With about 30 years in the food and grocery retail business, Hyderabad-based Ratnadeep Super Market has been able to carve a formidable reputation as a shopping destination that customers unfailingly identify with a rich and varied assortment of quality national and international products offered in a pleasant ambience and with customer friendly, reliable service.
Progressive Grocer spoke to Sandeep Agarwal, Managing Director, and Manish Bhartiya, Director, Ratnadeep Super Market Pvt. Ltd. about how the retail chain is looking to leverage its strengths for expanding its private label business, partnering with more brands in the food business and ramping up its footprint beyond Hyderabad to other regions in the country.
What do you consider the unique features of your store?
Sandeep Agarwal: Ratnadeep is unique and special in the supermarket store format. Our stores have the better advantage in terms of navigation of products, identification and user-friendly product planogramming. All our stores offer superlative customer convenience and a pleasant shopping experience. Also, we are known for the rich assortment/ choice of brands at our stores. The imported assortment/ SKUs/ merchandise are an added advantage with easy availability and proven authenticity of different brands compared with what is available in the general market and other stores. Our imported fruits/ vegetables and products in the regular segment come with the assurance of best quality, right quantity and price, which is our specialty. Our own staples and pulses are also known for better quality and reliability and are the best in the market.
What is the major customer and value proposition of your store brand?
Sandeep Agarwal: Our customer base is majorly SEC ‘A’ and ‘A+’ with a 100 per cent conversion rate of shopping at all our stores. Quick checkout, great ambience and a wide range of assortment are our stores’ unique value proposition. The multiple choices of brands at our stores, availability of a wide variety of assortment and the fact that we run regular promos offering prices that are comparable to the best in the market makes us stand apart from other retailers in the city. All our stores are centrally air conditioned with best tools for merchandise navigation and selection, uniform planogramming, and multiple billing points for faster check-out from the store. We are known for offering the best quality and reliable services in the industry since the past 30 years.
At your stores, which department/s in particular draws in the highest traffic and transactions? Overall, how much is its sales/ revenue contribution?
Manish Bhartiya: Our specialty – our own brand of grocery/ fruits and vegetables – and the imported FMCG brands are the top sellers. In terms of sales, grocery/ fruits and vegetables/ imported assortment contribute about 30 per cent plus of our overall revenue pie.
Have there been successful instances where you have partnered with brands and there was a favorable impact?
Sandeep Agarwal: In our stores, we strive to achieve a strong bonding with the locality catchment. Apart from relying on our own assortment, we regularly partner with popular FMCG companies and approach many locally known brands such as Agra Sweets, Almond House, and many more.
Which are your top-selling private labels? What are your plans to augment and expand your PLs?
Manish Bhartiya: We have our own ‘Excella’ brand of staples and pulses and our private labels in some other FMCG assortment. We have just stepped into our own labels in FMCG, starting with Soan Papdi, Besan laddu and some other products. We are in the process of introducing our store brands in some more food and FMCG categories, and will be entering the house cleaning segment shortly. The aim is to offer our store brands for catering to the customer’s day to day requirements with best quality and value of money products.
As of now, what is the contribution to your sales from your store brands?
Manish Bhartiya: Our own brand in grocery, farm to fork model of fresh produce (fruits and vegetable) contribute 30 per cent of our overall sales.
What is your strategy for merchandise display and inventory management?
Manish Bhartiya: Over a period of 30 years, Ratnadeep Super Market has grown from a small partnership firm to a multi store private limited company. All through, we have made conscious efforts to improve the quality standards by implementing quality checks at various levels of merchandising. Today, Ratnadeep is considered as the best destination for customer-friendly shopping in Hyderabad. In spite of a number of national and international companies setting up supermarkets and hypermarkets in the city, we have been able to increase our customer base at a steady pace thanks to our strength in assortment and the quality assurance of our products.
Ratnadeep stores run on a strong software platform, which allows us to efficiently manage the inventory/ pricing/ billing/ CRM and other operations. Store-wise assortment with unique customer friendly planogramming and navigation methodology are integral features across all our stores. From time to time, we carry out promo announcements and flyer displays to customers through web/ net/ other social media platforms. We are effectively employing FT/ NFT for administering of purchase, merchandise ordering and replenishment at warehouse/ stores. The MBQs are designed and deployed to avoid stock-outs and for running a better predictive ordering system. All of these systems allow us to take care of customer convenience and ensure higher shopping satisfaction across all our stores.
Have you taken any innovative steps to strengthen your supply chain?
Manish Bhartiya: Our supply chain effectiveness can be inferred from the fact that the products received at the warehouse in the morning can found in the stores on the same day. Maintaining this high efficiency gives our stores high fill rates and the guarantee of product freshness and their regular availability to the customer. Ours is a company-owned supply chain management, which is unique in the retail industry. The supply chain system is enabled with the daily inventory delivery matrix to the store locations.
What is the location strategy for your stores?
Manish Bhartiya: Our stores are located on high streets and main streets keeping in mind our focus on customer convenience. All our stores enjoy ample parking facilities with hassle-free customer passage into the store.
What is the investment needed for setting up a new store and how much time does it take for a store to break even?
Sandeep Agarwal: Generally speaking, each of our store costs about Rs. 1.5 crore and above to set up. The break-even period ranges between six and nine months or a year from the start of operations.
With your years of retailing experience, what do you feel are its most essential attributes for ensuring sales and profitability?
Sandeep Agarwal: First and foremost, you need to have a firm grip on the inventory control and focus on cost optimization without compromising on the standards of service to the customer and your back-end operations. The profitability is generally under pressure due to the escalated supply chain management costs/ inventory carrying costs/ pilferage and rentals/ manpower cost, etc…so these metrics need to be worked on meticulously and maintained at all times. In the end, you need to give your best on all fronts without compromising on the front-end so that customers go back with a pleasant shopping experience.
We comply with and follow all the statutory regulations/ compliances on all fronts, which is imperative to driving sustainability in operations and maintaining a conducive work environment at all levels. All of these factors are necessary to accomplishing business survival, and drive sustainable operations with reasonable profitability.
What have been your major learnings in this business?
Sandeep Agarwal: You get to learn something new every day. Your learning never stops so one should keep looking at ways to offer still higher levels of customer satisfaction through creative planogramming, customer-friendly navigation, better service standards, quality offerings, and in every other way.
How would you describe your achievements so far?
Sandeep Agarwal: Ratnadeep Super Market today operates 38 stores located in Hyderabad/ Secunderabad. The average daily bill per store is Rs. 790 + approximately and our total trading area spans over 2,25,000 sq. ft. All our processes and systems are authorized under ISO 9001-2008 and 22000- 2005 standards. We have been able to establish best practices in the organization and the work place system in accordance with the best ‘5S’ practices. We have also been awarded with a certificate of achievement by a global certifi cation body. Our financial standing is rated Crisil BBB+, which falls under ‘stable’ category. We have implemented CRM/ loyalty program points in our stores with unique customer telephone/ mobile number as identification. Our CRM loyalty program, known as ‘aGAIN’ has a million plus customer base and its membership is simple and hassle-free. The program comes loaded with various benefi ts like automatic purchase points’ accumulation, convenient redemption, announcements of schemes and offers from time to time, and other benefits.
Tell us about your plans for the future?
Sandeep Agarwal: We have a chalked out plans for continuous expansion of our stores, going forward. We have plans for launching, in different phases, different format stores like food and grocery stores with a Food Court and partnering with international, national, and premium local brands. We are working with a clear vision to be a National retail chain and a Rs 1,000 crore plus brand in food and grocery by 2020. It will make Ratnadeep the only regional retail chain in India to achieve this benchmark in such a short span. By next financial year, we are looking to expand our brand footprint in other zones of the country.