To combat Walmart and Amazon, Future Group all set to ramp up its food supply chain

Future Group is further developing its food and grocery supply chain, as this segment is set to be a battleground for global retailers, with Walmart buying Flipkart and Amazon eyeing stakes in grocery retailers. Currently, Big Bazaar hypermarkets follows a hybrid supply chain model where stores are mostly supplied food and FMCG products directly by companies such as Hindustan Unilever and Colgate Palmolive, with some amount of supplies happening through the company’s distribution centres.

Now the group is all set to invest Rs 500-800 crore in the next four years to create a nationwide food supply chain network of refrigerated trucks and temperature controlled distribution centres (DCs) to eventually manage the entire supply through this network.

Future Group is trying to change it by supplying its entire food and FMCG from distribution centres — to be located within a range of about 200 km of each of its retail outlets. The DCs will be backed by technology that will give real-time inventory levels in stores to help them replenish stocks at frequent intervals.

This is a model that is widely followed by Walmarts of the world. This will save costs for the company and free up around 1,000 sq.ft. — used to stock a significant amount of supplies — in each Big Bazaar outlet, because this ‘back office’ would no longer be required with DCs in close proximity tracking their inventory levels.

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