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PepsiCo bottler Jaipuria may exit loss-making grocery retail business
Photo Credit: Reuters

RJ Corp., promoted by PepsiCo’s bottling partner and serial entrepreneur Ravi Jaipuria, is looking to exit its grocery retail business three years after entering it, The Economic Times reported.

As part of the exit, close to 100 loss-making J-Mart stores spearheaded by Jaipuria’s daughter Devyani will be shut.

“We are exiting the J-Mart stores venture as the business model wasn’t working for us,” said Jaipuria in the report, adding, “The J-Mart venture was too small, and we may consider re-entering grocery retail in the future. There are no immediate plans.”

The J-Mart chain operated under special purpose vehicle Alisha Retail, which generally opened 300-500 square foot outlets. Despite Jaipuria’s PepsiCo bottling supply chain and manufacturing capabilities of various products, including juices, chips, ice-creams and breads, the chain could not withstand fierce competition from larger players including the Future Group’s More outlets, Reliance Fresh stores, Spencer’s Retail, and new online grocery firms such as BigBasket.com and Grofers.com, as well as local general stores.

Alisha Retail’s revenue stood at Rs 6.7 crore for 2015-16, Rs 39.5 crore for 2016-17, and Rs 73 crore for 2017-18. The company doubled its losses from Rs 22.4 crore for 2016-17 to Rs 42.6 crore for 2017-18, according to VCCEdge (www.VCCEdge.com), which is News Corp VCCircle’s research platform.

Last month, RJ Corp.’s NSE-listed flagship entity Varun Beverages had acquired PepsiCo’s bottling, sales and distribution franchisee rights in west and south India for Rs 1,850 crore, involving the transfer of 1,900 employees.

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