Tata’s department store chain Westside is venturing into a new territory. The 13-year old chain, known for its private labels in fashion, has added a gourmet and chocolate section in its flagship store in Mumbai.
Though hypermarkets run by Tata’s Star Bazaar and Birla Retail’s ‘more’ have gourmet sections, department store chains have largely kept out of gourmet retailing due to challenges such as supply chain and logistics and handling of perishable items in the segment. Godrej’s Nature’s Basket is the major player in gourmet retail.
For instance, after experimenting with food business, Raheja-owned Shopper’s Stop announced that its Café Brio outlets would be replaced with Café Coffee Day. Its another brand, Fresh Basket became a private label of its subsidiary firm Hypercity Retail.
“It is not easy to run gourmet stores. Managing products such as fruits and vegetables, fish and meat takes a lot of energy and investment,” says a chief executive of the Mumbai-based retail chain.
But Westside is confident. “It’s a big step forward for us. Though food is a lower margin and therefore tough business, we want consumers to enjoy an experience and want more consumers to come to our stores,” says Gaurav Mahajan, chief operating officer, Westside.
Arvind Singhal, chairman of retail consultancy Technopak Advisors, says it is an encouraging sign that Westside is reinventing itself, though they could have done it earlier.
After the pilot in Mumbai, Westside plans to take Gourmet West and CocoaWest to other stores in the country. Gourmet West stocks Chef Moshes’s signature breads, dips and sauces and imported sauces, confectionary among others. It also allows consumers to make their own cereal mix.
Trent, the listed retail arm of Tatas, runs 53 Westside stores in the country and wants to hit 100 store mark in four years.
“It is a good experiment. Though they are a conventional department format, they are evolving with gourmet and fine dining,” says Thomas Varghese, chief executive of Aditya Birla Retail which runs stores under ‘more’ brand.
Though some analysts say Westside lacked product innovations like other chains in department store segment, Mahajan does not agree.
“We are the leading brand and we believe in staying ahead of customer expectations,” he says. Westside’s action in the last couple of years reflects that.
Apart from tying up with renowned designers such as Narendra Kumar, Priyadarshini Rao, Krishna Mehta for designer pret, Westside has also tied up with exclusively with international brands such as Italian kids wear brand Chicco, Woolworths Bath and Body, GIVe from UK and Aerology-a brand from US.
However, Mahajan does not agree that Westside is not shifting from its private label-led model. Nearly, 90 per cent of its merchandise comes from its own brands such as menswear brand Ascot, young fashion brand Nuon, sportswear Westsport, plus size brand Gia among others.
Gross margins in the private labels in apparel are over 40 per cent and have played a significant role in retaining profitability of the chain over the years when many other retail chains are struggling.
“The private label-led model has worked for us for years. We will continue with that. But we are also bringing external brands on exclusive basis,” Mahajan says.
Apart from adding gourmet and bringing more brands, Westside has also roped in international design firm Fitch to design its new stores and redesign some of the existing stores.
Mahajan also does not rule out tying up with Tata group’s electronic and durable chain Croma or Tata International, which runs the Tashi brand of footwear stores in its stores as shop-in-shop. It has already tied up with Titan to have World of Titan stores in its Kalaghoda store.
Source : Business Standard