Progressive Grocer spoke to K. Vijaya Kumar, Owner, Ponnu Super Market, about the evolution of his brand from a small provisions store to the instantly-recognized supermarket brand with eight stores in Chennai that pull in a turnover of over Rs 150 crore annually.
Tell us about your store’s retail journey so far and your brand’s positioning.
Ponnu Super Market started off as a traditional provision store in the city of Madras in 1967. It became a supermarket in the year 1995. In 2015, we opened a 40,000 sq.ft. hypermarket at Avadi in Chennai. Ours is a family ownership enterprise and currently we operate one hypermarket and seven supermarkets in Chennai. Today, the Ponnu Super Market brand enjoys a distinct market positioning and we are the leading super market local chain in Chennai. All our stores are strategically located across popular high-streets in the city and are known for their quality products, competitive prices and superlative customer service.
What is the customer profile at your stores?
Our stores cater to all customer segments but mostly the shopper profile comprises people from the middle-class and the higher income segments. Our stores have earned a reputation as an ideal shopping destination for families and the largest demographic at our stores comprise shoppers that are thirty years and above.
What is it about your stores that customers most identify with?
As a local supermarket brand, we probably have the largest base of loyal customers with us in Chennai. Customers at our stores appreciate the high standards of customer service that we offer, including free home delivery. We are known for our proactive approach to understanding and meeting the needs and requirements of our customers and quickly acting on customer feedback and take immediate corrective measures if required. Thanks to our promptitude on the customer service front, we have been able to retain and grow our customer base year on year.
Which are the most popular and best-selling food and grocery brands at your stores?
In grocery, our best performing brands are HUL and P&G. Hamam soap, Surf Excel, Rin powder are our best-selling HUL products. Brands belonging to P&G such as Tide, Ariel and Pampers are among the most sold products at our stores. In food, Nestle is the top brand with its Maggi noodles and sauces and Milk Maid brands. Other brands such as Fair & Lovely and Olay in the facial cream category are also big sales drivers.
Some of our best sellers are fancy items such toys, gift articles and household items. In the new and emerging categories, organic products are showing great promise and market potential.
What is the sales split for your brands?
Roughly speaking, among the top brands, HUL leads with a 60 percent share; P&G contributes 30 percent and Nestle’s sales contribution is 10 percent.
What is the kind of investment that you make in your stores? Also, give us an idea of the ROI and how long it takes to break even?
Typically, I would put the investment figure as Rs 3,000 per sq.ft. The ROI is 10 percent to 15 percent and it takes about six months before the returns show up.
Do you undertake any kind of advertising – ATL or BTL activities – for your stores?
Ponnu Super Market is a well-known and established brand in Chennai and we don’t feel the need for advertising our brand. People trust us for maintaining aggressive and effective price points across different product categories.
What is your strategy for roping in quality suppliers for different product categories?
We keep a sharp eye on market trends and accordingly evaluate our requirements for new suppliers from time to time. We are also sourcing quality and competitive priced products from other Asian countries and are constantly looking out to add new and innovative products for our customers. On average, our supplier base keeps growing 5 percent to 10 percent annually.
Tell us about your private labels and your strategy for this category of products.
We have private labels in staples and we have a centralized packing unit for our own store Ponnu brand. Thanks to the quality and cost-effective pricing of our private label products, the category has been growing 5 percent to 10 percent annually and contributes about 25 percent to our overall sales. Going forward, we are looking to introduce our own spice powders.
What have been your learnings in grocery retailing over the years?
It is very important to maintain the quality of products and make them available at competitive price points. Keeping service standards high and offering your customers a wide choice across product ranges is equally important.