formats follow a big-bang round of restructuring where Biyani sold Pantaloons to Aditya Birla Nuvo in 2012, divested a 53% stake in consumer finance company Future Capital Holdings and signed term sheets to exit both the insurance businesses of Future Generali India Life Insurance and Future Generali India General Insurance.