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Top Retail Chains Offer Plethora Of Consumer-Oriented Services

October 1, 2010 By Leave a Comment

Destination retailing is the new buzz in the country’s $20-billion organised retailing sector. Besides their regular offerings, top retailers now woo consumers through services such as salons, spa, laundry and even travel services. Retail chains such as Spencer’s Retail, Hypercity, and have already initiated moves to convert their large-format outlets into destination stores that offer a plethora of consumer-oriented services.

“The line between products and services is blurring in organised retail,” says Sanjay Gupta, head (marketing) at Spencer’s Retail. “Services retailing is going to be the next big thing that retailers will offer in order to truly become a one-stop shop, since shopping time is slowly becoming a premium with most consumers of modern trade,” he adds.

Spencer’s Retail is already offering exclusive wine and liquor corner, cigar zone, live bakery, gourmet section, pet care and florist service in select outlets. The RPG Retail flagship is also in talks with reputed chains to introduce salons and laundry services by the end of this financial year.

Country’s largest retailer Future Group has set up salons, fitness centres and food courts inside all its Big Bazaar Family Centers, while Retail offers laundry, salon and spa services in seven outlets. Jewellery retailer Gitanjali Group too plans such a model for its Maya chain.

“What retailers are looking at is to engage the customers. These services lead to a lot of additional footfalls and help increase the average ticket value, says Rohit Bhatiani, principal consultant (retail and consumer products division) at Technopak.

Destination retailing is an established concept in the global market, with retailers such as Wal-Mart and Tesco even selling financial services like insurance, auto loans and medical insurance under their store banner. Analysts expect the concept, now primarily targeted at metros and other top cities, to pick up in India over time as shoppers look for new concessions and retailers add new offerings to increase footfalls in their outlets.

The model of operation is hybrid. While sometime retailers run such services themselves, they also partner with established players for other services. For instance, while Hypercity runs bookstores under its own banner Crossword, it also has a number of partnerships: Kodak for imaging service, Vodafone for telecom, Café Coffee Day for cafes, Pressto and Jyothy Fabrics to run laundry, Enrich Salon and Pinks & Bloos for salons and Orchid Thai Spa for spa services.

Likewise, Future Group runs the salon ‘Star & Sitara’ under its own label. When the retailer ties up with a partner, it charges a rent and usually has a revenue-sharing deal with the service provider. “It is a win-win-win model for the retailer, consumer and the concessionaire,” says Kumar Rajagopalan, CEO of industry lobby, Retailers Association of India.

On an average, hypermarkets in India are spread over 45,000 sq ft to one lakh sq ft, while some of the small-town stores are operating at 35,000 sq ft. Typically retailers give up to 20% of their space for concession, says Mr Rajagopalan.

Destination shopping is still at a nascent stage in India. Across the country, Spencer’s has only nine wine and liquor corners, one cigar zone, four live bakeries and one pet care centre. And, across its seven stores, K Raheja Group’s Hypercity has one ATM, four bookstores, five cafes, two laundries, one pharmacy and three spas and salons.

But they plan to scale it up. Kishore Biyani, CEO of Future Group, says the group plans to open around 11 salons and 4-5 entertainment zones inside the upcoming Big Bazaar stores over the next one year. “It’s all about engaging with the customer. We try and develop niches which would build up a better engagement with our stores,” says Mr Biyani.

Hypercity, which also runs the Shopper’s Stop and Crossword stores, plans to roll out 3-4 more salons and spas and has three ATMs under installation. “We develop concessions based on need and market development,” says B Nagesh of Hypercity.

“For instance if we can get a lady to stay back for 30-35 extra minutes within our store for a haircare or pampering session, that’s good for us.” He estimates that such services account for 3-5% of Hypercity’s overall revenues. According to Spencer’s Gupta, such services improve customer loyalty, adding they have led to 25-30% growth in store revenue.

Aditya Birla Retail is using concessions selectively for its network of 525 More superstores and the eight hypermarts, says its CEO Thomas Varghese.

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Future Group, Hypercity, Spencers, Shoppers Stop happy with annual sales: Retailers

September 3, 2010 By Leave a Comment

The trend of annual sales of large retailers, including the Future Group, Shoppers Stop and Spencer’s Retail, has set in. Interestingly, these sales contribute 20-40% to the overall revenues of these companies, along with boosting the same-store sales (SSS) growth.

Sale

Future Group registered an SSS growth of 30-40% during Independence Day sales. While it recently concluded its five-day long ‘Mahabachat’ across its outlets (Big Bazaar and Food Bazaar), Shoppers Stop and Hypercity is continuing with their annual sales. For Shoppers Stop, the sale ends on September 5.

Reportedly, Future Group was targeting Rs 800-crore sales during the five-day promotional period. Kishore Biyani, founder & CEO, Future Group, said, “These activations and promotions give boost of almost 30-40% to the same-store-sales growth as well as the overall revenues of the retail business.”

Although Biyani refused to divulge the revenues earned during the five-day offer, Rakesh Biyani, CEO of the Group’s retail business, said it was the largest trading week for Future Value Retail. A spokesperson confirmed that the company did a business of Rs 100 crore across its 132 Big Bazaars and 185 Food Bazaars on the Independence Day itself. For these activities to be successful, a lot depends on the negotiating power of a retailer with its suppliers.

The fortnight sale at Hypercity, headed by BS Nagesh, started from August 14. It had offered an up to 50% discount on apparels, accessories, home ware and appliances to gadgets across all its stores. However, for Shoppers Stop, which posted a better-than-expected SSS growth of 21% in the first quarter of FY11, the sale is biannual and would extend till September 5.

Govind Shrikhande, managing director, Shoppers Stop, said, “We don’t have a particular figure as far as expectations from these sales are concerned. Typically, these sales, along with summer and winter sales, contribute to about 20% to the overall business.”

The biannual sale at Shoppers Stop is under apparel and non-apparel verticals across 80 product categories, excluding cosmetics. For Hypercity, this would be its annual sale since it is mostly into food grocery, which is not seasonal.

RPG group-led Spencer’s Retail has about four to five major yearly events such as Republic Day in January, Independence Day in August, Regional new years in April, the festival time in October and New year in December. A Spencer’s spokesperson said, “These annual events have always been sale boosters since all of them are major buying instances for the consumers. We induce more buying by giving offers/discounts in relevant products. The recently concluded Independence Day promo at Spencer’s registered a 20% increase in footfalls.”

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Shoppers Stop eyes around Rs 1,000 crore revenues from Hypercity

July 4, 2010 By Leave a Comment

K Raheja-promoted retail chain Shoppers Stop, which has a majority stake in the group’s hypermarket format Hypercity, expects the latter to be profitable at the company level in FY 12 and a tripling of its revenues by then, a top company official said.

Shoppers Stop had increased its stake in Hypercity from 19 per cent to 51 per cent recently to squeeze maximum from consumers, whose spending on food items is around 65 per cent, he said.

“Now that we have acquired a majority stake in Hypercity, our main aim will be its expansion and making it profitable. We expect a break-even for Hypercity at the company level in FY 12. By then, we also expect our revenues to grow three-fold,” Shoppers Stop’s CEO and President, Govind Shrikhande, told PTI here.

Hypercity’s revenues currently stand at Rs 330 crore and is likely to be around Rs 1,000 crore by FY 12.

On its strategy post-stake acquisition, Shrikhande said, “There will be no change in strategies or leadership. Our future plans for both Shoppers Stop and Hypercity will remain the same.”

The Rs 1,500 crore lifestyle retailer now plans to focus on its food and grocery segment by opening eight more Hypercity outlets by next fiscal. However, its major earnings come from apparels and accessories due to higher margins.

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Raheja vs Raheja duel to spice up retail mart

April 14, 2010 By Leave a Comment
Construction baron GL Raheja is about to stretch his retail compass by taking over Homecare Retail Mart, a chain of hypermarket stores mauled by the slowdown, pitting himself against brother CL Raheja’s Shoppers Stop and Hypercity. The GL Raheja group is buying out other high net worth investors in the Mumbai-based company for an undisclosed amount, said two retail insiders familiar with the development.
The group has been a minority partner in the privately-held owner of Magnet stores since inception in 2007. The struggling company, which shut five stores in Maharashtra and Gujarat because shoppers pinched pennies during the slowdown, is seen as the perfect retail launch pad for a group whose mainstay is property development and hotels.
“Buying Magnet will provide a strategic entry for the Raheja group into the retail sector,” said Susil Dungarwal, a real estate and retail consultant, adding that it must synchronise back-end and front-end operations to benefit from the move. A questionnaire sent to the Mumbai office of GL Raheja’s son Sandeep Raheja remained answered. Repeated calls to the office were met with the response that he is travelling.
Magnet now has only one hypermarket store in central Mumbai’s Mahim, but the Rahejas plan to launch stores in suburbs such as Malad and Thane. “The expansion will focus on Mumbai for the time being,” said one person, a Homecare associate.
The group, known for its high-rises in urban India, will first focus on streamlining operations, however. Sandeep Raheja has already waded into the operations. Also, a battery of chartered accountants from the Raheja group is working with Magnet’s management. The group is also likely to appoint a new managing director, said the persons.
On expansion, the Rahejas are likely to follow big retailers such as Reliance Retail, Aditya Birla Group’s More, Big Bazaar and Shoppers Stop, which are cautious despite the prospect of shoppers returning on the back of a growing economy, as the slowdown is still fresh in their minds.
Retailers and developers are working together to pull down costs and sustain the 20-25% growth.
GL Raheja’s plans to diversify into retail will eventually set him against his brother’s company, a dominant player in the organised retail space. A property dispute between the families became a contentious issue when Shoppers Stop launched its IPO in 2004.
The family’s business origins can be traced back to 1956, when Lachmandas Raheja founded the K Raheja group with real estate as the mainstay. This group has since been split among his sons Gopal Raheja who owns K Raheja Constructions, Chandru Raheja of K Raheja Corp and Shoppers Stop and Suresh Raheja of K Raheja Universal.
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Shopper’s Stop keeps Rs 300 crore for expansion

January 21, 2010 By Leave a Comment

BSE listed retail chain Shopper’s Stop, promoted by K Raheja group, which currently operates 29 Shoppers Stops and 5 hypercity malls in the country has earmarked Rs 300 crore as its capex for the next 2-3 years to expand operations, a top company official said.

“We have a capex plan of Rs 250-300-crore for over the next 30-months for expanding our retail chains – Shoppers Stop and Hypercity,” Shoppers Stop’s vice-chairman, BS Nagesh, told reporters in Mumbai on Thursday.


“We plan to add 18 Shoppers Stop and 5 Hypercity stores over the next 30 months”, he said.

K Raheja was looking at raising up to Rs 350-crore through the QIP route and other means by March 2011 to fuel its expansion and raising its stake in Hypercity from present 19 per cent to 51 per cent.

Of the total amount, about Rs 30-crore has been raised through issue of preferential warrants in December 2009, he had earlier said.

With the addition of the new stores, the store count is expected to be 47 Shoppers Stops and 10 Hypercity by year 2013.

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Hypercity Launches 5th Store in Mumbai

January 15, 2010 By 1 Comment

HyperCITY Retail (I) Limited, yesterday launched its much awaited store at Big Thane Shopping Centre, Ghodbunder Road, Thane. After the successful launch of four stores; in Mumbai, Vashi, Jaipur & Hyderabad; HyperCITY Thane is the fifth store in India and third in Mumbai.


Commenting on the launch of the Thane store, Mr. B S Nagesh, Vice Chairman, HyperCITY Retail said, “HyperCITY Thane is another milestone in our effort to bring about a retail revolution in India. HyperCITY provided Mumbai its largest & second largest hypermarket with Malad & Vashi, and now Thane’s largest as well. With Thane, HyperCITY has now over 3 Lac sq. ft. of retail space in Mumbai alone. HyperCITY Thane will enable customers to discover the next level of shopping; whilst continuing to provide unmatched affordability, guaranteed quality and a choice of products and service.

HyperCITY Thane will also help customers save money by providing a “Free Bus Service”, which will pick & drop customers from their doorstep to HyperCITY & back. 2010 will see us launch more stores in Amritsar, and Bangalore.”

Spread across 1, 00,000 square feet of shopping area, the new HyperCITY store will provide Thaneites an international ambience where they can shop in comfort in a large, modern and exciting environment. HyperCITY Thane will carry a range of over 45,000 branded products catering to needs of the entire family.

Shoppers will have the option to choose from a wide array of products in every category ranging from Fresh Produce, Food & Grocery, Home Care Products, Electronics & Home Appliances, Home-ware, Furniture, Apparel and Accessories, Lifestyle Products, Footwear and much more. At HyperCITY, one can get a taste of a scrumptious selection of breads, gourmet meats, seafood and foods from all over the world.

At HyperCITY, customers can ‘discover’ something new and exciting every time they walk into the store. The furniture section offers a range of stylish and contemporary furniture for your home at great value. Fully fitted concept rooms offer home solutions and ideas to customers.

Sports enthusiast and health fitness conscious will find an exhaustive range of sports equipment from leading brands. With its wide selection of fashion clothing, accessories and footwear, HyperCITY offers everything that the customer needs to step out in style.

HyperCITY houses well-acclaimed international brands like Waitrose and Raleigh. The store has developed a suite of exclusive brands across all categories viz; Fresh Basket in Food, Ebano and Avorio in Home-ware, Maxit in Sports, Technix in Appliances, City, RiverInc in Fashion among others. They are available exclusively at HyperCITY which delivers increased value to customers by offering quality, uniqueness and price.

HyperCITY will provide ‘Free Bus Service’ to ferry interested customers free of charge from nearby residential societies in Thane to the store. The customers can avail of this Free Bus Service to the store for shopping and will be duly dropped back to the pickup point at set intervals of time, thus also contributing towards the eco-friendly initiative of ‘car pooling’ and helping the customers save money.

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