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Morning Stores: Going Steady

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Right in the centre of the trendy Greater Kailash Part-I (GK-I) market of Delhi stands the iconic Morning Stores, one of the most well-known progressive grocers of the national capital. The 4,000 sq ft store spans two floors of a building with a simple, unassuming façade. The tony neighbourhood ensures a steady supply of high-profile, discerning and loyal clients, which Morning Stores has built over the years. There are customers who have been shopping at the outlet for decades! The most famous one of these is the (President’s House) which has been a regular customer since 1970. It calls up the store every few days to requisition supplies for state banquets and to meet the day-to-day needs of the presidential household.

Behind the running of Morning Stores is its soft-spoken director, the 38-year-old Agosh Malik, who belongs to the third generation of the Malik family that established the store over 25 years ago. For him, the store is a passion, not a mere business, because of the family heritage, and he is totally focussed on meeting the needs of his customers.

“We mostly cater to the rich and upper middle-class customers because of our location in the middle of South Delhi’s premier residential areas. They only want high-end stuff and will never lay their hands on anything else, so we have to be very careful in sourcing products,” says Malik, whose store is open seven days a week.

The largest-selling items at the Morning Stores include vegetables, food products such as eggs and breads, and other items of day-to-day needs. “We try to introduce fresh items every month so that customers keep getting something new every time. We also stock products keeping in mind festivals such as Holi, Lohri and Diwali,” Malik adds.

The journey of Modern Stores has very humble beginnings – as a Plain Jane vegetable shop. Malik’s grandfather Khemchand Malik started the store way back in 1965 to sell vegetables in what was then a deserted market place. “It is hard to believe now, but during that time, the entire GK-I market was unoccupied. There were only three shops: a sweet shop, a meat shop and our vegetable shop. Property developer DLF built the GK market in 1962 and we moved in three years later,” says Malik. His grandfather used to cycle all the way to the Azadpur Mandi – the biggest fruit and vegetables market in Asia – to bring vegetables to the shop every day, while his two sons used to man the store. Business was not very good as there were hardly any houses in the vicinity. To increase revenue, products like cold drinks were gradually added to the Morning Stores’ offerings. After some years, the sons, including Agosh Malik’s father Nand Kishore Malik, took charge of the business.

The main boost to Morning Stores came during the infamous Emergency period (June 1975 to March 1977). “As soon as the curfew ended in the evenings, people would rush out from their homes to stock up on supplies for their kitchens. We were not expecting such huge sales all of a sudden. But despite the short supply of many items, we never sold them above the MRP, even though people were willing to pay more during those hard times,” reminisces Malik. “My grandfather used to man the main cash counter, while my father and uncle would sit beside him selling vegetables. Things were pretty unorganised at the time.”

During those years long gone by, most people in the residential areas around Greater Kailash still used to do their regular grocery shopping at Old Delhi. But as the long distance began to pinch, they began to demand more products from Morning Stores. The Maliks responded by increasing their offerings beyond just vegetables. “Then we seriously thought of turning ourselves into a modern store,” says Malik.

In 1982, Morning Stores became self-service – the first store in Delhi to do so. This was a radical concept at that time which was based on trusting the customer not to shoplift when the store-keeper was not looking. Almost overnight, the store morphed from a local kirana shop into a self-service department store with trolleys and baskets. However, managing the 1,500 SKUs that the Morning Stores stocked during that time posed a problem. There were no POS systems used in the country. The only system available was a Bradma electronic cash register by the which could store details of a maximum of 100 SKUs. Morning Stores was among the early pioneers in India to import machines from Singapore which were PC-based and could tackle thousands of SKUs.

A few years after taking on the reins of the store, in 1994, Malik introduced computerised billing, bar coding, inventory control – the whole shebang.

Morning Stores has evolved over the years. It currently has three outlets: the flagship at GK, another in Vasant Kunj (400 sq ft, opened in 1992) and the third at Jasola (900 sq ft; opened in 2007) – all in the national capital. While the first two are on high street, the last one is inside a mall. The store maintains different pricing at the outlets, depending on the customer profile.

A major thrust at Morning Stores is private labels, which are being driven by the need to increase margins in a highly competitive environment. Says Malik: “We have a problem with big national brands in terms of margins. They do not give retailers like us good margins compared to what they give to national retail chains. The retail chains buy from them in huge volumes, so the national brands prefer them to us.” The solution: increase the focus on private labels for better margins.

“Private labels are beneficial only when they give us better margins. On our range, we ensure 20-25 percent margins. Though there is additional cost incurred involving packaging and labour, our own products are much more profitable to us than the national brands. However, selling private labels is a challenge as you have to convince customers to buy them, create awareness, and assure them of quality,” adds Malik.

In fact, Morning Stores has its own quality control system in place for their private labels. One packet out of every 100 goes for sampling and testing, and only after that are the products placed on store shelves.

The private labels of Morning Stores are backed by a warehouse where products like pulses, spices and flour are processed, packaged and supplied to all the three outlets. The back-end operations are fully computerised. Fill rates (minimum order levels) are taken care of by a customised software, which generates a list that suppliers can view to see which product categories need replenishment.

Malik is quite serious about ensuring satisfaction of customers and retaining their loyalty. The entire store is air-conditioned. He is personally available to attend to customers. Morning Stores does home delivery for customers, but only in select locations and for large orders. It also does not offer products on credit except to big corporate clients.

Products past the expiry date are returned to their respective companies.

Though he would like to expand into new product categories, there are certain limitations like space availability and lack of funds. “We can only expand once we are doing good business with our existing stores and have consolidated,” Malik adds.

One of the major problems many retailers today face in India is the refusal of the next generation to take over the family business, preferring instead modern careers such as engineering and management. Says Malik, “Whether my children would like to join this business is up to them. I took my call in 1990, and I would like them to take theirs when the time comes. With technology, managing a store is getting simpler. Times are changing. Things are getting into auto-pilot mode. Morning Stores will continue to run whether the next generation joins it or not.”