We did a case on Spencer's entry in India and tried measuring its feasibility considering its competitors Big Bazaar's existence.

1. CHANNEL MANAGEMENT
Group F: Laura Fee Hahnefeldt, Javier Fernandez Gil, Ananya Jain,
Marine Laval, Imre Szapary, Géraldine Willame
SPENCER'S RETAIL
STORES IN INDIA

2. AGENDA
Indian Retail Industry
About Spencer
Spencer's Competition
The problem statement
Spencer's target segment and
customer profile
Earlier positioning - Taste The
World
New positioning - Make Fine Living
Affordable
Recommendations

3. I n d i a n R e t a i l I n d u s t r y
S i z e o f t h e I n d i a n
r e t a i l s e c t o r : U S $ 4 0 0
b i l l i o n i n 2 0 1 1
G r o w i n g a t a n a v e r a g e
a n n u a l r a t e o f 8 t o 1 0
p e r c e n t
M o r e t h a n 1 2 m i l l i o n
r e t a i l s t o r e s
H i g h l y f r a g m e n t e d
i n d u s t r y s t r u c t u r e
O r g a n i s e d r e t a i l :
p r e s e n t o n l y i n b i g a n d
e m e r g i n g c i t i e s
- 3 0 p e r c e n t o f t h e
I n d i a n p o p u l a t i o n & 7 0
p e r c e n t o f I n d i a n G D P

4. SPENCER
RETAIL
- Founded in 1983 by 2
british nationals
- Closely held, public
limited company
- Member of RP-Sanjiv
Goenka holding since 1989,
with market capitalization
of $1,67 billion dollars.

5. SPENCER'S EXPRESS
Size: 1000 sq. ft.
Category:
Convenience Store
Stocks: dairy, fruits,
vegetables, bread,
ready to eats, fish
meat
Time of visit: anytime

6. SPENCER'S DAILY
Size: from 2000 sq. ft.
upto 5000 sq. ft.
Category:
Convenience Store
Stocks: all groceries,
fresh produces and
weekly top-up
shopping such as
cereal etc.
Time of visit: on an
average second or
third day

7. SPENCER'S SUPER
Size: upto 10000 sq.ft.
Category: Convenience
Store
Stocks: not only dairy
products but also home
care and personal
products
Time of visit: fortnightly
to monthly

8. SPENCER'S HYPER
Size: greater
than 15000 sq.ft.
Category: Anchor Stores
Stocks: everything from
food to furniture at
concessional prices or deals
Time of visit: monthly or
bimonthly
Combined a supermarket
with a department store
In-store programs

9. Which other grocery stores
do you shop at...?

10. Competitor's Landscape
205 stores
(163 Big, 43 Food)
1300 stores
93 cities 120 cities
180 stores
44 cities
Big Bazaar:
(Hypermarkets)
Food Bazaar:
(Supermarkets)
Reliance Super
Reliance Fresh
Reliance Mart
Spencer’s Express,
Spencer’s Daily,
Spencer’s Super,
Spencer’s Hyper

11. bundling pricing strategy
sells speciality products
wellpresentedstaff
private
labels
value added services
backward
integration
Competitive prices
No consumer loyalty
Carries a wide range
Different formats
Present in Big and emerging cities
Attribute Map

12. Spencer’s has to find a way to maintain its
reputation as the top-notch retail choice for
Indian shoppers while at the same time
encouraging SEC B and SEC C shoppers to
embrace it as their store.
Problem
Statement

13. Growing middle
class that longed
for a shopping
experience similar
to shopping at
international
supermarkets and
department stores
Target
segment

14. 2 5 - 3 4
S e n i o r
E x e c u t i v e
M a l e
A l o n e
B u s i n e s s m a n
& S r . E x e c
S E C A 1 & A 2
3 5 %
4 5 %
2 9 %
7 6 %
8 2 %
Customer Profile

15. Taste The World
Positioning
The goal of the TTW
positioning was to brand the
retail store through its décor,
its merchandising and its
pricing policies.
The value proposition was to
provide shoppers a futuristic
and international shopping
experience.

16. TTW
BROAD COMPONENTS
Highlight of British parentage
roots
Product displays like seen in
the US or Europe
Items with opening price
points and price-promotion
signs were a rarity.

17. product quality
store
environment
value for money
Customer satisfaction after TTW

18. MAKE FINE LIVING
AFFORDABLE POSITIONING
Retaining the high quality image of
Spencer’s
Correct Spencer’s expensive price
perception and retain the high
quality image for consumers.
Shifting to more of a value
retailer
Focused on growing middle class
that longed for a shopping
experience similar to shopping at
international supermarkets and
department stores

19. They were items that most households
bought regularly and therefore were
knowledgeable about the prices of these
items
K E Y M E R C H A N D I S I N G C O M P O N E N T S :
K N O W N V A L U E
I T E M S ( K V I )
O P E N I N G P R I C E
P O I N T ( O P P )
Introduction of OPP shop-keeping units in
value-sensitive categories.
S P E N C E R ’ S
P R I V A T E L A B E L S
TThe goal was to leverage the high-quality
perception of Spencer’s and offer private
labels at competitive prices.

20. The MFLA Transition
People's response to,
Range and assortment
Customer service
Store spaciousness
Merchandise Quality
Price
Improved
Same as earlier

21. MFLA Trouble....
Profit margin
27,41%
Sales Volume
75,60%

22. play on your
strengths
RECOMMENDATIONS
a few
to solve the problem

23. 01 Improve the sales
from the
departmental
store
Apparel
Electronics & Electricals
General Merchandise
Contribution
to sales Margin
5
7
9
30
7
9

24. 02 Capture B1 and B2
socioeconomic
groups of shoppers
A1
A2
B1
B2
Indian population %age
3
7
8
8
43
24
15
7
Spencer's shoppers

25. 03 Open stores in
posh areas of Delhi
Delhi
GDP per capita
175,812 0
Total stores

26. 04 Do not lose its
identity of being an
upper class
grocery store
Do not decrease the prices
Concentrate on high end product availability
to maintain the upper hand
Self checkouts for busy people (Big Bazaar
is close to Spencer in terms of Quick check-
outs)
Better advertise their private labels

27. 05 Improve "Hara
Bhara" & "Anna
Dhara"
Promote freshness and variety available, not
the less price
Lesser price may indicate lesser quality, not
prompting the consumer to purchase

28. Q & A