The theme – Cross-country Retail: What Local and Pan-India Supermarkets Can Pick Up from Each Other – hit a red hot seam of divergent lessons in innovative retailing, which could well act as a trusted guidebook that all supermarkets can well hitch their business bandwagon to power assured growth
Mumbai: The conclusive session on Day 1 of India Food Forum produced another humdinger that will loiter in the memory of the participants and delegates attending the panel discussion. The theme – Cross-country Retail: What Local and Pan-India Supermarkets Can Pick Up from Each Other – hit a red hot seam of divergent lessons in innovative retailing, which could well act as a trusted guidebook that all supermarkets can well hitch their business bandwagon to power assured growth.
The agenda’s theme and the associated keywords “Local” and “Pan-India Supermarkets” might deceptively lull into believing that it could all be about the “David versus Goliath” optics. But as the discussion unraveled, it proved to be all about how even the big national retailers, firm in the belief of their own strengths, can over become wedded to stale nostrums and grow too complacent in even willing to think outside the box. On the other hand, smaller retailers can prove themselves to be plucky winners in the battle for the consumer’s “share of stomach and her pocket book”.
In fact, today there are several stand-alone and regional grocers who have been able to evolve their own successful formats and business models and are engaged in diligently catering to their customers’ aspirations and need-states. Many of these smaller stars are not only giving a run for the money to their bigger national counterparts but have also stepped up to the plate in a fashion that is now becoming a familiar retail theme – a new guard rising to take an old guard’s place.
While the bigger retailers might have more resources and clout at their fingertips in terms of business scale and purchasing power, it doesn’t necessarily give them all the right keys to retailing knowledge and customer acceptance. On the other hand, local retailers are successfully running their operations and business by acting on their own judgment born of years of local experience and customer knowledge, understanding, and emotional connect. “For customers, there are other things more important than the pricing alone. For her, how the service and customer relationship is managed by the retailer also figure high among the priorities,” observed Uday Varma, Director Products, Trent Hypermarket, which runs about 70 Star Bazaar outlets, mostly in west and south India.
“We are a regional supermarket chain in Odisha with 5 stores in our portfolio. Our stores in Bhubaneswar and Cuttack are competing with national supermarket heavyweights like D-Mart, Reliance Retail, Spencer’s, among others. But what we are trying to do differently from them is to focus obsessively on our customers, which has led us to come up with different customer and market strategies that help us to meet and exceed their expectations. The flow of customer traffic is like water and they will go wherever they feel it is more convenient and advantageous for them to go. So, whether you are a kirana store, a regional or even a national supermarket, it doesn’t really matter for the customer,” opined Iffat Jahan, Executive Director, Metto Supermarket.
Also, with incomes flowing from the larger metros to the smaller towns and cities of Bharat, a large pie of the business for even the national retailers is now being generated from small-town Bharat, which is why they are making a beeline to grow their footprints in Bharat. However, what is sauce for the gander may not be the same for the goose, and national retailers will need to come up with a different set of coefficients for building durable growth in small-town India and it will have to be a very different recipe from the one they have cooked up for the metros,” noted Uday Varma.
One such name among the local retailers creating their own retailing canon is the Gujarat-based supermarket chain Hearty Mart. Like all supermarket chains, Hearty Mart’s success also lies in its ability to source products at low costs and pass on the cost advantage to its customers. But while most multi-locational chain of stores, either owned by an individual, corporate or a venture capitalist, have centralized purchase and inventory decisions, Hearty Mart chain of franchise stores make the inventory decisions in a truly decentralized manner according to the needs of the specific store and the locality and, hence, the store inventory differs from store to store.
Managing the product inventory of stores is a critical element contributing to the success of Hearty Mart’s franchisee model. Inventory Management makes Hearty Mart stores different from other grocery chains in that it works more on area-specific inventory taking a completely customer-centric approach, which is based on the consumer and trade research of the proposed area of operation.
“The needs for products change every few kilometers in our country of diverse consumption tastes and culture. We conduct consumer survey of the buying patterns, particularly of fast-moving consumer products and food groceries, of people residing in different locations and take observational tours of competing stores located there to check the products/brands available with them before we invest in the inventory, which helps us in coming up with the right product inventory mix for the residents of the locality,” says Founder Nadeem Jafri.
At Hearty Mart stores, the most popular food categories include loose lentils and rice, of which we offer a great range and variety for our customers to choose. However, people prefer packaged spices and flavorings like coriander, cumin, and chili powder, of which we stock products belonging to national and regional brands like Everest, Badshah, MDH, and Ramdev. In the villages where most of our stores are located, we stock the more localized brands in the same product line, but with an economical pricing.
With the changing demographics and consumer psychographics, Oil giant BPCL that ventured into non-fuel retailing some three decades ago, has now decided to change tack. While its earlier focus on non-fuel retailing (food & grocery) was toward the metropolitan cities of India, it has taken a conscious decision to reorient its grocery retailing in favour of the smaller towns and cities. “Last year, we created a new vertical for this business under the brand name In & Out, which will focus on retail expansion at the sub-district and taluka level, as our projections show that the bigger chunk of our growth will come from these places,” pointed out Major Shankar Karajagi, Head Sales Retail & Industry Gas, Bharat Petroleum Corporation.
“India being a diverse country, food habits and tastes are uniquely varied in different parts of the country. People in India are not ‘can openers’ who prefer canned and packaged food as their first choice…they want food that is aligned with their culture and taste and retailers who can understand these wide and eclectic choices of their customers will be able to exploit and cash in on their unique choices profitably,” said Chetan Damji Sangoi, Founder, Sarvodaya Supermarket and one who has carved an industry-wide reputation for training many supermarket promoters in the country.
Among the other speakers who weighed in with their advice, opinion and suggestions at the panel discussion were Anil Agarwal, MD, Ghanshyam Supermarkets; Girish Relwani, Kishore Shopping Malls, Chattisgarh; and many more. The eventual boildown of the discussion was that there is a tremendous runway for growth and expansion for both local, regional and national retailers when it comes to growing their storefronts in the cities and towns of Bharat. But all retailers, irrespective of their geographic stripes will have to step up to a new level of consumer perception and understanding to ensure a boffo performance and crack the code of success.