Star Bazaar, the hypermarket offer from Tataís is looking to expand with a smaller, 30,000 sq. ft. offer instead of the 60,000 sq. ft. + stores that it manages presently. Research by the company has shown that Indians shop in a very narrow band, which means that the retailer does not need to have 50,000 products in store Ė they can manage as well with fewer products. The smaller stores are also expected to increase profitability for the loss making business. As per last yearís annual reports, the hypermarket division recorded a 21 % growth in total revenues at Rs 785 crore but declared an operating loss of Rs 64 crore. This inspite of the fact that about 30 % of the sales come from higher margin in-house brands.
Additionally Star Bazaar is increasing its focus on fresh food. By offering goods at 10-15% less than the market the retailers hopes to become a destination for food and grocery shopping with an offer that includes fresh produce, pre-cut fruits and vegetables, non-vegetarian and dairy products at the current 15 stores.
As of now, Star Bazaar is concentrating only on Mumbai, Pune, Chennai and Bangalore, and has no plans of opening stores in the North or the Eastern markets.
Earlier this year Hypercity also announced the launch of a 30,000 sq. ft. format hyper market in Bangalore. The reduction in size was made possible by removing the consumer durables category.