Sandeep Agarwal has been hands-on at Telangana-based Ratnadeep Supermarkets since 1991, when he first came on board at the chain’s then only store in Hyderabad.
In the 24 years since that first day, Agarwal has had a journey into retail that has been exciting, challenging, humbling and rewarding by turns, as he himself says.
“I started out at Ratnadeep while I was still in college. I was a complete novice at every aspect of professional life, let alone at retail as a business,” Agarwal reminisces. “The fact that I learnt everything on the job, made mistakes and learnt the corrective actions on the way, is that drives my emotional ‘ownership’ of this business.”
And he’s come a long way from those early, chaotic days. Established in 1987, Ratnadeep Supermarket currently has 23 outlets across Hyderabad and Secunderabad, occupying a total retail space of 1,06,593 square feet, and registered a total turnover of Rs 329.43 crores in Financial Year 2014-15.
The business’s biggest game-changing moment happened in 1996-97, Agarwal says. “These were the early days of modern supermarket formats in India. We were quite content until then, but around this time, we noticed the completely new supermarket formats. We visited Chennai to check out the RPG (early-day Spencer’s and FoodWorld) formats and that literally changed our outlook and understanding of retail,” he explains.
[One unusual — but functional — feature of the chain is that it operates 28,000-plus SKUs in its stores without the support of an ERP platform, something that Agarwal confirms is a deliberate strategy.]
The eye-opening observations led to Ratnadeep’s transformation into a modern-day food, grocery and FMCG retailer with the merchandise mix, navigation and customer experience befitting an ‘organised’ retailer, Agarwal discloses.
One unusual — but functional — feature of the chain is that it operates 28,000-plus SKUs in its stores without the support of an ERP platform, something that Agarwal confirms is a deliberate strategy. “Our supply chain effectiveness is very high; this gives us high fill rates and ensures product freshness. Company-owned trucks maintain the route delivery matrix to all our store locations like clockwork,” he adds.
So he’s successfully expanded into a highly competitive supermarket landscape, but does he have any regrets? “Well, I think we began expanding very late; until 2008 we had only two stores. Perhaps the business wisdom of expanding did not occur to us until then. Perhaps we should have begun expanding the chain well before that, considering we had been around for 17 years at that point in time.”
In the seven years since expansion began in earnest, Ratnadeep has seemingly made up for that lost time. Going forward, Agarwal is exploring the Bangalore territory for expansion, though will not commit to a timeline just yet, primarily because the chain is first scrutinising the real estate rental dynamics.
And the online battlefield? What does he have to say about that? “Look, FMCG, food are thin-margin businesses,” he responds. “The logistics/ delivery costs of low-margin goods are not sustainable, in my opinion; even a two-rupee-margin product will entail a delivery cost. There are several guys now in the online grocery model; I want to watch them for a while and see how it pans out. Who knows, we just might enter this new field some day too!”