The market is left with only one retailer in the organized general space and that is PRIL.

So finally the big company has confirmed:

Reliance to shut 25 stores, but no layoffs

Layoff has already been done. Now formally they are closing the shops.

Subhiksha now, will Reliance Fresh be next?

Development without vision is India’s forte and Subhiksha, once India's biggest discount retailer, was no different.

Subhiksha never thought their own employees would attack the stores over the payment fiasco. This socio-economic scenario in retail sector is not because of the global credit crisis. But it is because India’s retailing had little vision and hence it had to make a slow and steady exit from the business.

R. Subramaniam, founder and managing director of Subhiksha group once said his aim is to be India’s Walmart. It just turned out to be a wall on the mart. India's Retailers Association cut the sector's growth outlook from 30-35 per cent to 15-20 per cent – an indicator of where the business is headed to.

Now the question is whether Reliance be next in the line? For years all its formats are in pilot mode. It seems to be actually in an auto-pilot mode. In response to a story in Commodity Online (Why all Reliance companies doom?), Rick Boozell, who worked as a Retail Consultant, hired to help establish retail operation from inception, wrote that after he had the insiders look at Reliance, the company organization itself is the failure.

“When the Store Operations vertical is not at the center of a retail company, the venture is doomed. For two years, I tried to convey this, but the other "Powerful" vertical heads -EPC, D&L, HR, FMCG, Marketing, Reliance One, etc,. all dictated to the store operations team,” he further added.

The Store Operations vertical needs to care directly for the customer, listen to their daily needs and requests, and develop the personal relationships required for long-term business. This never existed due to the organizational structure of the company.

He further added. “I have never seen such a dysfunctional company structure, and at least 75% of all resources expended were battling internally, versus trying to take care of the customer. The truth is, retailing is a simple business, and India is aware of this, Reliance wanted to make it a grand business venture, where all the retail leaders sit in nice offices, looking at reports - while rarely even entering a store. Reliance really never did enter into the retailing business - at least not a retailing business that the rest of the world would recognize as a modern retailer.”

But Reliance originally had good ideas. It just turned out that the company didn’t get good people to implement these ideas. This is endorsed by even Boozell. “It is unfortunate, as this could have been a great value for the Indian people. There are a few great Reliance leaders who could change this, but their words fall on deaf ears too.”

Now comes the correction. Reliance is looking for alliances as its model of running the Reliance Fresh or all its pilot projects have run into rough weather.

Reliance can afford to float itself a little more as the government has announced FDI norms recently in the retail sector. Being part of a larger conglomerate, Reliance Fresh may not be facing the tough times that Subhiksha is facing. There could also be no debt repayment or salary withdrawal symptoms as well.

But retail experts are of the opinion that if the business model is not in tune with the consumer demand and expectations, it is destined to doom. Subhiksha has faced this problem and is in doldrums. Will Reliance Fresh be next?

SOURCE :COMMODITYONLINE

Basically at the end of this retail wash we will have lesser stores with more unemployed guys!