India Inc. at Digital Inspiration

Reliance to use petrol pump space as highway malls

Posted: 12 May 2008 03:13 AM CDT

After taking a beating in its front-end petroleum retail venture, Reliance Industries is planning to convert the closed outlets into malls and multiplexes.

Of the 1432 outlets closed, 500 are company owned and rest dealer-owned. Reliance plans to develop around 300 dealer owned properties along with its own ones which are situated at strategic locations.

The properties would be developed through Reliance Industrial Infrastructure with an investment of Rs.5,000 crore and includes buying out of some properties owned by the dealers.

The malls would house all the Reliance Retail brands along with its hypermarket formats Reliance Mart and Reliance Super. The multiplexes may be a JV with Manmohan Shetty and Yash Raj Films.

The idea may work out well for the affected dealers and the company too as it will give them a justifiable exit option for their loss making investment.

However, the success of the project may be doubted, as Indian consumers are still not averse to the idea of going out shopping outside the city limits as there are constraints of transport, cost and safety.

Such type of concepts of highway malls is popular in western countries where people go on weekends to shop. But, in Indian context, it would be a while before the concept catches up and it is to be noted that most of the Reliance pumps were situated on highways. source

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