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Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Chief Consulting Editor's Desk
Rajita Chaudhuri
A.Sandeep Editor’s Desk
A.Sandeep
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ďFDI will never be a threat to usĒ
In an exclusive conversation with 4Ps B&M, Sanjay Gupta, VP - General Merchandise, Spencerís Retail, talks about how they plan to grab a bigger market share through private labels
 
Which are the core markets that Spencerís has focused on since it moved out of the joint venture with Dairy Farm International Holdings in 2006?
During the time of joint venture with Food World, we were just a Chennai centric brand. But, after the split we have become popular in other states as well, which includes West Bengal, Eastern UP, Haryana and Madhya Pradesh. In fact, today we are present in more than 16 cities and are planning to increase that number by the end of this fiscal.

You have been focusing a lot on creating private labels. Isnít it difficult to make your presence felt in categories where an external established brand is already present?
In a marketplace there are both national as well as regional brands. And I think this is where the private labels come into picture. They fill in the gap between the two. While they offer a better quality than the regional brands, the price at which they come is much lower that what national brands charge. Though the challenge to establish a private label is always there, branding it solves that problem. In fact, our first private label, Smart Choice, is very popular among customers today. Further, we are in the process of creating more brands which include Tasty Wonder, Brooms, Living Smart, et al, in categories that range from corn flakes to laptop bags.

Donít you think you have missed out big time in cities like Delhi?
The pre-slowdown era was a time when every retailer expanded aggressively and we too were no exception. However, we learnt few lessons during the process when we had to pay huge rental cost with the rise in real-estate prices. In fact, our stores in Delhi where not able to cope up with it and as such post-recession we thought itís feasible to invest in core-geographical areas where we can easily reach the breakeven.

Five things that Spencerís needs to focus on if it wants to get back on track and turn profitableÖ
First of all we need to maintain a sensible growth. Secondly, cost-management should be our prime focus. Third, we need to maintain the same store growth on a year-on-year basis. Next, we need to increase margins by 1.2 basis points, and lastly, supply chain needs to be in proper shape. I donít think coming in of FDI will ever be a threat to us.

What are your future plans?
We should be of course a profitable retail company with a retail presence of 3.5 million sq. feet across the country. At cumulative store level we have already reached the breakeven and in another two years we would be reaching breakeven at the company level as well. We would also focus on more tie ups with foreign players.

 

Angshuman Paul           
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