Convenience store retailing India

1. 22 • PROGRESSIVE GROCER • APRIL 2008 AHEAD OF WHAT’S NEXT WWW.PROGRESSIVEGROCER.COM
Independents Report
W
hen the modern Indian shopper swaggers his way to leisure, the traditional Indian
grocer stays embedded in his store trying to carry on the legacy of ‘progressivism’ at
his small end. Having started early, these traditional grocers are witnessing the evolu-
tion of modern retail in India, albeit at the cost of a few sacrifices. Yet, what deserves
credit is the grit and gumption with which they hope to pass the baton on to succeed-
ing generations, displaying self-abnegation, which perhaps has symbolised the essence of the spirit of the
whole nation since the outset.
PROGRESSIVE GROCER takes stock of some of the most popular traditional grocery stores across
Delhi, Mumbai, Bangalore and Kolkata which represent the knack of carrying on the ‘kirana’ tradition,
with emulative modernity.
Some are complacent, some are
worried. But the race is truly on.
Some are complacent some are
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2. WWW.PROGRESSIVEGROCER.COM AHEAD OF WHAT’S NEXT APRIL 2008 • PROGRESSIVE GROCER • 23
Lucky General Store, New
Delhi
Store size: 320 Square feet
Operating since: 1969
Mercahndise mix: Imported sauces,
vinegar, rice, olives, olive oils, meats,
sausages.
The much inured-looking K. L.
Sachdeva can be seen standing in the
middle of his compact grocery store
managing the daily business of his
shop, in a subdued state. Establishing
his shop in 1969, he vociferously claims
“its been forty years for me now”.
Named as ‘Lucky General Store’,
the grocery store is located almost in
the centre of the INA market, the
popular shopping haunt of foreign
tourists and diplomats in Delhi. The
store merchandises in grocery perhaps
everything under the sun and more.
The store is visually appealing with
shelves organised to accommodate
distant viewing and not only buying.
On offer are a wide range of branded
food products only. A plethora of im-
ported goods such as different variants
of spices, olive oil, olives, sweet corn,
baby corn, jellies, asparagus, red wine
vinegar, white wine vinegar, Aceto di
vino bianco, Japanese rice, frozen tur-
key, frozen sausages, frozen chicken
nuggets, smoke salmon, frozen prawn,
ham, salami, pepperoni, spring roll
sheets, cheese, Worcestershire sauce,
steak sauce, oyster sauce and others
are sold.
Ignorant of the modern retail ter-
minology, Sachdeva explains that his
CRM strategy is to serve the custom-
ers the way they want. His store pro-
vides for both, pick and pay, and ask
for. The provision for home delivery
is also there. The veteran expresses his
stand on modern retailing by saying,
“They (modern retail chains) provide
better services; the quality of products
must also be good.” He reflects con-
tentment with his position but states
that modern retailers have the power
to buy in bulk and sell at lower prices,
we buy in dozens so we cannot” he
states. However, he further contends
that “the modern retailers are not able
to earn their margins” and that he is
able to thrive still, earning profits from
his sales.
On being asked, he agrees that he
would like to get into organised retail-
ing if given the capital and resources.
He says that like other modern retail-
ers, he does not have the manpower,
the facilities and funds to improve the
services. But he remarks, gleaming
with the Indian spirit and pride that
“whatever they are doing is not only
for their own good, but for the prog-
ress of the whole nation”; “it is the
progress that is important more than
personal benefits; I am happy with my
dal-roti, I don’t need chicken”.
Le Marche, New Delhi
Store size: 6000 Square feet
Operating since: October 2005
Owner: Naresh Kumar Yadav &
Mini Yadav
Merchandise Mix: grocery, imported
meat, vegetables, cosmetics, bakery &
confectionary
Owned by Sugar N Spice, Le
Marche is a well planned four floor
supermarket with each floor occupy-
ing approximately 1500 square feet of
space. The basement houses grocery
items which besides other things, in-
cludes processed peas, baked beans,
sardines, boneless sardines, soletti,
French wild blueberry preserves, four
fruits preserves, peach preserves, sliced
olives, olive oils, canola oils and oth-
ers. The first floor is specialized for
bakery and confectionary items.
These amongst all include cheese
croissants, blueberry Danish patties,
sugar doughnuts, kiwi Danish Pat-
ties, chicken croissant, mushroom
croissant, English cake, lemon drops
and others. The third floor stacks cos-
metics and toiletries, comprising na-
tional as well as imported products.
The fourth floor is geared for fresh
vegetables, fresh meats, marinated
meats and frozen meats. A wide range
of meats are available here like those
imported from Spain, imported ham,
ham blocks, blackforest ham, prama
ham, bacon, sole fish fillets, cooked
ham and salami, shell fish, seafresh
prawns, red lobster prawns, sumeru
prawns, chicken garlic sausages, back
bacon, cocktail sausages, Canadian
cherry pink bacon, mortadela sicilina,
york sandwitch ham, Spanish smoked
turkey and else.
The Le Marche store is as well
equipped as any other big retail chain.
The shelves are well organized to fa-
cilitate self-service. The store has suf-
ficient space for free navigation. On
future plans Shubhendu, the store
manager tells that Le Marche has
plans of expansion though in a piece-
meal manner. He says that Le Marche
follows a “slow and steady” approach.
While the first le Marche store is lo-
cated in the posh area of Vasant Lok,
the second Le Marche store is opened
in Gurgaon and a third one is coming
up in the distinct mall Selectcity Walk,
though in a smaller yet similar concept
based format. Le Marche according to
Shubhendu, is a gourmet food store
which is certainly not in competition
with the hypermarkets. He states that
they cater to a set clientele, which is
largely focused around Chanakyapuri,
shanti Niketan, Vasant vihar and also
from far flung areas like Faridabad. Le
Marche’s diplomatic clientele, as per
Shubhendu, is mostly from Shanti
Niketan and Chanakyapuri.
Shubhendu informs that they cur-
rently don’t have a loyal customer base
but are looking forward to gradually
launch loyalty building strategies like
loyalty programmes. When inquired
about the level of business satisfac-
tion, Shubhendu states that they are
able to meet up their business expecta-
tions and thus, are satisfied. However,
Shubhendu does speak of the ubiqui-
tous problem of margins. He informs
that their margins, on an average range
between 15-20 percent, while those
from imported products vary between
20-25 percent. He further states that
when it comes to expansion, requi-
site resources are needed, which can
be mustered from the profit margins.
And that, it is the margins where they
have to negotiate a lot. This situation
prevails more when smaller retailers
do not go for bulk purchase and stock
products only according to specific
needs. Shubhendu tells that they do
not store products because they do
not keep storage.
On Le Marche’s customer relation-
ship management strategy, Shubhen-
du informs that they largely recruit
experienced staff. The fresher staff is
deputed to each floor for 15-20 days
and under the guidance of the senior
K.L Sachdeava, Proprietor, Lucky general Store, New Delhi
Rahul Yadav, Generation Next, Le Marche, New Delhi
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3. 24 • PROGRESSIVE GROCER • APRIL 2008 AHEAD OF WHAT’S NEXT WWW.PROGRESSIVEGROCER.COM
staff, thus helping them develop prod-
uct’s knowledge and behavioral tactics.
Shubhendu also states that their staff
is “multipurpose” and they keep rotat-
ing their staff from floor to floor.
Le Marche has also employed the
‘Retail Expert’ software for keeping
track of sales and stocks. As a measure
of expansion, Shubhendu informs
that they do intend to get into private
labels but that would be a part of their
slow and steady approach.
SteakHouse, New Delhi
Store size: 300 Square feet
Operating since: 1963
Merchandise mix: A wide range of
imported cheese, cold cuts, dressings,
condiments, breads and more.
If all good things come in small
packages, then the SteakHouse is cer-
tainly the one good thing that hap-
pened to Jor Bagh in Delhi. Estab-
lished in 1963, Kuldeep Shankar is the
helmsman who steers his store with
grand manners and virtue. Manning
a store approximately 300 square feet
in size, Shankar claims that “we spe-
cialise in the food here”. Reiterating
that his is not any department store
he informs that they have an inhouse
preparation of sausages, they specialise
in meat and that, Steakhouse is a food
store.
Besides domestic cheese, Steak-
house stocks a wide variety of import-
ed cheese. These range from the inge-
nious Gouda cheese imported from
Holland, Emmental cheese, Gruye`re,
Manchego Cheese made of sheeps’
milk from Spain, Tete de Moine,
Edam, Pecorino Romano, the French
Brie, Camembert, Normandy cheese,
Chevre and various others. Steakhouse
also stocks fresh pork, cold meats and
a wide variety of sausages.
On being inquired, Shankar de-
clines any plans to expand. One reason
he states is the real estate prices. About
modern retailing Shankar claims that
“it is very important to specialise in at
least one area; a retailer should know
and speak the language of its target
customers.” He states that in a store
like his there is a greater need for man-
ual assistance and that more trained
people are required only when there is
a need for large scale accounting prac-
tices. Implying a state of equilibrium
achieved, Shankar says that if he in-
vests for further expansion, the “law
of diminishing returns”may come
into play”.
Morning Stores, New Delhi
Store size: 3,500 Square feet
Operating since: 1965
Director: Agosh Malik
Merchandise Mix: National and
imported groceries
The Morning store was established
by K.C Malik, grandfather of the Di-
rector Agosh Malik and was the first,
according to Agosh Malik, to provide
for self-service in 1982 in the city of
Delhi. Morning stores is spread across
two floors with clearly organized
shelves, shopping trolleys, and suffi-
cient space for navigation. The mer-
chandise, according to Malik is less
of imported goods and more national
ones. Among the few imported items
include gherkins, salsa, olives, black
olives, anchovy fillets, smoked oys-
ter, sardines, mackerel, tuna chunks,
machi tuna, light meat tuna, cocktail
onions, white wine vinegar, red wine
vinegar, cider vinegar, aceto balsamico
di modena, salad cream and others.
When asked about his stand on
the impact of organized retailing,
Malik replies “in our trade margins
are thin, particularly from MNC’s,
margins range between 5-7 percent,
while 9 percent of overall margins go
in payments of electricity bills.” This
situation is aggravated by the “rising
cost of salaries”. Malik states that “the
cost of business is going high.”
On their plans of expansion, Ma-
lik told that they have plans, but first
they seek to set up a warehouse. About
big retail chains Malik states “big com-
panies do not replace products and
they do not have good movement of
goods either.” He further claims that
“bigger companies have the resources
to share distribution costs. They get a
margin of approximately 11 percent
from MNC’s, while we get around
6-7 percent.” On measures adopted
for meeting the challenges, Malik in-
forms that they have introduced their
private labels in a whole plethora of
groceries like spices, pulses, wheat
flour, snacks, namkeens, fruits, vege-
tables, dalia, corn porridge, baajra kh-
ichdi and many others. Malik informs
further that they focus on their loyal
customer base. They have a traffic of
approximately 900 customers visiting
their store everyday.
On their business strategy, Malik
says that they have a greater control
over the working of the business. He
states “we have a better purchase pol-
icy. We do not over-order.” He adds
that they, therefore, have a greater edge
in providing personalized services.
– Bhavya Misra
Paris Bakery, Mumbai
Store Size: 100 Square feet (front
-end)
Operating Since: 1963
Merchandise Mix: Bakery products
Why is it popular: Khari biscuits and
batasa biscuits
“Frankly, I am not at all both-
ered about all the modern retail for-
mat stores mushrooming since I have
managed to create a niche for myself
and I have my loyal set of customers.
I have a completely different quality
and my principle is to have a good
business based on making something
better and different from the market,”
says a confident Danesh Nezadkay,
partner of one of the oldest bakery in
Mumbai – Paris Bakery. The founda-
tion of Paris Bakery was laid down in
the early 1960 and since then through
just one store the customer pull comes
from even places like Pune. Sharing
the secret of his business, he says, “The
business secret is to create scarcity and
demand. Scarcity also you create and
demand also you create. Demand is
created through quality and scarcity
is to make something totally different
that is not available in the market any-
where else. I make things in a limit so
that a customer is pulled to my store
time and again.”
But to reach to this position,
Nezedkay had to face a lot of chal-
lenges in the initial years where he
did not have a lot of customers and
manpower. “I used to go from one
retail store to the other to sell my
products but majority everywhere, I
would meet with a negative response
but still I never compromised on my
principle of offering the best quality,”
Kuldeep Shankar, Proprietor, Steak House, New Delhi
Agosh Malik, Director, Morning Stores, New Delhi
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