MUMBAI: Big Box retailer HyperCITY Retail has exited the gourmet retailing, Gourmetcity, citing it as an unviable business. A subsidiary of the Raheja group-led Shopper’s Stop, HyperCITY had launched the gourment business in 2008 when it was headed by expat CEO Andrew Levermore.

After the initial jump in curiosity-led sales, the retailer recorded a marked drop in sales especially in the recent challenging consumer environment. Industry watchers say, in an inflationary market, consumer have been very watchful of their spends and shop more at value and discount formats to cut costs. While most retailers have announced plans earlier to enter the segment, Future Group’s Food Bazaar is one of the few players to do so while Spencer’s has a small presence. Godrej Group’s Nature’s Basket has managed to do comparatively well in few markets.

Gourmet retailing involves high-quality premium food and retailers are tapping this growing segment owing to rising incomes, globalization of taste and health and nutrition awareness. Gourmetcity as a live kitchen offered foods such as specialty cheeses, exotic snacks, pre-packaged meats, sauces, vegetables and fruit; bakery and confectionary products and dining accessories sourced from across the world.

The retailer has re-strategised its business plans to focus on its highly successful hypermarket format - with four HyperCITY stores in the pipeline in the coming year. HyperCITY, has successfully completed 4 years of operations in Mumbai and with its latest foray HyperCITY Hyderabad in July 2009, it has expanded its national footprint to four stores across India.

B S Nagesh, vice-chairman, HyperCITY said, “We have experienced tremendous success with the HyperCITY format, and have decided to consolidate our Gourmetcity business. Gourmetcity was a futuristic store concept created as part of our innovation and expansion plans but the return on investment does not make this business feasible. We are confident of the continued support from our partners, employees and stakeholders and belief of what works best in a mutually rewarding environment.”

The first GourmetCity was launched in Orbit Mall, Mumbai, but did not attract footfalls that translated into actual sales. HyperCity had also earlier called off plans to launch convenience formats which was to be called Express City.