N Supermarket is an established regional retailer in Karnataka and Tamil Nadu, well known for its medium-sized neighborhood food and grocery stores that specialize in providing fresh and quality products at a reasonable price. With total retail operations spanning 20,000 sq.ft., N Supermarket has developed a strong private label in staples, bakery, confectionery and dairy products, which together contribute up to 15 percent of its overall sales. The retailer is looking to expand its footprint and has chosen the franchise route for expansion.
“Should we find interested partners who agree with our line of thinking, we might go for a rapid roll-out and appoint Master Franchisees for powering the future growth in newer locations,” says C. Gopalakrishnan, Managing Director.
Let us have a brief overview of your store chain, the eventful milestones in its development and a sketch of its growth and evolution over the years.
When I failed to convince my family members to part with the 104-year-old Nilgiri’s store business, I decided to start on my own again. I made a new beginning by establishing a new brand ‘N Dairy Farm’. The idea behind the venture was to set up a manufacturing unit for bakery, confectionery, staples and snacks in my village, which could also provide employment opportunities to the villagers. Though training the village folk was costly, it was worth the money. After establishing the production centre and contributing to the economic growth of the village, we then went about concentrating on creating the front-end. It led to the birth of our retail format N Supermarket.
Over the years, the growth of N Supermarket has been slow but sure. Today, there are seven N Supermarkets in operation – all in Bangalore and Tamil Nadu. We are in the process of adding two new stores by September 2018 and a few more by the year end.
Our family tradition has always been to serve quality products at a reasonable price, which is the foundation for any business to gain its reputation. The business ethos at N Supermarket is ‘Our quality blends with tradition’ and it is a credo that we are proud of carrying forward.
If you were to recall one of the most memorable and cherished moment in the past year’s annals of your retail business, what would that be?
I had started the franchise division of Nilgiris Group beginning with the first franchise – Nilgiris supermarket – at Jayanagar in Bangalore. Reminiscing about our initial investments, and to restore the legacy which I started, last year I was able to purchase the store back and change the same to N Supermarket. It was a satisfying moment for me to get the store back in our fold.
What is the range of products at your store and which of these are the fastest moving? What kind of people frequent your stores and in which age group?
N Supermarket stocks and sells 22 categories of products and 75 percent of these are food related. Apart from the FMCG group products, our private label bakery, confectionery, staples and dairy products are always in good demand. People who are looking for convenience, courteous service, and availability of quality and freshness of product at a reasonable price frequent our outlet. Typically, the customer base comprises middle and middle-top income groups who are quality conscious.
What is the price range for products at your stores? Which price band is the most popular with customers?
The price range extends from Rs 5 to Rs 1,000. The Rs 50-200 price band is most popular with our customers.
What is the location strategy for your stores? Which locations do you prefer and what part do they play in your store sales?
The establishment must be in a commercial/ semi-commercial location with a floating population and it should be close to a residential area. Apart from quality products, service, location and parking area play a very vital role in the success of a store. We ensure that all our stores are equipped with these customer-friendly attributes. We go for standalone stores in residential and semi-commercial areas with a good floating population.
What is the marketing positioning of your outlets?
N Supermarkets are food specialty stores known for fresh products’ availability and with a strong private label department that offers quality products in staples and bakery.
What is your marketing strategy and what steps have you taken to promote your stores?
The best marketing approach for a food retailing outlet is to provide quality products at a reasonable price and the customers are the best promoters of your store. We mainly focus on word-of-mouth advertising.
Tell us about your private label products, which are the categories with your private labels, how much do they contribute to your sales and your strategy for expanding them.
We have private labels in staples, bakery, confectionery and dairy products. Together, they contribute up to 15 percent of outlet sales. Over time, we will keep adding newer products in the private label category, which is our strategy.
How do you ensure that suppliers stick to quality standards and efficiency norms?
While strict quality control systems are in place at the receiving section, we review and cross-check periodically so that the systems are being followed in accordance with new concepts adopted by the manufactures/ distributors. It is advisable to have more than one vendor for any product. Our current supplier base is mainly from South India – Chennai, Bangalore, Coimbatore, Mumbai and some from North India.
Are there any interesting concepts or innovations you have introduced at your stores? Please give details.
We are going to introduce creative planogramming and redesign the fresh produce section in our new stores for the convenience of our customers. These measures will also help in loss prevention.
What customer service initiatives have you put in place in your stores?
Apart from courteous service of the staff at the supermarket, we also offer home delivery service. We are in the process of setting up an online channel as well. Besides that, we are putting in place a system of rewarding our frequent customers with the privilege of ‘self-checkout’.
What steps have you taken to strengthen your supply chain?
My father, M. Chenniappan, started the Nilgiris (Dairy division) in the year 1964 at Vandipalayam in Erode. After the sale of our family business (Nilgiris), the new owner dismantled the infrastructure and village folk who supplied milk had to fi nd alternative customers and a few started dairy businesses on their own. Having been loyal to our family, they always wanted to continue the relationship and now I have been able to source some of the dairy products again from them.
How would you describe your strengths and achievements?
We have successfully launched quality N brand products in the bakery, confectionery, chocolates and private label items, and our quality staples and spices, which are cleaned and graded, are doing extremely well in the market. We have also been successful in getting good franchisees at ideal locations which will further enhance our business journey. The consumer acceptance of our products is extremely high. So much so that customers have asked us to supply to the canteens of educational institutions where their children are studying. The appreciation of quality by customers is our greatest strength. Small bakeries are also picking up our products for their private labeling.
Please share some key learnings that you have gleaned over the years in this business?
As the saying goes: “You can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time”. This applies to customers, employees and business partners. It is difficult to find people who are passionate in their chosen fi elds of work. Th e best policy is to know your employees, have regular interactions with them, acknowledge their skills, and guide them towards continuous selfimprovement. We provide proper training for our staff and encourage product knowledge.
What is your roadmap for the future and how do you look at the future potential of your store format?
We want to be a neighborhood food specialty store serving quality products and offering the best service to our customers. Sticking to this proposition will ensure that the potential of this format will keep growing in the future.