Spar (trademarked as SPAR) is the world's largest food retailer, with approximately 14000

stores in 35 countries worldwide.Spar originated in the Netherlands in 1932 by legendary retailer

Mr Adrial Van Well and now, through its affiliate organisations, operates through most
European countries, Nigeria, South Africa, Asia, Greenland and Australia.[1] It operates on a
principle similar to retailers' co-operatives elsewhere, with owners grouping together to get bulk
discounts from suppliers/wholesalers.[1] It has its headquarters in Amsterdam.[2]

After a phase of consolidation, billionaire Micky Jagtiani-owned Max Hypermarkets, which

operates Spar-branded superstores, plans to expand its presence to new geographies and open 25
hypermarkets by 2012. This will result in a 10-fold increase in the company’s retail space, from
120,000 sq ft currently to 1.2 million sq ft.

Managing director Viney Singh said the company is expecting revenues to rise proportionately,
from Rs 150 crore currently, to Rs 1,250 crore by 2012. The company, currently, operates three
large-format stores, two in Bangalore and one in Hyderabad, and is set to open its flagship
property, a 90,000 sq ft store, in Bangalore next week.

Micky Jagtiani, who controls the Landmark Group, one of West Asia’s largest retail chains,
owns fashion retail chain LifeStyle and Max Hypermarkets in India. Max is the licencee for the
Spar franchise in India. A Dutch brand, Spar International, is one of the world’s largest retailer
of food, with presence in over 33 countries.

“We will now open 6-7 stores each year through 2012. These are all large-format stores with an
average size of 50,000 sq ft,” Mr Singh said.
India’s organised retail industry has been treading cautiously after many players had to shelve
aggressive expansion plans as poor consumer sentiment slowed sales through 2008 and 2009. At
least one player “Subhiksha” went bankrupt while another “Vishal Retail” is going through a
corporate debt restructuring process.

Resurgent sales in the first months of 2010 have inspired greater confidence among large
retailers such as Reliance Retail, Future Group and Spencer Retail, which have variously forged
joint ventures, rejigged top management and undertaken other initiatives in a sign that the $37-
billion industry might be gradually gaining momentum once again.

Max’s Singh said the company is investing Rs 400 crore, of which, about Rs 250 crore will be
equity and the rest debt, to fund the expansion. Max Hypermarkets will open 6-7 stores each year
till 2012. While most of the stores will be in tier-2 cities in south India, such as Mangalore,
Mysore, Vishakhapatnam, Vijayawada, and Coimbatore, the company will also be opening large
stores in cities such as Mumbai, Pune, Chennai and New Delhi.

In many new malls opening in these cities, Max has signed on as an anchor client. “Being a
hypermarket, we are naturally an anchor client for malls,” Mr Singh said, adding that his
company works on a revenue sharing basis with mall owners. “It varies obviously, but on an
average, the cost of occupancy works out to be 3-4% of revenues,” Mr Singh said. Rent and
salaries are typically the largest cost overheads for retail operations.