Saturday, February 10, 2007

Future Group to focus on lifestyle and non-food/grocery segments

The Future Group announced that it will be focusing more on the high-margin lifestyle segment, in an effort to improve profit margins. The food and grocery segment contributes to 60% of the total business while lifestyle retail contributes for 40% of their business. What this actually means is that the company is trying to stay clear of Reliance Retail’s plans for food and grocery retailing, which entail opening stores in 784 cities.

Food and grocery segment margins are usually around only 12-15%, while lifestyle segment margins are much more lucrative at 45-50%. Kishore Biyani, CEO and MD of the Future Group, said, “We are looking at business margins at the end of the day. We have to be in grocery retail which is a significant part of consumer spends, but the business will be clearly coming in from lifestyle retail. Food and groceries get the footfalls.”

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