Kirana stores innovate in battle against retail giants

Sep 22 2013, 15:07 IST
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The India Retail Report 2013 says that local retailers are growing profitably as compared to large retailers (Reuters) The India Retail Report 2013 says that local retailers are growing profitably as compared to large retailers (Reuters)
SummaryAbout 57,000 local retailers in the country resorted to modern retail practices in the past two years

Even as foreign retail chains are yet to embark on a journey to capture the Indian consumers, the next-door kirana stores have become more aggressive in the “battle” against their giant counterparts. If the recent India Retail Report 2013 is anything to go by, about 57,000 local retailers in the country resorted to modern retail practices in the past two years.

Take the case of the 70-year-old Navjeevan Stores in Maharashtra’s Jalgaon district for instance. The company has five stores in the district with an annual turnover of R36 crore. Constant upgrading of categories and systematic stacking of products have helped Navjeevan rake in revenues of R2,600 per square feet a month.

In contrast, Shoppers Stop’s hypermarket chain, HyperCity, which had incurred losses of R87.7 crore in FY13, had sales per square feet of R1,877 per month during the first quarter.

“Over the past two years, we have invested heavily on an improved billing system and better visual appeal,” says Amit Kankaria, owner of the Navjeevan chain of stores. “We closely monitor the consumer pattern and stock accordingly. We experience the changes in the sector and learn from them, unlike the giant retail firms that learn how to sell, and later apply what they learnt,” he says.

The India Retail Report 2013 goes on to add that local retailers are growing profitably as compared to large retailers. This comes at a time when big retail chains are in the consolidation phase, and as they attempt to narrow down their losses.

Another instance is of Sarvodaya Super Market, a 40-year-old store in Mumbai’s Dadar area, which recently opened another outlet in Navi Mumbai.

Both the stores have sales of R5,500 per square feet on an average, says owner Chetan Sangoi. Both the stores have combined sales of R30 crore.

Sangoi’s Sarvodaya opted for a cleaner and modern feel in his stores after he saw young customers rushing to Big Bazaar in High Street Phoenix, formerly known as Phoenix Mills.

“We opted for the self-service format and planned our categories in such a way that is convenient to customers. For example, we observe what consumers pick up in the morning, and what they may pick up in the evening, and accordingly place the products during the day,” Sangoi says.

Besides modernising themselves, these stores offer the advantages of traditional kirana shops like home delivery, purchase on credit and newer categories like frozen food. Sangoi has consulted close

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