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From reinforcing the back-end, introducing new formats, expanding the product portfolio, innovative marketing, store makeovers, and technology upgradation, to maximising shopper experience with customer-friendly planogramming, high fill rate and high merchandising mix, night time replenishment to prevent stock-out, product sampling, thematic festivals, interactive sessions and workshops, and customer feedback system, successful retailers are doing it all.|

Winds of change

Food and grocery in India is still the bastion of traditional shop owners and kiranas. Organised F&G share accounts for only 3 percent of entire organised retail trade, which was pegged at $37 billion in 2013. However, the winds of modernisation sweeping across the Indian retail market have taken food and grocery segment in its fold. The change is reflected in a spurt of domestic and multinational grocery chains affirming their presence. Acknowledging that future of retail is the modern way; many more traditional retailers are migrating from traditional to modern formats. The F&G sector has vast scope for growth and modernisation but throws up specific challenges for organised players. While mom and pop stores continue to give fierce competition to hyper-/supermarkets and other format grocery stores, they also face a bizarre demand paradox, which is, although shoppers demand quality, variety and comfort, they remain value conscious. The current economic slump and mounting rivalry has also compelled oganised players to devise their own gameplans to push sales and increase profits.

What’s driving success?

F&G is a capital intensive, tight margin business. As such, obtaining economies of scale is daunting. The current economic downturn and resultant curtailed consumer spending have also put added pressures on profit margins. Hence, to boost sales, organised players are employing varied tactics like improving supply, introducing new formats, expanding their product portfolio, undertaking store makeovers, enhancing customer experience, using innovative marketing, employing trained manpower, and upgrading operational efficiencies with technology.  Prominent retailers Auchan, HyperCity, Spencer’s, Ratnadeep, Haiko, Godrej Nature’s Basket,Twenty Four Seven, Future Group and Foodhall give  insights into their strategy for success through 2014 and beyond


French hypermarket chain Auchan forayed into India in 2012 via franchisng. It has partnered with Bangalore-based Max Hypermarkets India Pvt Ltd, a subsidiary of Landmark Group. Covering a total of 6,01,459  sqft of retail space, the chain has 14 stores in key cities like Bangalore, Chennai, Hyderabad, Pune, NCR, Vijayawada, etc. Last year, its key focus areas have been sourcing and suppliers, customer engagement, employee relations, technology application, etc. Auchan came up with various initiatives to address these areas because they are vital to its growth. Viney Singh, Managing Director, Max Hypermarkets states that by the end of December 2013, Auchan’s annual turnover had reached over Rs 65,760 lakh.

As regards supply, Singh informs, “We have strived to develop relations with NGOs, small and large farmers. Our tie up with Technoserve for F&V supply facilitates direct linkages between local farmers and modern trade. We have introduced polyhouse fruits and veggies which are of superior quality at a lower price, as well as organics from TVS, a Chennai-based organic F&V supplier, to diversify into new markets. Moreover, we have introduced best price range at Auchan stores by buying ‘off-specs’ produce at a fair price helping farmers improve their profits.”

Retail ERP system was introduced at Auchan stores in 2013. Singh quips, “The project went live in just 9 months. It is the first instance of end to end roll out of Oracle Retail ERP in Indian hypermarket space, and also the fastest implementation as per Oracle retail industry standards for hypermarket business.” According to him, the fully automated ERP mechanism will improve supply chain, supplier collaborations and transportation. Additionally, it will reduce labour costs, support multichannel selling, bring in billing efficiency, and maximise shopping experience. Moreover, the retailer is soon coming up with Wi-Fi enabled electronic feedback options by touchscreen or tablet to address customer grievances in real time.

The company has taken several employee-centric steps as in setting up cross functional training for shared leadership, SHE (Safety, Health & Enviornment), internal complaints committee, prevention of sexual harassment policy, internal opportunities via internal job posting (IJP) process and launch of employee referral scheme, etc. The company has launched its own intranet with all people and IT policies connecting employees across all 14 store locations.

“In 2013, our marketing programmes were focused on driving category leadership. They were designed to establish Auchan as a destination of customer preference. Customer engagement programmes like Smile to school, Annual, Kitchen Mela, and Everyone’s a Winner, were executed. Extensive use of social media saw our fan base on Auchan’s official Facebook page reach 80 thousand and more,” apprises Singh. He also shares that a robust customer feedback system with multiple channels like telephone, email, website, feedback form, dedicated customer service desks at all stores, store escalation matrix and standard operating procedure have ensured enhanced customer experience at Auchan stores.


Foodhall by Future Group is a premium lifestyle food store format launched in Mumbai in 2011. Catering to urban Indian consumers having exposure to global food traditions, it operates 6 stores across Mumbai, Bengaluru, New Delhi, Pune and Gurgaon. The chain is eyeing revenue of Rs 125 crore to Rs 200 crore for the fiscal year 2015.

Foodhall outlets offer an assortment of Indian and international foods from fresh produce, dairy and packaged foods, poultry, frozen foods and delis categories. They have 6,000-7,000 SKUs, and majority of their stock is imported. Offering a complete food experience to customers, the stores also deal in kitchen tools and accessories showcasing more than 300 unique gadgets and products, for instance, KitchenAid food processor, asparagus cookers, herb choppers, Dim-Sum Baskets, Pizza Stones, etc.

The retailer carefully handpicks its vendors and partners. It has recently collaborated with ASA, Copenhagen’s spice specialists and launched Spice Station, which offers a selection of 150 rare and exotic spices and herbs sourced from across the globe. Additionally, it has rolled out concepts like ‘boutique olive oil bar’ by Leonardo, the leading brand of olive oil in India, the Kunafa counter that serves a variety of over 10 different types of Middle Eastern desserts.

The retailer has introduced several innovative concepts such as open kitchen, live bakery, Sushi bar and fruit bay at its outlets. Apart from unique displays and engaging ambience, the stores strive to drive in more footfalls by way of sampling activities, monthly thematic festivals, interactive sessions and workshops for visitors. The company actively utilises social media to reach out to its target customers.

To complement its brick and mortar stores, Foodhall is planning to soon open its online store as well.

Future Group

Kishore Biyani-led, Mumbai-based Future Group’s food and grocery business spans multiple retail formats such as hypermarkets, supermarkets, neighbhourhood stores, etc. Presently, the retailer has pan India footprints in over 95 cities through 163 Big Bazaar stores, 186 Food Bazaar outlets, and other formats like KB’s FairPrice, Big Apple, Adhaar, and the newest specialty format store Foodhall.

Devendra Chawla, CEO at Food Bazaar, Future Group, comments, “Everyone consumes the concept of retail in their own way. At Future Group, each format has been created to cater to a different and specific target audience. From the common value-based or hypermarket format to the niche premium format, kirana look-alike and rural retailing, we wish to cater to customers in the wider spectrum.” To spearhead the growth and expansion of F&G business, Future Group is focussing on products and category expansions, private label development, new formats, and smaller markets.

Private brands at Future Group are developed by its subsidiary Future Consumer Enterprise Ltd (FCEL), which is an integrated Food & FMCG company whose activities span sourcing, processing, and distribution in rural and urban India. FCEL has introduced Fresh & Pure, Tasty Treat, Sach, Ektaa, Cleanmate, Caremate brands to the group’s food and FMCG private labels portfolio. These brands include FMCG, food, home and personal care categories, and are offered in all the company’s stores.

The group is constantly expanding its brand portfolio either by entering newer categories or by increasing play in current categories. As regards Food Bazaar, Chawla says, “At Food Bazaar, we are building many New Age categories like pastes, purees, and mashed potatoes. We are also focussing on building ‘Global Community Food’ in India, so, products like Thai curry pastes and sushi making mats find placement at our stores.” He also shares that the company is planning to launch healthy cookies under own brand Tasty Treat, which currently is into sipping and munching categories. Consumers like to indulge and still be health conscious, so, health cookies made of ragi, oats and multigrains will cater to this need gap in the segment, he notes. Moreover, the company may also introduce sugar-free cookies in the future.

In recent years, the group has introduced newer retail formats such as gourmet chain Foodhall. While, it is not taking its eyes off the metros and large cities, it is also increasingly tapping tier 2 and 3 markets.  According to Chawla, “The idea is to woo consumers in an environment they are most comfortable with, and at the same time provide them an upgraded in-store experience.” Modern retail in India is growing rapidly, he says, adding that there is a huge opportunity, particularly in small cities and towns. Lately, Big Bazaar has expanded into Chhatisgarh, Mandya, Hosur, Gulbarga, Agartala, Tripura and Kochi.  A second Foodhall has also come up in Delhi. To support its entire retail business expansion, the group has adopted a new mega communication campaign that is currently being aired on TV.

Godrej Nature’s Basket

Headquartered in Mumbai, Godrej Nature’s Basket (GNB), a premium gourmet food concept store by Godrej Group, began its journey in 2005. The chain currently has 32 stores in key cities of Mumbai, Pune, Delhi/NCR, Bangalore and Hyderabad. During 2013, the chain registered same store growth of 25 percent and its annual turnover was Rs 18,573 lakh. GNB’s Managing Director Mohit Khattar states, “We, at Nature’s Basket offer a unique and differentiated product portfolio and keep consumers at the centre of our merchandising philosophy. This has helped us to sustain and thrive in the difficult retail environment and as well carve out a leadership position in the food and grocery retail space.” In recent times, to boost business, the company has particularly concentrated on areas such as sourcing and supply, technology adaption, product range, customer-focused service, etc.

Targeting to have at least 10 percent of sales through new products (NPD) every year, Natures Basket has fine tuned its product selection approach to make it consumer centric. During course of 2013, more than 5000 new SKU were introduced.  It also forayed into private label products across various categories including grocery, seeds, snacks, jam, preserves, mayonnaise, jujubes etc. The chain also specialises in creating serving and gifting options for consumers like Cheese and Meat platters for parties to gifting options for personal needs.

Nature’s Basket has sourcing arrangements with importers  as well as local suppliers of high quality specialty foods. In 2013, it forged strategic sourcing tie ups with consolidators in USA, UK and assorted brands across the globe. Kattar informs, “F&V sourced from Europe and East Asian markets are available across all cities where Nature’s Basket operates. These products are doing quite well in terms of sales.” It also has alliances with several international trade bodies to promote specific cuisines and foods.

Nature’s Basket offers e-commerce across stores locations. “We are one of the first few brick and mortar food retailers who are active in the e-commerce space as well,” says Khattar.  GNB has revamped its website for ease of access using the best of technologies. The company is effectively using technology for routine store operations such as SAP-enabled back-end, SAP & POS integration for seamless data exchange, touch technology enable billing and cashiering, integrated EDC system for Credit and Debit cards swiping, etc.

In addition to mass media, consumer engagement activities such as in-store sampling and cookery demonstration are centre of GNB’s brand promotion strategy. For instance, bakery classes, wine and tea appreciation sessions, cuisine festivals, etc are regularly held. As per Khattar the rationale is to help consumers make the journey from being aware to becoming brand loyalists. While website carries engaging content like recipes and ingredient information, the company is quite active on social media. At store front-end, emphasis is on maximising customer service, convenience and satisfaction across all touch points.  For this, employee soft skills and product training are conducted on regular basis.


Operational since 2000, Haiko Supermarket is one of the first upscale supermarkets in Mumbai. Situated in Powai, the 8,000 sqft store has 25,000 SKUs listed, out of which 18,000 are active. With y-o-y sales growth of over 20 percent, the food category contributes more than 85 percent to its sales. In a bid to continue with the growth momentum, Haiko recently renovated its store, and is focusing on strengthening back-end infrastructure, bringing in new products, and enhancing customer relations.

Haiko has undergone a complete makeover. The renovated store sports increased illumination for a brighter look, customised units from Kider India, aligned and modified fixtures based on category planning, new cash tills, etc. It has upgraded its Dairy section by installing latest chillers and freezers, and has set up combi freezers and a cold room for the frozen category.

Haiko’s imported products sales constitute almost 29 percent of total food category sales. After renovation, the entire planogram and merchandising mix has been revised to cater specifically to the customer profile with emphasis on fruits and vegetables, frozen, wines, and cosmetics sections. The company has also expanded its product categories, especially the premium merchandise. Specialised category of cold cuts and bulk cheese blocks has been rolled out in its Shop-in-Shop (SIS) format.

The retailer has tied up with bigger B2B operators to maintain required stock levels on peak days especially on Sunday evenings. It has expanded its back-end space, which now stands at almost 8,000 sqft. It has also started nighttime replenishment to avoid stock out during sales hours. To bypass huge investment in warehouse management technology, Haiko has developed standard operating procedures (SOPs) and systems to ensure high availability of products, and to curtail loss of sales due to stock out.

The company has specifically focused on corporate clients to promote Diwali sales in 2013. As regards its marketing targeted at individual customers, Haiko has  a Power Products concept wherein 200 products are taken as the ‘offer of the month’ and a gift voucher scheme providing as high as 40 percent discount on purchases. Initiatives like trained service staff and brand promoters, home delivery and weekend concept of Chef in Store to assist customers on product selection are all directed towards offering superior shopping experience. Moreover, programmes such as sampling activity, chef demos and workshops are also held to engage more and more customers. Past year, the company sent special Diwali gifts to its regular customers and held health camps for senior citizens to enhance customer out reach.


A part of K. Raheja Corp. Group, HyperCity Retail (India) has a pan India presence with 15 hypermarkets in Mumbai, Bangalore, Pune, Ahmedabad, Amritsar, Jaipur, etc. Covering over  12.16 lakh sqft area, they house products in diverse categories sourced from local and global markets, and offer value added services like ATM, pharmacy, bakery and delis.  The chain is set to expand its presence in Noida in 2014-15.

Mark Ashman, CEO, HyperCity, states, “Our stores are modern and exciting. At HyperCITY, we are passionate about what we offer and what customers want. We focus on providing quality assortment of products at great value coupled with excellent customer service.” Lately, the chain has expanded its product offerings, private label portfolio, and implemented supply chain technology.

HyperCity stores offer more than 44,000 products. As regards F&G category, the retailer has added several new products to its kitty in 2013. These include premium cookies packaged in tins, specialty sauces and spreads, breakfast items like cornflakes and orange marmalade. Noodles, salt, premium wheat atta and ghee have also been added to fill consumer’s monthly consumption basket. Ashman informs, “To meet our consumers’ growing expectations, apart from introducing several new products in the food segment, we have also expanded our private label portfolio by launching Terzo range of utensil cleaners.”

At HyperCity stores, a single distribution center (DC) manages 10,000 food and grocery SKUs that contribute to 50 percent of total F&G turnover across the store chain. The retailer has indigenous category management with zero expiries. A scanner-based supply mechanism ensures quick turnaround time and a high fill rate, and quarterly PICS (Perpetual Inventory Count System) for 100 percent inventory accuracy. Import consignments managed via DC are stored in temperature controlled areas for select products and imported foods. There is a wholly automated Food Repack unit for its private label staples.

The retailer has developed a scanner-based solution bouquet to help OPS/DC (Operations/Distribution Centre) team to perform day to day tasks, for example, receiving goods, transfers, inventory checks, price checks, and other related on-floor activities. Technology has helped in considerably reducing the turnaround time of vendor vehicles with 95 percent TAT; and improving availability of products at stores with 98 percent fill rates. HyperCity has also implemented E3 software for maintaining private label availability and increase sales.

HyperCity stores get more than 11 lakh footfalls every month. Its service standards ensure that customers are served adequately at every touchpoint. It also engages customers via loyalty scheme. “Our loyalty programme Discovery Club currently has a  base of over 8 lakh members. Under the programme, we give customised innovative offers to every member as per their shopping behaviour, informs Ashman. Offers are also communicated to club members via direct marketing such as the company’s official website, call centre, e-mails, SMSes, and social media. The IT-backed system facilitates customisation of offers as per a particular store, brand, category, specific set of members, etc. Besides this, the retailer runs a month-long ‘Shopping Bhi Rewarding Bhi’ campaign targeted at loyal members.


Founded in 1987, Hyderabad-based Ratnadeep Supermarket (P) Ltd today has 19 stores in twin cities of Hyderabad and Secunderabad. It has a total retail space of 88,950 sqft along with 50,000 sqft warehouse. In 2013, the chain’s annual turnover reached more than Rs 235.76 crore .  It is mulling expansion now.

Ratnadeep’s Managing Director Sandeep Agarwal believes that high merchandising mix and exceptional in-store experience are its key differentiators. He says, “Our stores are known for quality, assortment and service. In recent times, some of our oldest stores have been renovated to enhance their look and appeal. A few months back, we launched a unique customer loyalty programme across all our stores.”

Besides FMCG and general merchandise, Ratnadeep stores stock F&V, grocery and imported foods. It also has own brand Excella for cereals, food grains and dry fruits. Vis a vis other same formats and even some bigger stores, the breadth and depth of the products (merchandising mix) at Ratnadeep stores is higher. It has over 28,000 active SKUs that are efficiently managed without ERP technology support.  Depending on store area and location, SKUs vary from 8,500 to 28000. “We have store-wise assortment with unique customer-friendly planogramming. Hence, customer can easily navigate to identify and pick their requirements,” Agarwal informs.

Ratnadeep has been around for over 15 years now, so, the company decided to renovate some of its stores. Agarwal discloses, “During 2012 end, the chain’s flagship store at Vikrampuri was the first to be refurbished. In February 2013, its Srinagar colony outlet was  remodeled.” He claims that renovation has improved the overall ambience and enhanced customer delight, leading to increased sales.

The chain has worked on achieving supply chain effectiveness. Its warehousing facility is fitted with automated filling and process equipment. Company-owned trucks maintain the route delivery matrix to store locations. As such, materials received in the morning at the warehouse can be found in the store the same day. High fill rates ensure shelf availability of products, required stock levels, and product freshness at all times.

To enhance ease of shopping, the company has added bill counters for faster customer movement and disposal. It also offers home delivery. Banking on its loyal customer base, the company has stuck to its policy of minimal promotions. As per Agarwal, Ratnadeep has a high brand recall value amongst its regular clients. However, it is exploiting the social media as well to connect with its customers. In December 2013, the chain launched its unique customer loyalty programme called aGain for which registration can be done at the billing counter or online via Facebook. It entitles member customers to  exclusive aGain offers such as products at a special price and other offers. From 71,000 enrollments in December last, the company is targeting a membership of 3 lakh in the coming months.


RP-SG Group owned Spencer’s Retail Ltd operates 128 outlets comprising convenience stores, called Spencer’s and hypermarkets called Spencer’s hyper in 40 cities across India. It has also introduced a new format called Compact Hypers. As suggested by name, these are compact in size and design. Under the new format, the stores have opened in Dhanbad, Raipur, Bhopal, Aligarh, and Kadapa, taking the count of hypers to 35 in total. As of now, the chain is expanding in the hypermarket segment in select geographies only. During 2013, it has worked towards perking up supply side, widening product range, technology upgradation, back-end efficiency, and growing its customer base.

Apart from extending product range, assortment and quality, Spencer’s has widely expanded the gourmet food range in its hypermarkets, especially in metros. It has rolled out an innovative, experiential food retailing concept called Epicuisine in select hypers. These specially designed ‘hubs’ offer quick and healthy ‘on the go’ meal solutions to shoppers. Also, it has introduced a specialised new section called ‘Nutty Delights’ with over 100 varieties of nuts and dry fruits and spices that provides a ‘touch and feel’ experience to shoppers.

The company has introduced the concept of ‘implants’ for its FMCG and Staple suppliers, wherein a dedicated resource has been allocated for Spencer’s who drive the fill rate and increase availability of products. It has also identified and addressed key issues in fill rate loss and enhanced awareness of supplier key performance indicator ( KPIs) through regular master data corrections and assortment rationalisation.

The company’s customer engagement tactics included year around festival centric/thematic activities and offers; launch of Spencer’s Gift Card in July 2013 with phase-wise national roll-out of the programme; usage of social media such as Facebook and Twitter, SMS and E-mail intimations; rebranding of feedback programme called ‘Your Views Matter’. It also introduced analytics driven special offers for ‘Smart Reward’ (loyalty programme) members. Such efforts helped in increasing customer touch-points, better communication and improved shopper engagement.

Introduction of tablets in hypermarket stores to track and monitor product display is aimed at increasing operational discipline and enabling real-time visibility of products. Furthermore, real time customer feedback and grievance resolution application and 3-tier escalation mechanism are driving the organisation to become more customer-centric.

Twenty Four Seven

A part of Delhi-based Modi Enterprises, Twenty Four Seven (TFS) is India’s first and only round-the-clock convenience store chain. Incepted in 2004, it has 38 outlets across Delhi and in key cities of Uttar Pradesh and Haryana. This includes non fuel retailing (NFR) stores under a joint venture with Indian Oil Cooperation (IOC) for north India at IOC petrol pumps. Now, it is eyeing a mega pan India expansion over the next five years.

Comments, Samir Modi, President, Twenty Four Seven, “We want TFS to be the preferred choice of modern and busy consumers seeking round-the-clock convenience of shopping in a conducive and friendly environment. Primarily targeted at 18 to 35 year olds, our stores also cater to dual income families and busy professionals.”

The chain’s annual turnover was Rs 105 crore in 2013. Products, supply chain, technology and marketing have been its key focus areas in the past year.

TFS stores offer a wide range of products and services that include food and non-food categories, fresh food, groceries, vegetables, RTE (ready to eat) meals, frozen food, beverages, imported products, OTC pharmaceuticals, personal care products, travel accessories, toys, music, movies, magazines, and more. Modi shares, “In groceries alone, we stock over 3,200 products in 14 different categories including the international range.” The stores offer multiple services such as courier, drop boxes for cheque payments, etc. They also have automated self service kiosks for mobile and DTH recharge, utility bills payment, movie tickets, and travel booking.

TFS’s employee management system runs on PeopleSoft enterprise resource planning (ERP) software. In December 2013, SAP ERP technology for store operations was introduced. The retailer also focusses on improving customer service at the front-end. It has set up a training programme to enhance customer service and customer interaction. For new recruits, it has a dedicated training centre attached to an active TFS store for hands-on training. Staff also attend grooming and etiquette sessions.

Twenty Four Seven’s entire supply chain operations (logistics included) are managed by third party logistics (3PL) service provider. In 2013, it has managed to keep both pilferage rate and damage expiry rate at less than 0.3 percent, thus achieving greater supply chain efficiency.

“Our stores with their modern look and ambience in terms of design, shopfitouts and equipment, offer an international shopping experience. Each of our outlets gets almost 2,000 daily footfalls,” says Modi, and reveals that during 2013, TFS registered same store growth of 18 percent. The retailer relies mainly on print media but also uses  direct marketing tools like pamphlets, emailers, SMSes and social media. As regards in-store marketing, it undertakes varied activities such as introducing new products every month, festival-based promotions, annual event called Happy 24Seven Day, and distribution of promotional material to engage more and more customers.

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