Industry Insight Indian Food Retailing

5. MAJOR PLAYERS
There is variety of retailers operating in the food retailing sector. This is not surprising considering the enormous size of the market for food. However, traditional types of retailers, who operate small single outlet businesses mainly using family labour, dominate this sector. In comparison, supermarkets and other modern retail formats account for a minuscule proportion of food sales. This is because of the strong competitive strengths that traditional retailers possess. These include low operating costs and overheads, low margins, proximity to customers, long opening hours, and additional services to customers (such as home delivery). Nevertheless, supermarket sales expanded at a much higher rate than other retailers. This is because a greater number of higher income Indians prefers to shop at supermarkets due to convenience, higher standards of hygiene and also for the ambience. In the organised sector, these are the following major retailers:Existing players Apna Bazar Food Bazar Food world MTR foods Nilgiris Spencers retail Subhiksha Reliance fresh
Trinethra superretail

Emerging players Bharti retail

5.1 Apna Bazaar

Name of the market Name of parent group Year of formation Company information Apna Bazaar is aa consumer cooperative society with a customer base of over 12 lakh, concentrated in Wstern India especially in Mumbai, Thane and the neighbouring Konkan region including Goa. It claims that its the Apna Bazaar Consumer Awareness and Research Centre (CARC trust)

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biggest chain of supermarkets in India operating with more than 500 outlets throughout the Magarashtra state, selling more than 6,000 essential commodities. Though it has been mostly identified with middle class, now plans to cater to an upwardly mobile urban population. To get rid of all middle men involved in order to gain the crucial margin advantage, the Apna Bazaar pursue F2O Farmer to Outlet Policy. It aims to reach out to the farmers creating an exclusive supply chain that will stretch right from the farmer to our stores. In order to meet the exacting standards of cost-effectiveness and efficient service to consumers, Apna Bazaar and DWCRA come together to create DWCRA Apna Bazaar Super Market. It aims at creating direct/indirect employment to rural women, selling the products prepared and manufactured by the DWCRA women at all the State, National and International outlets, etc The plans include trimming and training the workforce, opening new outlets and focusing on the FMCG sector. The chain plans to remain open on all days of the week and this itself is expected to fetch about Rs 10 crore a year. Apna Bazaar plans to scale new heights by establishing strategic alliances, and consolidating its operations. It is working towards partnering with the Japanese Consumer Co-operative Union (JCCU) in areas of training the staff force, visual merchandising and setting up a co-operative food brand. Apna Bazaar is also foraying into co-branding exercises to offer value to its consumers. Apna Bazar also plans to sell `Apna Life', a Group Life insurance cover, to its customers, along with MetLife India Insurance. Apart from this, it has signed up a memorandum of understanding with SBI cards to issue co-branded credit cards. 6-1-67/1/3, 1st Floor, Apna Bhavan, Besides Ravindra Bharathi, Opp. DGP Office, Lakdikapul, Hyderabad 500004 Tel: +91-40-23233199, 23243376 Fax: +91-40-27719641 E-mail: info@apnabazaar.org Web: www.apnabazaar.org

Contact Information

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Markets Products category and services

Secunderabad, Hyderabad, Kurnool, Krishna, Guntur and Prakasam, etc It deals in 5,698 different products including, cereals, pulses, oils, spices, groceries, packaged foods, personal anc home care products, baby care products, plastics and rubber products, etc Apna Bazaar offers all items at less than MRP rates. Often promotional activities including discounts and offers (freebies) go on in the Apna Bazaar stores. Apna Bazaar plans to reach out to each and every mandal (1,100 mandals) in the AP state irrespective of size and any other parameters. It also plans for global expansion with the support of NRIs- recently the ETA (European Telugu Association) has assured Apna Bazaar its support in setting up Apna Bazaar outlets in their places.

Schemes and offers

Future expansion plan

5.2 Food bazaar

Name of the market Name of parent group Year of formation Company information Food Bazaar Future Group 2002 The Future group's flagship enterprise, Pantaloon Retail (India) Limited (PRIL), is India's leading retail company with a turnover of INR2.019 billion during 2005-06, and with a wider presence in most of retail segments. PRIL operates primarily through the Lifestyle and Value formats through multiple delivery mechanisms and lines of business. The company has about 331 stores in over 40 cities across the country, constituting 5m square feet of retail space. PRIL caters to the Value retailing segment through 66 Big Bazaar hypermarkets, 97 Food Bazaars and more than 5 Fashion Stations, and other delivery formats across the country as on Aug, 2007. Food Bazaars core concept is to create a blend of a typical Indian Bazaar and International supermarket atmosphere with the objective of giving the customer all the advantages of Quality, Range and Price associated with large

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format stores and also the comfort to See, Touch and Feel the products. Most of the food bazaars are located within Big Bazaar, however given their ability to bring in customers, they are part of every Pantaloon, Central and as standalone stores. A Food Bazaar stocks an average of 7000 SKUs. Contact information Pantaloon Retail (India) Limited Knowledge House, Shyam Nagar, Off Jogeshwari-Vikhroli Link Road Jogeshwari (East), Mumbai 400 060 Tel: +91 22-6644 2200 Fax: +91 22-6644 2222 Web: www.pantaloon.com Regional offices and branches Haryana (North zone), Mumbai (West Zone), Bangalore (South zone) and Kolkata (East zone). It has branches in all metroes and almost all Tier I, 2 cities in India. The following are the product sections in any of the Food Bazaar outletsFarm Fresh Food Bazaar has a Subji Mandi in Big Bazaar for daily fresh fruits & Vegetables that are sold loose at the lowest prices in the city. With its promise of daily fresh quality, cleanliness and Hygiene, the Farm Fresh section is the most popular section at Food Bazaar. Chill station A wide variety of dairy products, juices, aerated drinks & frozen foods ( Veg & non-veg) are available at the lowest prices in the city that are displayed in one of the best chill stations in the country. Golden harvest This section displays 20 varieties of cleaned rice, 5 varieties of wheat, all types of flours, dals and pulses, edible oils, spices, tea and coffee available at lowest prices in the city both as loose and pre-packaged, giving customers the choice. Hungry kya This division has a range of ready-to-eat products like biscuits, cookies, chocolates, chips, wafers, snacks and more.

Products category and services

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Few value added services available in Food Bazaar initiatives that will bring delight and convenience to customers are Live Chaaki-allows customers to buy fresh wheat and have it grounded before the customers and right in front of their eyes Live bakery Fresh juice centre Live diary- provides customers fresh milk and milk products Live kitchen- allows customers to buy fresh vegetables, get them chopped, cooked fully and partly. Loose coffee and tea sourced from some of the best gardens. Home made pickles in loose form Private label food products. Some of private label products are contributing up to 15% of its category revenue. For example, dals and pulses, ready mix masalas, tea, salt, basmati rice.

Schemes and offers

It offers regular promotions and special offers, round the year. During Independence Day, the company celebrates Maha Savings 3 days' during which it offers products across categories such as apparels, furniture, electronics, utensils and food products at the lowest possible prices, coupled with attractive promotional schemes. It offers co-branded credit cards like ICICI Bank Big Bazaar Silver Credit Card and ICICI Bank Big Bazaar Gold Credit Card, which help to earn points on use apart from their usage as ordinary credit card. It also offers Shakti Card for housewives.

Future expansion plan

Future Group plans to invest about INR4 billion in the next one year to expand its different retail chains. The number of Big Bazaar outlets will be increased from 50 to 100 by 2008 at an investment of INR1 billion, along with eight more stores of Hometown. Hometown is a new format of store, which caters to home and housing requirements.

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5.3 Food world

Name of company Parent group name Year of formation Contact person Contact Information Foodworld Supermarkets Limited Dairy Farm International 1996 Mr.Norman Yum Foodworld Supermarkets Private Limited* No. 740, Eswari Industrial Estate Gate No. 2, Hulimavu Bannerghatta Road Bangalore 560076 Tel : (91 80) 4110 9702 - 709 Fax : (91 80) 4110 9710 Predominatly in Bangalore and Hyderabad, The Dairy Farm Internationa which held 49% intertest in the foodworld chain of supermarkets, has retained 44 retail outlets after it put off the partnership with RPG group in 2005. Foodworld opened an additional nine supermarkets in India, bring the total to 55 outlets predominantly in the cities of Bangalore and Hyderabad. The year 2006 saw the chain embark on an extensive refurbishment programme which will continue through 2007. Apart from groceries and processed and packaged products, it is the first chain of supermarkets in India to offer fresh foods, which include fruits, vegetables, bakery etc. It also pioneered the Private Label development and now offers more than 150 different items under its eponymous label. This private label products constitutes about 22% of its retail business.

Branches Company Information

Products category

5.4 MTR Foods

Name of the market Name of parent group Year of formation Company information MTR foods MTR foods 1976

The MTR Group of Companies promoted by the family of MAIYAS took birth in the year 1924 with the commencement of a Restaurant in Bangalore. Later in 1976, MTR ventured into the business of retailing of groceries and other household general items by opening a Departmental Store. MTR first

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brought out packaged, processed food products. Subsequently, efforts were made to extend the distribution of the above products to few other prominent Retail Stores in Bangalore, such as Nilgiris, Vijaya Bakery, Shivananda Stores, and Home Needs etc. The response was found to be very encouraging in terms of sales of the above products. Consequently, a major step with respect to marketing was taken by the Group in the year 1983. It was during 1983 that MTR appointed Distributors in Bangalore, Madras, Hyderabad and Vijayawada with a view to capturing business opportunities in the said markets.
MTR has managed to increase its export of ready-to-eat food products from two to six products in 2006, and also sell them in the competitive Japanese market. Five of its products are preparations of paneeer. MTR is able to sell only paneer preparations in the Japanese market because it is similar to their soya chunks. The packaging and presentation of the product is different; two hundred cartons are packed in a pallet, which is shrunk wrapped and then stretch wrapped. Though, Japanese market has stringent regulatory compliances, MTR has always adhered to quality practises, and has thus now managed entry with the same packaging into Hong Kong, China and will be shortly shipping its range to Korea. Its other export destinations are US, Europe, Australia, New Zealand and Gulf countries. Companys export sales constitute 10-12% of its turnover. MTR Foods Ltd. #4, 17th Cross KR Road BSK 2nd stage Bangalore - 560070 Ph: 080 26760569. Email:ramanathan.r@mtrfoods.com Bangalore, Kolkata, Mumbai and New Delhi Ready-to-eat curries and rice, ready-to-cook gravies, frozen foods, ice cream, instant snack and dessert mixes, spices and a variety of accompaniments like pickles and papads, etc

Contact Information

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5.5 The Nilgiris

Name of the market Name of parent group Year of formation Company information The Nilgiris Nilgiri Dairy Farm Ltd. 1905 Nilgiris is a supermarket chain in South India, known for its good quality products and selfservice shopping experience. It is also one of the oldest supermarket chains in India with origins dating back to 1905 and hence its products are sold under the brand name of "Nilgiris 1905". Also, unlike almost all other supermarkets and grocery shops in India, Nilgiris sells its own products among other brands. From a small shop in 1905, soon "The Nilgiri Dairy Farm Ltd." was established. The Nilgiri Dairy Farm Ltd. specialized in dairy, dairy products, bakery and chocolates. The founder Muthusamy's son Chenniappan expanded the company by setting up a modest store in Bangalore to sell Nilgiris' own products. Eventually, it evolved into a supermarket when Chenniappan visited the U.S. and Europe and was influenced by the old supermarket concept in the west. This chain has now blossomed to cover a vast region in South India with 26 outlets and annual sales of about Rs.230 crore. The chain is planning to open an additional 30 outlets in their next phase of expansion. Nilgiri's is setting up two new bakery formats, Masala Bread, a mass market bakery chain and Blue Oven offering premium range of breads and patisseries. Masala Bread offers about 400 SKUs, including packaged and open products and would essentially target customers of `local bakeries.' The retailer is planning to go for aggressive promotion of Masala Bread and would open 30-40 outlets in the next one year across South India. Blue Oven would be promoted in a phased manner (about five-six outlets in 2007), as the premium foods segment is still a growing market in the country. Both the chains would source products from companyowned local bakeries. Nilgiri's is also promoting a chilled foods section in its retail outlets, called the Nilgiri's Chef's Range, the product category has Indian, Chinese and Continental recipes.

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Nilgiris is in the process of setting up and enhancing its distribution and satellite centres in the four States. The chain, while undertaking direct distribution of its milk and dairy products, is also looking to increase the presence of its Nilgiris brand of bakery and dairy products in other stores, apart from being retailed through the Nilgiris chain. Nilgiris supply chain strategy is unique. They procure products from the local markets and also overseas. They import different products from different countries like soya milk imported from Thailand, honey from New Zealand, sauces, chickpea, and green pea from the US, etc. Wheat is procured from local dealers in Punjab. Hence it could sustain a viable supply chain and ensure continuous availability to its customers. The only reason for the extensive efforts on the supply chain is to provide choice and varieties to its customers. The Nilgiri Dairy Farm Limited 171, Brigade Road, Banglore-560001. Tel.:+91-80-5588401 Fax : +91-80-5585348 Email:nilgiris@mcdnet.ems.vsnl.net.in Bangalore, Chennai, Coimbatore, Pondicherry, Guntur, Vishakapatnam, Vijayawada and Pune It deals in diary, confectionary, chilled/frozen packaged food products, etc Nilgiris is planning to increase its store network strength to 500 from the present 40 stores by 2010 through an investment of Rs 120 crore. The chain also plans to increase the The plan is also to increase the private label presence to at least 40% of shelf space in all the stores from the current 20% to earn better margins. In September/October 2006, Actis, a UK-based private equity investor, invested US$65 million and bought more than 51% stake in the Nilgiris Group, in order to strengthen the group's manufacturing and franchising operations in South India.

Contact Information

Markets Products category and services Future expansion plan

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5.6 Spencers Retail

Name of the market Name of parent group Year of formation Company information Spencer's retail (Spencers daily and spncers fresh) RPG Group 2001 One of Indias largest industrial conglomerates, RPG Enterprises comprises more than 20 companies spanning across seven business sectorsRetail, Technology, Entertainment, Power, Transmission, Tyres and Specialties. The retail division comprises Spencers Retail, Music World and Spencers, contributing around 11% to RPG groups revenue. Its retail division operates in five formats Spencers Hyper, Spencers Super, Spencers Express, Spencers Daily and Spencers Fresh. Spencer's has a total of 135 outlets in 27 cities across the country during FY2007. These include nine hypermarkets, five Spencer's Superstores, 104 Daily stores, two Fresh stores and 15 Express stores. Spencer has decided to reanme 49 of its 93 Foodworld outlets it has retained after breaking ties with Dairy Farm International (DFI) as 'Spencer's Daily.' Spencer's Fresh will keep all fresh products such as vegetables, milk, bread and eggs. Contact Information Spencer's Retail, Duncan House, 1st Floor, 31, Netaji Subhas Road, Kolkata - 700001 Tel: +91-33-44115600 Fax: +91-33-22318767 Web: www.spencersretail.com Markets Chennai, Ahmedabad, Hyderabad, Vishakhapatnam, Delhi, Gurgaon, Mumbai, Ghaziabad and Kolkata, etc Products: Fresh fruits and vegetable, groceries, grains and cereals, baked chilled and frozen foods, personal care and baby care products, home care products, office and home stationery, apparel and fashion accessories, electrical and electronics, music, toys and other entertainment. It offers regular promotions and special offers, round the year. This includes prices off and in

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addition to the low prices being offered. These offers are across the entire range of products and offer great savings on a number of leading brands, basic staples and fresh foods like vegetables. Future expansion plan As part of its national rollout plan, Spencer's plans to set up a total of 2,000 stores by 2009 and 4,000 stores by 2011.

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5.7 Subhishka
Name of the market Name of parent group Year of formation Company information

Subhishka Subhishka group

1997 Subhiksha is a Chennai-based retail food and pharmacy chain prinmalrily operating in Sourthern states. This discount retail chain, arguably climed the largest retailer in the country, has 780 stores across nine States. Subhiksha stores sell household items and medicines at significant discount to normal prices. Each of Subhiksha's store is 2,000 sft in size and mainly stocks Vegetables, fruits, Groceries. Some stores have added FMCG and OTC medicines. The company also offers its goods via home delivery but has recently closed down its internet business due to a decline in sales. Subhiksha supermarket and pharmacy is on an expansion mode. The group is looking at extending operations in Karnataka and also venturing into neighbouring markets of Maharashtra, Andhra Pradesh and Gujarat. It has 35 stores in Bangalore and will touch 60 by end of 2007 further consolidationg its position in TamilNadu, Karnataka, Gujarat and Andhra Pradesh.

Contact Information Markets

NA Chennai, Bangalore, Coimbatore, mysore, Secunderabad, Hyderabad, Trivandrum, Cochin, etc Cereals, pulses, dry and wet grociers, packaged foods, personal anc home care products, baby care products, plastics and rubber products, etc Subhiksha has planned an ambitious Rs 300 crores expansion across various states (Hyderabad, Bangalore, Ahmedabad, NCR of Delhi, Western UP, Chandigarh, Punjab, Haryana, Mumbai, Pune and Nasik) in India. It plans to expand its retail stores to 1,2000 by 2007-08. Subikasha currently has 520 stores which makes it the largest retailer in India today.

Products category and services Schemes and offers Future expansion plan

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5.8 Reliance Fresh

Name of the market Name of parent group Year of formation Company information

Reliance fresh Reliance

2006 The Reliance Group is India's largest private sector enterprise, with businesses in the energy and materials value chain. The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles and retail. In 2006, Reliance entered into retailing to provide a world-class shopping environment, state-of-the-art technology, a seamless supply chain infrastructure, a host of unique valueadded services and above all, unmatched customer experience. Its INR250 billion retail project will be operated through Reliance Retail Limited and its subsidiaries Ranger Farms Private Limited, Retail Concepts and Services Private Limited, Reliance Retail Insurance Broking Limited, Reliance Dairy Foods Limited, Reliance Retail Finance Limited and RESQ Limited. It entered the retail sector with its Reliance Fresh chain of grocery stores and operates about 169 Fresh stores in the country. Its main focus is on retail formats of vegetables stores, supermarkets and hypermarkets. Reliance Industries Limited Makers Chambers - IV, Nariman Point, Mumbai 400 021. Tel : 91-22-2278 5000 Web: www.ril.com/ Chennai, Bangalore, Hyderabad, Delhi, Lucknow, Mumbai, Gurgoan, etc Cereals, pulses, dry and wet grociers, packaged foods, personal anc home care products, baby care products, fruits and vegetables, etc A customer loyalty programme is run in all the fresh outlets. Every purchase carries some points, wchih can be accumulated and exchanged for products.

Contact Information

Markets Products category and services Schemes and offers

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Future expansion plan

It is planning to open 250 Reliance Fresh outlets by February/March, 2008 in cities like Pune, Bangalore, Hyderabad and Mumbai, and in some cities in Gujarat. It also plans to start home delivery services for its Fresh outlets within a range of one to three km very soon, in order to get the advantage currently the mom-n-pop stores have.

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5.9 Trinethra superretail

Name of the market Name of parent group Year of formation Company information Trinethra superretail Aditya Birla Group 1986 Trinethra Superretail Limited is one of the leading supermarket and convenience chain of retail outlets with around 225 stores under the Trinethra and Fabmall brands. Its operations span across the four states of Andhra Pradesh, Tamil Nadu, Karnataka and Kerala. Trinethra has around 2500 employees and enjoys a strong consumer franchise in all the states in which it operates. Trienthra has earlier acquired Fabmall Indias 12 grocery retail stores and the merged company plans to enter the hypermarkets format nationally. Both of them share a common warehouse for groceries and are to position the group as a leading multi-channel retailer; with a physical presence via Fabmall/Trinethra. The web based would be through Fabmall.com and also via the telephone. The online retailer has entered into a strategic alliance with two US based sites Indiaplaza.com and Sulekha.com to leverage its sourcing expertise and the large catalogue of items further. During January, 2007, Aditya Birla Retail, the unlisted retail arm of the diversified Birla group, has acquired Trinethra Superretail and its online shopping outfit Fabmall. It marks the formal entry of Birlas in to Indian retail industry. Contact Information Markets NA Chennai, Bangalore, Trivandrum, Cochin, Hyderabad, Secunderabad, Vizag, Vijaywada and Guntur, etc Products: Fresh fruits and vegetable, groceries, grains and cereals, personal care and baby care products, home care products, etc Trinethra, now under the Umberlla of Birla group, is focussed on the expansion of the chain in the West, North and East will be under the new brand and eventually Trinethra's 225 stores, which are predominantly in the South, will be rebranded. The group has set itself target to

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open 20-25 stores in each city that it enters. The group's hypermarket venture will be on course by 2008; it already has one in Mysore, set up by Trinethra before the acquisition.

Emerging players 5.10 Bharti Retail

Name of the market Name of parent group Year of formation Company information 2006 Bharti Enterprises is one of Indias leading business groups with interests in telecom, agribusiness, insurance and retail. Bharti Retail (Pvt) Limited, which is a wholly-owned subsidiary of Bharti Enterprises, plans to provide a world-class retailing experience to consumers across India towards which the company has planned an investment of USD22.5 billion by 2015. Bharti Retail will launch its retail outlets in multiple consumer-friendly formats, which will include Hypermarkets and Supermarkets. For the small store format, Bharti Retail is also looking at partnering with existing local store owners across India through a franchise model. The back-end operational support from this retail initiative is provided by Wal-Mart in areas of logistics and supply chain management. Contact Information Bharti Enterprise, Qutab Amibience (at Qutab Minar), Mehrauli Road, New Delhi - 110 030 Tel. No.: +91 11 4166 6000 Fax No.: +91 11 4166 6011/12 Web: www.bharti.com Products category and services The products include all food and grocery categories, fresh fruits and vegetables, meat and poultry, dairy products, staples, FMCG and processed foods, electronics and appliances, clothing and footwear, furniture and furnishing, Bharti Retail Bharti Enterprises

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and other household articles. Future expansion plan With its USD2-2.5 billion pan-India operations retail initiative, Bharti Retail is looking at approximately 10m sq ft of retail experience across all cities in India with a population of over one million. It plans to employ 60,000 people in the project.

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