Max Hypermarkets will introduce 30 Spar hypermarkets in India after the retailer signed a partnership agreement with the Netherlands-based retailer.
The move follows the breakdown of Max’s business relationship with France’s Groupe Auchan due to difficulties in complying with India’s foreign investment rules. The Indian retailer and Spar are already well acquainted, having been partners before, although they decided to part ways in 2012.
The new sites are expected to be operational by 2019, with 13 of the former Max-Auchan stores converted to the Spar brand over the coming months, and a further 20 new outlets opening nationwide by 2019. The partnership expects to see annual retail sales in excess of €300m (US$402m) within five years, Spar said in a statement.
Announcing the new partnership, Dr Gordon Campbell, managing director of Spar International said Spar’s business model suited India’s retail market.
"The efforts of Max Hypermarkets have enabled us to develop a strong customer franchise, and as a result, the Spar brand is well known and respected by consumers in India.
“Our previous presence in the market provides a strong foundation to grow the brand in the years ahead and we look forward to working closely with Max Hypermarkets to bring quality fresh foods, low price and a convenient shopping environment to consumers in India.”
Viney Singh, of Max Hypermarkets, added that Spar’s retail experience would provide a fillip for modern retail in India while allowing his company to survey further growth.
"This new arrangement will ensure that the stores are operated to the highest international standards of quality and food safety and provide customers with an enhanced shopping experience. We look forward to working with Spar to rapidly expand the chain and increase our footprint nationwide.”
Spar International is the world's biggest food store retailer with over 12,000 outlets across the world, with global retail sales of €32.2bn (US$43.1bn) in 2013. Max Hypermarket, part of the Dubai-based Landmark Group, was incorporated in 2004 and operates hypermarkets with an average floorspace of 50,000sq-ft.
Max said earlier this week that its partnership with Groupe Auchan could not comply with Indian foreign direct investment regulations for supermarkets and hypermarkets as these required some of its existing stores to be excluded from the joint-venture. This outcome was “despite the best efforts” of both companies to find a solution, Max said. The earlier partnership had planned the opening of 80 stores.