Big Retailers eyeing the health & wellness market

News from the retail sector in India

Retailers are grappling with the effect of inflation and protecting their margins with a slew of efforts. Despite the somber tidings, global retailers continue to look to emerging markets, India being the most sought after, for future growth. A must-read this week is the heartwarming article on Project Sukanya.

-Chillibreeze Business Research Team

General Plans and Information

Inflation hurting margins of retailers

Indian retailers are a worried lot these days. There has been a decline in margins and it's one of the lowest ever, avow some retailers. As inflation touched a 41-month high, chains across the country, especially the smaller players, have been trying every trick in the book to attract consumers, and keep them coming in, even as they struggle to grow profitably.

The first and most critical area has been margins, and retailers have been bargaining harder with their suppliers. Says Pushpamitra Das, CEO of Wadhawan Food Retail that owns the Spinach chain of food and grocery stores in Mumbai, "Margins of all retailers have been affected and that includes us as well. So we are trying to negotiate hard with our suppliers so that we can get goods at cheaper rates and pass the benefits to consumers."

Spinach, like other stores, has been keeping a close tab on its competitors' pricing on a daily basis, and adjusting their rates accordingly, if required. However, lately most retailers have ended up charging almost identical prices for groceries.

Data released by the Department of Consumer Affairs shows that retail prices of grocery products has reached a 39-month high. While sugar and oil increased by 11%, gram rose by around 3%, and vegetables such as onion have become dearer for consumers by 11%. In manufactured items, sunflower oil shot up by 9% and vanaspati ghee (butter) went up 4%, while butter, mustard oil, sugar and groundnut oil became expensive by 1% each.

And while the government took some significant steps to counter rising food prices, retailers are having to do much more to survive this bearish phase in consumer spends. Unable to reduce fixed costs, retailers are trying to control variable costs and thereby bring the total operating costs down.

And while smaller players are finding the going tough, large players like Future Group's Pantaloon Retail seem less ruffled. Kishore Biyani, CEO of Future Group, says, "Demand for low end products has seen a dip while high end products, which are not price sensitive haven't been affected that much. We have still managed to give the best deals to our consumers in all segments." That may have to do with the leverage that more established chains like Pantaloon have with suppliers and manufacturers.

Meanwhile retailers are working on sustaining business through innovative promotional offers. Cross category promotions are now catching up where discounts are being offered on grocery purchases, redeemable against purchase of apparel and household products. Says RC Agarwal, CMD, Vishal Retail, "Most of us are now depending on promotional schemes. Even consumers have become more conscious and they would only go for the retail outlet which offers the best deal, in terms of offers and price."

Many brands on the other hand have marginally reduced the weight of their SKUs than increase prices. When asked whether the retailers have followed the same path for their in-house products, retailers deny any such measure for their private label brands. Explains R Subramanian, managing director, Subhiksha, "I think on an average there has been a decrease of around 10% in the sales of grocery but year-on-year we have grown."

April 14, 2008
Source: Economic Times

Top global retailers say India is most sought-after market

India has been identified as the most sought-after market in a major survey of 300 global retailers seeking to expand outside their domestic markets. New research by C B Richard Ellis, a leading London-headquartered real estate services firm, reveals that 40 per cent of retailers expect emerging markets to provide their main source of growth over the next five years.

The research report said that India was identified as the most sought-after emerging market. Twenty seven per cent of international retailers surveyed have opened their first store in India in the last year or are planning to do so soon. "India is considered particularly attractive because of the size of its market compared to its low presence of international retailers. With foreign ownership rules being gradually relaxed, foreign investment is also now possible, allowing single-brand retailers to own up to 49 per cent of their India operations," the report said.

The Global Emerging Markets Survey (GEMS) explores the views of some 300 retailers worldwide, representing a global portfolio of 25,000 stores, and provides the latest insight into retailer attitudes towards the world's emerging retail destinations.

April 12, 2008
Source: Economic Times

Big players - plans and investments

Big Bazaar looks to position itself as value retailer

Big Bazaar is planning to position itself as a value retailer after being hived off as an independent company within the Future Group. While a new company has been floated under the name of Future Hypermarket, the retailer is now considering a new name to represent its discount format.

Speaking to Business Line, Mr Rajan Malhotra, Chief Executive Officer, Big Bazaar, said, “Although we have registered a new company under the name of Future Hypermarket, we intend changing its name. Big Bazaar is not a hypermarket and is more of a value-for-money format and that is what the new company would stand for.”

Currently, Big Bazaar contributes 64 per cent of the Future Group’s total turnover of Rs 7,000 crore. With its standalone status as a company, Big Bazaar is expecting to drive greater efficiencies in its back-end operations.

With amalgamation of formats under various heads ranging from Food Bazaar to Furniture Bazaar, Big Bazaar is looking at distinguishing itself as a ‘value’ retailer in its segment rather than being clubbed with the rest of the existing hypermarkets in the country.

Besides, it is looking forward to re-launching its private label, DJ & C, as a national brand by giving the brand rights to Future Brands (the group vertical handling brands in the group). Targeting the youth segment, DJ&C is today worth Rs 200 crore in Bazaar’s kitty. “We intend re-launching it as a national brand through other retail outlets by the end of this month. We believe Big Bazaar has moved into a mature phase and that is a compelling reason to launch our youth brand at a national level. The DJ&C brand has crossed a turnover of Rs 200 crore and now has enough pull to take it to its next level,” states Mr Malhotra.

Meanwhile, Big Bazaar has roped in cricketer and India ODI captain Mahendra Singh Dhoni as the brand ambassador for its extensive collection of fashion apparel.

April 15, 2008
Source: Hindu Business Line

Spencer`s to open 8 outlets in Nashik

Spencer’s Retail of the RPG Group is planning to open eight new retail outlets at prime locations in Nashik, in the next four-five months.

The company would open the new outlets in two phases. In the first phase within a month, three outlets would come up at Tidke colony, Trimurti Chowk and Indira Nagar. The rest would be opened within the next four-five months, company sources said.

The company is in the process of identifying properties in prime locations of the city. It has already identified properties at Nashik Road and Bhabha Nagar. These outlets will have carpet areas ranging from 3,000 sft to 4,000 sft, they said refusing to divulge financial details.

Spencer’s Retail has around 400 retail outlets in 65 cities across the country.

April 14, 2008
Source: Business Standard

Bharti to unveil retail brand this month: Mittal

Bharti Group, Wal-Mart Stores Inc’s partner for a domestic wholesaling venture, plans to announce its strategy and brand name for a proposed retail chain this month.

Bharti, which is starting the retail chain independently of the Wal-Mart venture, would open its first store as a small supermarket covering 2,000 sq ft of space, Rajan Mittal, managing director of Bharti Enterprises, said in an interview at the World Retail Congress in Barcelona today. The equal venture with Wal-Mart, the world’s biggest retailer, was on schedule to open its first wholesale store by the end of the year and open 15 stores by 2015, Mittal said.

Bharti plans to spend as much as $2.5 billion (Rs 10,000 crore) on the retail venture, which it plans to develop independently of Wal-Mart as foreign investment in retailers is mostly barred.

Bharti expects the retail unit’s sales at Rs 20,000 crore ($5 billion) by 2015, Mittal said. It will set up supermarkets, hypermarkets and convenience stores and sell products including food, electronics, clothing and furniture. The venture may employ as many as 5,000 people.

April 12, 2008
Source: Business Standard

Shopper's Stop to Raise $250 Million to Add Stores

Shopper's Stop Ltd., which runs a chain of department stores in India, will raise $250 million in debt and the sale of shares to existing stockholders in the next three months to set up more outlets.

The retailer plans to raise as much as $125 million in a rights offer and an equal amount by selling debt, B.S. Nagesh, managing director of Mumbai-based Shopper's Stop, said in an interview at the World Retail Congress in Barcelona yesterday.
The company plans to add 4.4 million square feet of retail space in the next three years for a total of 6 million square feet to sell clothing and home decor in the nation, Nagesh said.

The retailer plans to invest a total of $350 million for expansion, with an additional $100 million coming from its own resources, Nagesh said.

Shopper's Stop ruled out any plans to acquire other retailers. “We need to become strong enough to start acquiring companies and if you look at the players, all the players are smaller, equal players,” Nagesh said. “At this point of time merging of equals or acquisition of equals does not make sense.”

April 11, 2008
Source: Bloomberg

Bharti plans 3-tier retail launch, mulls own label

Bharti Enterprises is planning a "three-pronged" launch on India's retail scene together with world leader Wal-Mart Stores Inc but a short supply of real estate is proving a challenge, managing director Rajan Bharti Mittal said in an interview.

Mittal, speaking to Reuters in an interview late Thursday, said the brand identity of the new venture was still under discussion but the deal was otherwise on track. "We are looking for at a three-pronged strategy with smaller convenience-style stores of 3,000 square feet, supermarkets of 35,000 to 40,000 square feet and hypermarkets of 75,000 to 125,000 square feet," Mittal said on the sidelines of the annual World Retail Congress.

Other considerations were the possibility of launching own label products a few years down the line, he added.

However, finding land for the supermarkets and hypermarkets was proving tough with supply limited and prices high. Bharti said the group was having to negotiate with real estate operators across India, such as DLF and Unitech, in order to corner suitable locations. "Real estate prices are a challenge and one of the reasons why it (the venture) is a little slow," Bharti said. "Prices are softening up which is a good thing because it was becoming noncompetitive ," he added.

April 12, 2008
Source: Reuters

Vah Magna Retail eyes rural pie

As most organised retailers focus only on major cities, the Hyderabad-based Vah Magna Retail has set its eyes on the growing disposable incomes in tier-IV cities. “Incomes in these towns have gone up significantly. There is good opportunity. We are going to open Magna stores in all the mandal (formerly taluk) headquarters,” Mr Anjaneyulu Kakkera, Chairman of the company, told Business Line.

Mr Anjaneyulu was the founder of the Trinethra retail network that he sold a few years ago to start Vah Magna. The company, which has a network of 70 retail outlets including two in Maharashtra, would go for a pilot in five districts in the next three months. There are over 1,000 mandals in Andhra Pradesh.

After investing Rs 120 crore in setting up a retail space of 5 lakh sq ft, the company has initiated talks with private equity firms to infuse funds to support the overall plan to reach 25 lakh sq ft (comprising 300 stores) in the next 24 months.

Recently, it opened its fourth format of Vah Magna Super Centre, which is an aggregator of top brands in apparel, food and home furnishing. Other Magna formats are hypermarkets, cash-and-carry and FoodEx supermarkets.

April 12, 2008
Source: Hindu Business Line

M&S, Reliance Retail likely to sign pact

Reliance Retail, the wholly owned subsidiary of Reliance Industries, is close to finalise a joint venture with UK retailer Marks & Spencer (M&S). Sources familiar with the developments said while no formal deal has been signed as yet, the partnership deal may be signed by next month.

M&S may hold a majority stake in the venture and the final contours of the partnership are being finalised. India allows 51 per cent foreign direct investment (FDI) in single-brand retail and 100 per cent in cash-and-carry operations. Multi-brand retail is barred for foreign companies and investors.

M&S is keen on growing its business in India, where organised retail constitutes a minuscule portion of the annual market of $7 billion (Rs 28,000 crore) for retailing. It has recently decided to ramp up its presence and address the large market opportunity that India represents. As part of its strategy, M&S has addressed the mass market by cutting prices of its merchandise by up to 40 per cent.

The company also plans to increase sourcing from India. Reliance Retail has around 540 stores across the country in multiple formats.

April 11, 2008
Source: Business Standard

Footmart plans retail formats at Future Group stores

Footmart Retail India, the 49:51 joint venture company between Liberty Shoes and Pantaloon Retail, will bring in its retail formats at the Future Group-owned stores such as Big Bazaar and Pantaloon.

There will be branded retail counters under Shoe Factory and Pairs (the retail formats belonging to Footmart Retail) to drive synergies in the footwear retailing business between the joint venture company and the Future Group.

Mr Anupam Bansal, Director, Footmart Retail India, told Business Line said: “Currently, we are in discussions with the Future Group. In the next phase, we plan to have the Shoe Factory and Pairs retail branded counters, within the Big Bazaar and Pantaloon outlets, which would be managed by the joint venture company.” At present, Big Bazaar has its footwear section under the name Footwear Bazaar while Pantaloon’s footwear section is devoid of a brand name. Adds Mr Bansal, “Pairs would now stand for the more premium footwear collection in the Pantaloon outlets while Big Bazaar would have its less premium footwear collection under the name of Shoe Factory.”

Big Bazaar gets its footwear supplied from a host of vendors including factory-surplus products, which are sold at a discount. The existing 18 Shoe Factory outlets have a similar profile to Big Bazaar as it stocks unbranded and branded footwear sourced from a variety of vendors in the ‘value for money’ segment. On the other hand, Pairs outlets stock the premium footwear brands and currently there are three outlets in Kolkata.

“The average price of a pair of shoes at Shoe Factory is pegged at Rs 600 and we will be bringing in more brands into this multi-brand retail outlet, which would also be included in the Big Bazaar counters. Pairs is the premium retailing format which will stand for the Pantaloon footwear counter,” says Mr Bansal.

Expecting to tap into the synergies in the footwear retailing business, Footmart Retail would now be in a better position to negotiate with the vendors. “The scale of buying would go up leading to greater volumes and increased margins in the footwear business. As our costs get reduced the top line would improve. We expect our turnover to grow from the existing Rs 25 crore to Rs 100 crore with this exercise,” says Mr Bansal.

Besides, Liberty Shoes is also planning to create special lines for the big retailers and also its own retailing formats. “There has to be a differentiating factor between the outlets and we are in talks with retailers to create special lines for them,” added Mr Bansal.

April 9, 2008
Source: Hindu Business Line

Regional News

The Loot wants to bring the 'loot lo' in South

Mumbai-based multi-brand discount retail chain The Loot wants to bring the ‘loot lo’ to the South in a big way this year.

The company plans to start around 25 outlets in the south — eight each in Tamil Nadu and Karnataka, five in Andhra Pradesh and four in Kerala — and 70 across India this year. The Loot currently has 30 stores across the country, of which two are in Karnataka (in Bangalore and Mysore) and wants to take the number to 100 by March 2009.

“We are targeting 10 stores this quarter and 20 in the subsequent quarters. We should be in Chennai with two stores by the end of the year,” The Loot MD Jay Gupta told ET. The company hopes to make its Kerala and Andhra debut before the end of the financial year.

The chain has had a good run so far in the South with its Bangalore and Mysore outlets. “We have got a very good response in Bangalore and we plan to open four more stores there. Our Mysore store is, in fact, most profitable, which speaks volumes about the retail potential in tier II cities,” Mr Gupta said.

“We will set up stores in every city that is a state capital, has an airport and wherever the population is above five lakh,” he said.

April 10, 2008
Source: Economic Times

International

Armani-DLF team proposes wholesale trade of Armani products

The recently approved Giorgio Armani-DLF joint venture proposes to undertake wholesale trading of ‘Armani’ branded products besides getting into single-brand retail trading of Armani products including apparel and perfumes.

The 51:49 venture between Giorgio Armani SpA and real estate major DLF would set up shops to undertake single-brand retail trading of Armani products such as footwear, leather products, watches, eyewear, jewellery, phones, sport gear and other accessories under the labels ‘Giorgio Armani’, ‘Emporio Armani’, ‘Armani Jean’, ‘Armani Junior’ and ‘Armani Collezioni’, sources said.

Giorgio Armani is engaged in the design, manufacture, distribution and sale of high fashion goods and accessories and has retail stores in 37 countries.

April 15, 2008
Source: Hindu Business Line

Armani, Cartier allowed single brand retailing

Iconic brands Cartier and Armani are all set to enter the country, with the Government approving on Tuesday their FDI (foreign direct investment) proposals under single-brand retailing.

Richemont Services BV plans to set up a new joint venture in India with 51 per cent foreign equity under brand name ‘Cartier’. Richemont Group’s joint venture entails an FDI of Rs 20 lakh. The Group’s interests globally encompass some of the most prestigious names in the luxury industry including Cartier, Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC, Panerai and Montblanc.

Italian fashion brand Giorgio Armani’s joint venture will also be with 51 per cent foreign equity for retail trading of ‘Armani’ branded products. Sources said that Armani has entered into 51:49 joint venture with real estate company DLF for the proposed venture. The proposal entails Rs 1.02 crore as FDI, an official statement said here.

Sources said that the joint venture would undertake the sale of top Armani brands which will be retailed through DLF’s Emporio Mall, amongst others. This first-of-its-kind luxury mall – Emporio – is coming up in New Delhi, and is expected to be operational around May-June.

The luxury retail market in India is estimated at $3.5 billion growing at a CAGR of 45-50 per cent. The 2007 Asia- Pacific Wealth Report, released by Merrill Lynch and Capgemini, says that India has recorded the world’s second-fastest growth in the number of high networth individuals at 20.5 per cent, making it a lucrative luxury market.

April 9, 2008
Source: Hindu Business Line

Guy Laroche is seeking partners for India entry

The €300-million French couture brand Guy Laroche has framed a two-pronged strategy for its entry into India. The company will be debuting with a women’s ready-to-wear line created by designer Marcel Marongiu. For this, it will be seeking partners for commercial retail of the line, which will be manufactured in France.

The second step will be to scout for manufacturing and distribution licensees for its other products to be sold under the Guy Laroche brand. Despite the entry of well-known brands into India, Guy Laroche seems to have no worries over not having the first-mover advantage.

In an emailed interview from France, Hendrik Penndorf, CEO, Guy Laroche, told DNA Money: “I think, this is just the right time to start business in India; the potential is huge and the future is promising for a French couture brand.”

Officials will soon be in India to gather knowledge of the Indian market and its possibilities.

“A second line of women’s ready-to-wear, a men’s line, underwear, sportswear, fashion accessories such as leather goods, shoes, belts and ties, can be very interesting fields for future partnerships with Indian companies,” says Penndorf.

The company is aiming at standalone boutiques in malls in the main cities. “I also expect to create shop-in-shops in department stores with our future industrial licensees,” Penndorf said.

April 9, 2008
Source: DNA

Carrefour to Invest in India Before Rules Are Relaxed

Carrefour SA, the world's second- largest retailer, said it was worth investing in India before the country lifts restrictions that bar overseas companies from owning stores in the world's second-most populous nation.

India is a “huge opportunity,” Jose Luis Duran, chief executive officer of Carrefour, said today in his keynote speech at the World Retail Conference in Barcelona, Spain. The Paris-based retailer is holding talks with several potential Indian partners to start a wholesale business and will announce the winner in “weeks or months to come,” Duran said in an interview on the sidelines of the conference. Carrefour also plans to “accelerate opening of other formats” as soon as India's laws allow it, he said.

The French retailer plans to open hypermarkets in India with a local partner and wholesale stores by the second half of 2009. Carrefour previously said it would select the local partner by April 2008.

April 9, 2008
Source: Bloomberg

Health & Wellness

Reliance to retail Dr Batra's drugs

Reliance Retail is learnt to be in talks with the country's largest homeopathic clinic chain Dr Batra's Clinic for a shop in the former's hypermarket chain. According to a source, initial round of talks have already started though the exact model of a possible tieup are yet to be worked out.

However, any prospective tieup is unlikely to see an equity deal. It is learnt that Dr Batra’s Clinic has turned down equity participation proposals from other retail chains in the past.

The Rs 2,500-crore Reliance Retail already has its own healthcare chain — Wellness Store (currently six). Reliance Retail opened its first Wellness Store in Hyderabad last year. Besides a range of healthcare services, it also sells allopathic, ayurvedic and homeopathic medicines.

Dr Batra’s Clinic currently has 54 clinics in 17 cities across the country and is on a strategic expansion mode over the next two years in India and few overseas markets.

April 14, 2008
Source: Economic Times

Yash Birla to enter domestic health & wellness market

The Rs 3,000-crore Yash Birla group has decided to enter the domestic health and wellness market through a new company, Birla Wellness.

In the initial phase, the group would invest Rs 300 crore in the new segment. The group has already formed a joint venture with leading hospital group Apollo Hospitals to enter the hospital segment while it’s close to picking up a controlling stake in Kerala Ayurvedic Health Spa, a leading ayurvedic therapy firm in south India. Birla Wellness would also form a joint venture with a leading Singapore-based health and wellness firm to bring high-end health and wellness products and programmes to the Indian market, sources close to development said.

Currently, the Indian health and wellness market, estimated at Rs 2,000 crore, is on a boom with a year-on-year growth of over 25%. According to analysts tracking the sector, the attitude and preferences of the Indian consumers are changing due to a rise in their disposable incomes, high consumption propensity and exposure to global trends.

Big retail firms are offering wellness products such as medical and nutritional products, fitness equipment, consultation, eye testing, books, and audio video material on health and wellness under one roof. In fact, Yash Birla is not the only group eyeing the booming health and wellness sector. Others like Manipal Group and Dabur India have already entered the market with grand plans for the future.

April 14, 2008
Source: Economic Times

Luxury & Lifestyle

Vardhaman Developers to invest Rs 400 cr in jewellery malls

Vardhaman Developers, which are set to launch Mumbai's first jewellery mall Jewel World, will build four more such malls with an investment of over Rs 400 crore, a top company official said.

"We hope to launch Jewel World by June and are planning to build four more jewellery malls in Mumbai before we start expanding in India," Vardhaman Developers Managing Director Rajesh Vardhan told PTI.

"The investments in the four malls will be upwards of Rs 400 crore and will be raised by the company through its own resouces," Vardhan added. The four malls are likely to come up in the suburban Mumbai areas of Borivli, Mulund, Ghatkopar and Santa Cruz.

Jewel World, which proposes to be a one-stop-shop for all kinds of jewellery in the traditional Zaveri Bazaar market here, probably has the most expensive lease rentals.

"The lease rentals for Jewel World is Rs 475 per square feet, almost double the general malls and a tad more than the high street malls," Vardhan said. "With conservative estimates, we expect Jewel World to witness a Rs 2,000 crore turnover in the first year of operations," Vardhan said.

Built in the historical Cotton Exchange building at Zaveri Bazaar and spread in an area of 30,000 sq feet, Jewel World has weeded out all issues of safety with a three-ring security, automated shutters, bank and vaults and ample parking space. The mall has been built by Vardhaman Developers Ltd in association with Bherumal Shamandas Jewellers.

The first phase of development had an investment of Rs 40 crore, apart from the Rs 28 crore the company paid to acquire the building. "Almost 80 per cent of Jewel World has been booked, including local and national brands. Jewellers from Dubai, Italy and US too are in talks with us for setting up shop," Vardhan added.

April 13, 2008
Source: Economic Times

Food & Grocery

Papa Johns opens new outlet

Papa Johns, the world’s third largest Pizza chain which entered India in 2006, has opened its fourth outlet in Mumbai in Powai, which will be the flagship store in Western India.

With this, Papa Johns has nine outlets in India. Their investment in India is likely to exceed Rs 250 crore in the next our years. JIP Fashion and Restaurant India Pvt Ltd is their franchisee in India.

Mr Myles Felt, VP-International, Papa Johns, said, “The Indian market is growing and provides immense opportunities for multinational chains in the country. Growth in the number of total pizza outlets in last 8-9 years has been 15-20 per cent and I expect it to grow even faster at 25-40 per cent this year and beyond.”

Mr Tapan Vaidya, General Manager, JIP, added, “The flagship outlet in Powai will further consolidate the Papa Johns brand in India. The Powai outlet covers dine-in and delivery and is sprawled over 2,550 sq ft. It will be open from 11am-11pm daily. There is an exciting inaugural offer, wherein, the first 50 customers at the Powai outlet can avail themselves of a free Pizza once a week for one full year”.

April 11, 2008
Source: Hindu Business Line

Spinach readies for Rs 400-cr expansion

Fresh food retailer Spinach has made an outlay of Rs 400 crore to spread pan-India. The move follows the Wadhawan group retail arm taking over a number of ailing retail outlets and nascent formats such as S-Mart in Bangalore, Maratha Co-operative Store (with which it signed a management contract) and home delivery service Sangam Direct in Mumbai and Delhi-based Home Market and Sab Ka Bazaar.

The acquisitions had helped Spinach grow to 165 stores. “We are expanding to 10 more cities this year, with a budget close to Rs 400 crore,” Spinach CEO Pushpamitra Das told ET. The company will fund the expansion through a combination of promoters’ funds and debt.

Spinach is also considering acquiring more retail chains that are in need of financial support. Maratha Co-operative stores, for instance, was plagued by massive inefficiencies, low margins and a total lack of technology infusion before signing a management contract with Spinach in 2007.

“Today, we have not only improved the fundamentals, we are also planning to open 10 more Maratha co-operatives this year,” Mr Das said. At the same time, Sangam, which was earlier a Mumbai-specific home delivery service for FMCG goods, grains and pulses, is now being revamped. It will soon go national and be integrated with Spinach group’s brick and mortar stores.

Due to its growing footprint, the company is tying up its logistics end that will shore up its national sourcing as well as supply chain. Mr Das said talks are on with logistics firms such as Mahindra Logistics, Agility and TCI supply chain solutions.

These firms will deliver fresh fruits and vegetables from the distribution centre (where they are bought from farmers) to the new outlets in these ten new cities. The group is aiming to cut down the time for the produce to reach the store from the distribution centre from the current 18-20 hours, to between 10 and 12 hours.

April 10, 2008
Source: Economic Times

Domino’s Pizza plans Rs 70-crore expansion

The Domino’s Pizza delivery man will be knocking on more doors of fast food lovers in towns such as Panipat, Patiala, Karnal and Mysore.

The pizza chain is spending Rs 70 crore to increase presence in another 10 -15 new cities. The chain expects to have 250 outlets by the end of the year, against the existing 185.
Building capacity

According to Mr Dev Amritesh, Vice-President, Marketing, Domino’s Pizza, an additional Rs 15 crore will be spent in building capacity, commissaries and strengthening supply chain to support its expansion plans. The fast food chain is currently present in 34 cities.

“We have recently launched a value deal, a fun meal for four that works out to Rs 45 per single serve pizza. It’s an interesting and relevant price point for consumers of lower SECs, or SEC B and C,” said Mr Amritesh. Such consumers contribute almost 50 per cent of Domino’s revenues today. The company has also announced a new butter flavoured with special herbs ‘Sicilian Wheat Treat Pizza’. It’s the first time wheat is being used in an Indian pizzeria chain, according to Domino’s. However, atta might be used as a bait for the health conscious elsewhere, at Domino’s they are introducing it for its other virtues, primarily the familiarity of the flour and the preference that Indians have for the taste.

The chain is also likely to spend about Rs 20-25 crore this year on advertising (80 per cent of which will be reserved for TV commercials), of which Rs 5 crore is to be spent on selling the new Sicilian Wheat Treat Pizza.

Domino’s has recorded a growth of 55 per cent in revenues, said Mr Amritesh, adding that the chain hoped to maintain that growth this year too, despite a significant increase in input cost.

April 9, 2008
Source: Hindu Business Line

Unique Formats

Manned by women

Big retail chains such as Reliance Fresh, Spencer's Daily and Big Bazaar have competition. Not from a rival business group, but from a Kolkata-based enterprising woman - Aparna Banerjee.

An alumni of the prestigious Xavier Labour Relations Institute (XLRI) in Jamshedpur, Bihar, Aparna, 36, retails her goods under the name of Project Sukanya. Interestingly, the goods are not sold from huge showrooms, but from 54 roadside mobile kiosks, manned by 141 women who work in shifts. Another 3,500 women directly benefit from this project by making products such as handicraft items, edibles like papad , pickles and jams. Packaged spices and ready-to-eat lunches are also sold. And in the next six months 500 more `boucarts' would be deployed across 18 districts, again manned by women.

"When I got the idea of these mobile kiosks, my first step was to finalise the design and patent it under the Intellectual Property Rights Act.," says Aparna. The project was the result of extensive research based on material gathered from 62 villages across India during her studies on Anthropology at Calcutta University.

"I did my MBA in Logistics and Supply Chain Management from XLRI and realised during that time that I wanted to become a social entrepreneur. I then did a course in Anthropology to get a grip on human rights. I realised that women need financial independence to get freedom from restrictions, abuse and social taboos," says Aparna, who struggled to complete her studies under great financial constraints.

She realised that marketing was the bottleneck of small-scale enterprises and blocking cash within a supply chain was not advisable. "I found that retail was the only option. But setting up huge retail space was beyond my capabilities. I hit upon the mobile kiosk idea and worked on it for two years, getting all required permissions and licences to place them on the roads. No loophole was left open. The carts are manufactured at our own unit," she adds.

When Aparna sent her pilot Project Sukanya to the Prime Minister's Office (PMO) in 2005, the PM encouraged her to go ahead, assuring assistance in case of hurdles. When apprised, Chief Minister of West Bengal, Buddhadeb Bhattacharjee, also instructed his secretariat to offer support.

The attractively-designed sleek kiosks, which are placed at major crossings in the city, easily catch the eye. The apron-clad women manning them are polite and knowledgeable about the products. Kakoli Das, 24, is one of the smiling faces at the Rashbehari kiosk. "We don't have any problems with the police regarding parking of our kiosk. Our paperwork is watertight. The customers, too, are friendly. We get repeat clients on a regular basis now."

The turnover for the Project, which started rolling in early 2007, has already reached Rs 1.05 crore. The target is to touch Rs 50 crore by 2009. Project Sukanya has a 20,000 sq. ft. common facility centre at Topsia. The rural women who supply the products come here with their samples.

All women within the project are, as Aparna puts it, "those in need of a livelihood". Jayanti Chatterjee, 49, from Baharu village in South 24 Parganas district, responded to one of the first advertisements placed by Sukanya in a newspaper and approached Aparna for a job. A school dropout, Jayanti had done menial jobs for over three decades and had managed to send her six siblings to school. However, they all went their ways once they were well settled, leaving her to cope with an ailing mother. Jayanti, who is in charge of the Sukanya Tollygunge kiosk, today earns a regular Rs 3,000. She and her mother now reside in a rented one-room unit in Kolkata.

Swapna Dutta, 50, was dumped by her husband during the initial years of their marriage. She managed to educate her son up to higher secondary by doing odd jobs. However, when he secured admission to an engineering college, Swapna found herself helpless. The Sukanya project came to her rescue and she pays the tuition fee from her regular monthly salary of Rs 2,800.

On the anvil for Aparna is a rural initiative. Project Sukanya is set to adopt a village, offering alternative livelihood development. Sukanya is also set to spread its wings beyond West Bengal with 30 new outlets. Groups of needy women have already been identified in States such as Kashmir from where consignments of saffron and apples have already arrived to be sold from the mobile kiosks. Here too, it is women who are at the back and front ends of operations.

April 11, 2008
Source: Hindu Business Line