Moving away from their earlier model of expansion through company owned stores, Vishal Retail is now showing interest in using the franchisee route for its expansion. Out of the 178 stores at present, 165 are company owned. But the way forward for the company would be the FOFO (Franchisee Owned Franchisee Operated) option. Immediate future plans of the company also include bettering the consolidation of the restaurant and their organised food retailing business and also concentration on the expansion of private labels.
Sharing details on the consolidation of the restaurant and their food retail business, Ambeek Khemka, Group president, Vishal Retail, says, “With a view to providing holistic shopping experience within the Vishal Megamart premises; Vishal Megamart has launched its in-store restaurant chain called 3H (which stands for health, hunger and hygiene). For the moment, no new cities would be added; the 50 existing outlets which have these in-house restaurants would see further consolidation in terms of enhanced back end support and branding initiatives. In terms of investment for this consolidation, no additional investments would be needed except for few fixtures and a separate enclosure which is required for the restaurant.”
Meanwhile, the company is also planning to introduce the shop-in-shop concept at their existing retail outlets. Explains Khemka: “We are coming up with a new concept of shop-in-shop where we would provide brands with space in our outlets thus enabling them to enjoy the extensive network which we have across India and even share brand equity on mutually agreeable terms.”
Commenting on the expansion in the number of stores to be opened, Khemka shares, “Vishal Retail, presently with 178 outlets (with nearly 165 company owned outlets) is planning to go forward with more of FOFO outlets and by the end of this fiscal year is aiming to achieve a tally of 200 plus stores mainly in tier II and III cities. The additional new stores will all be on the FOFO model and will be focusing more on the North India belt followed by the Eastern India region and then subsequently the West.”
In sync with the trend being followed by majority of the retailers with regards to expansion of private labels, Vishal Retail too would be seen showing more concentration on expansion of their private labels and there could be a possibility of making these available at other local kirana stores as well. Sharing details about the expansion of private labels, Khemka says, “We generate 45 per cent of our total revenue from the apparel segment out of which 80 per cent is contributed by our private labels while FMCG segment contributes 13 per cent. We sell products 20 to 25 per cent cheaper than the market price. Currently we have around 20 labels under the Vishal in-house brand portfolio.”
Currently the group occupies a total retail space of 29, 26,069 square feet wherein the average size of the company owned store is anything between 10,000 – 15,000 square feet and the FOFO store would be anything between 3000-5000 square feet.
—Zainab Morbiwala, Mumbai Bureau