French retailer Auchan plans to open 60 stores

AFP/New Delhi

French retailer Auchan, one of the world’s biggest hypermarket chains, aims to set up 60 stores in India to tap the emerging market nation’s growing retail potential, a minister said.

Last year, the Congress-led government relaxed legislation to allow foreign retailers such as US supermarket giant WalMart set up shop in India and sell directly to consumers to boost investment from abroad.

Trade Minister Anand Sharma said: “(Officials of) the Auchan group met us on Tuesday... they want to open 60 stores in India.”

It was not immediately known whether Auchan planned to establish franchise operations or set up their own direct retail outlets. It already has 13 hypermarkets in India under a franchise deal with Max Hypermarket India.

Sharma added that global firms like Britain’s Tesco supermarket chain have filed applications to establish sourcing bases in India and the government had received “a letter” from French retail heavyweight Carrefour. However, he did not elaborate.

There was no comment available from Auchan.

On Tuesday, Auchan group global chairman, Vlanney Mulliez, said after meeting Sharma that he was “very enthusiastic about the Indian market”.

He added the group was still studying the new retail rules introduced by the government last September that allows 51% foreign direct investment in multi-brand retail.

The rules also stipulate that foreign retailers planning to enter the multi-brand sector would have to invest a minimum of $100mn, with 50% of it in backend infrastructure such as supply chains.

Last August Auchan and Max Hypermarket India signed a franchise agreement for development of the hypermarket business in India and said they planned to open 12-15 new stores in a year across India.

Swedish retailer Ikea is awaiting final government clearance to enter India and invest $1.9bn in coming years. It hopes to open 25 of its trademark blue-and-yellow stores in India as part of a wider emerging markets push.

Ikea’s entry into India is being closely watched by rivals as a test case for how a large foreign corporation navigates India’s byzantine rules and red tape.

US supermarket chain Walmart has also announced plans to open its stores in India. But the company is now being probed by Indian authorities over whether it broke the law through its US lobbying activities on matters the retailer said were related to “enhanced market access for investment in India”.