Why Big Bazaar Sold to Reliance? What happened to big bazaar? Why Big Bazaar failed?
These are few questions what people are asking and want to know why it happened with the leading retailer of India? When the Big bazaar problems started? They want to know Big Bazaar crisis in a simple words. The acquisition of Big Bazaar by Reliance Retail Ltd and opening of Reliance Smart Bazaar‘s store in the location of Big Bazaar is a secondary thing. The legal fight between Amazon and the Future group is well covered in media. We are not going to talk about the same here again and again. Here we are going to share our opinion why the Big Bazaar failed?
Its not only the Big Bazaar its a whole group Future group collapsed. If you want to know what all formats were there in Future group you can check the wikipedia. Even the most profitable vertical of the group FBB also failed.
What happened to Big Bazaar?
Big Bazaar was in debt and could not afford to pay off loans to lenders well in time. The condition was not good sincein 2017. In 2019 most of the store were closed due to Pandemic and sale was dropped, which further worsen the condition of the Big Bazaar in totality the condition of Future group. As the sales revenue and cash flow was at bottom the cost of operation was rising and accumulation of overhead expenditure was at peak. Due to which the condition of the organisation become worst. Big Bazaar crisis started way back in 2017 but due to unavoidable situation of Pandemic, lockdown took it to bottom.
What happened to Big Bazaar Cash flow?
In year 2019-20 due to pandemic, cash flow was at bottom level, its just not enough to meet the expenses. The accumulation of expenses and interest on company’s head make the financial position worst. The reserve cash ratio was also down thus company was not able to sustain itself.
Why Big Bazaar failed?
The question is being a leading retailer of the country and with so many business vertical why the Future group failed? Why Big Bazaar failed? Was Big Bazaar not in a profit?
When any retailer sales the mix product assortment like food, grocery, fashion, home merchandice the gross margin is always better. It may be possible that all the Big Bazaar store may not be in profit. But there seems to be several other reasons which seems to be responsible for the failure of Big Bazaar. These is just an unbiased opinion base on the media news and blogs.
Reason for Big Bazaar Failure.
- Uncontrolled expnasion of the formats, heavy investment on the formats like Easy day, heritage etc.
- Marketing cost was high, do you remmber IPL, Femina Miss India, all such activity cost a lot.
- Big Bazaar, Easy Day, FBB all formats were spending to much in customer loyalty program.
- Big Bazaar customer loyalty program like Big Bazaar Profit club card, Future pay cash back were the big investment. None other than Future Group spend so much on customer loyalty program.
- And the experiments with own brands or provate label was also not successful.
All the above mentioned points were the few of the reasons for the failure of Big Bazaar in India. On top of these the evolution of D mart in the market pull it further down.
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