Reliance Retail still losing Money

Reliance Retail has over 900 stores across various formats. The number of stores increased from 590 in FY08 to 900 in FY09 and during the same quarter losses mounted from Rs 0.5 bn to Rs 4.5 bn. The losses have increased manifold even as revenue nearly doubled suggesting that many of its stores are yet to break even. Reliance Retail, Reliance Fresh and Reliance Hypermart are the key retail subsidiaries of RIL. Total space under retailing at the end of FY09 stood at 4.5 mn sft.

Reliance Retail recorded a turnover of 41,441 mn – 97% higher on a YoY basis and a loss of 4,511 mn for FY09. Operating leverage can magnify losses if store level performance remains subdued. It is not just Reliance which is in Red, but Aditya Birla’s Retail Venture, Spencers, Vishal are also in Red and this is how they stack up against each other.