Prices of real estate have doubled in the past three years and are uniformly overpriced across the country.

The Future Group has 66 hypermarkets up and running. The K Raheja group promoted Shopper’s Stop has rolled out just one hypermarket so far as the Tata-owned Trent.

If retailers are not able to manage and keep pace with their rollout targets, the culprit is real estate.

A big box hypermarket requires 39 different licenses before it can trade, excluding the licenses that the developer requires before he hands over the property.

Rollouts are gaining speed. It’s mainly for the big box format, which occupies over one lakh square feet, that space is an issue; the smaller stores are being opened at a far more rapid pace. Reliance Retail has managed to open close to 300 small stores in less than a year. Subhiksha today has 900 stores where it had just 120 in March 2006. And others are moving in. Future Group has a blueprint to open 1,000 Fair Price stores in the next 18 months.

Retailers, however, also need to able to generate high throughput given the kind of rentals they’re paying.

Retailers are rushing ahead with their plans. With over 130 to 180 million sq ft of new mall space coming up in the next few years, and much of it in the big cities, the catchments for each mall will reduce. And that could completely alter the competitive dynamics.
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