SUBHIKSHA RETAIL

SUBHIKSHA PRODUCTS
FMCG
Grocery
Pharmacy
Mobile Products
F&V

STORE PROGRESSION
1997- 1st Store @ Chennai 4.5 lac
1st year-10 stores in chennai
2000 expanded 50 stores in chennai
Next 2 yrs- 120-130 stores across TN

2004-2005 Decided to open 420 stores in

MH,KA,GUJ,Delhi
2006-1000 Stores in india with telephone
business in its stores
2006-Nokia became big in size compared to HUL
2008- Supermarket + Pharmacy & telecom

TARGET MARKET OF SUBHIKSHA

Middle lower class & not higher end customer

To match it operated on EDLP & locates stores
more closer to the customer

INDIRANAGAR-BANGALORE STORE
Operating Aug 2006
Location Surrounded by
Dept stores
Supermarkets
Restaurants
Banks
Fast food chains
Gas Stations

Operated on 15 yr lease contract(renewable)

Remodeled its property(Total 2000 Sq ft)

150

Telecom & Pharmacy

200 Backroom office & store
1650 -Supermarket

SALES
Pharmacy -3lacs
Mobile 60 to 80 lacs/month (Low margin)
Grocery & F&V 3 lacs
FMCH- 10-12 lacs

PHARMACY BUSINESS
Target Customers on continous teraphy like
cardiac,Diabetics etc
Managed by two people

TELECOM BUSINESS
Target Market Youth
Offered Handsets,Accessories,Recharge cards
Low SKUs
Manage by two people

SUPERMARKET
Sales Branded & Unbranded (Private lables)
FMCG & Grocery in addition to F&V
Space allocation -30% space allowed to F&V
70% to FMCG & Grocery
products

Location Residential area with few commercial

properties
It was unlike other stores where customer ned to
drive to store
Store focused on customers in neighborhood
,hence no parking space
Stores were on street side (Low rental) (SCA)

Competitor Food

More

world

Kirana

Stores

Operated in 1 KM radius

Demographics 1Km catchment was having

2000 households
Households Three consumption units spent on
average 4000/Month
Influence on sales-Time of the day

WEATHER
FESTIVALS

CATEGORY MANAGEMENT
Stoked 1200 SKUs
Coverage -90% Basket value
Product line Depth Top three brands under
each category
This allowed ROM Lower inventory

Offer Discounts 8 to 10 %

Stocked SKUs Fast Moving to generate

consistent and considerable volumes
Implication of not storing requ SKUs

SKUS BREAK UP
FMCG- 950 Brands & Private labels
Grocery -150 Brands & Private labels
Importance of private labels(Tatwa,Aaharam,SBIK)

More

Margin+ Low prices(Eg wheat)

MARKETING
MRP comparison
Std discount of 8 to 10 %
Comparison over display
Comparison over billing
Prices of FMCG set at central office except
grocery in contrast to Wal-Mart
Time of promotion 1st 10 days

MEDIA PLAN
Ads through local radio radio mirchi
No ads through local newspaper& catalog
Tv ads minimal for supermarket
Except during commencement of new operation
Relied more on WOM
Low ad spends

THE CREW
Store timing -9 to 10 pm
No of people

13 -2 caheries,2 CSR,2 Home delievry +sales assitant

Job resposibility
Work during Peak Periods Vs Non Peak
Attrition was also an issue (low avalibilituy of
skilled manpower)

MANAGEMENT
ROM 2 People in shift
Responsibility

Managing

category sales
Increasing customer intercation
Maintaining store hygiene
Managing Personal
F&V wastage
Adhering to planogram

FINANCIALS
Invest in inventory, Operating cost like wages, rental,
electricity & security centrally gov
ROM- Increase Profitability by improving category sales
Reducing F&V wastage & Shrinkage

INDIRA NAGAR BRANCH

FINANCIALS
Fixed cost ---- total 1-2 lacs
Inventory 6lacs worth
Target-gross margins were much lower than
other retailers hence high sales is imperative

Rent

40K
Wages 60K
Electricity-10K
Security cost- 1000

ORGANIZATION STRUCTURE
SBU responsible for operations (Store
Warehouse)
Sourcing policy - economies of scale

Centralized

fn(s) - except F&V & few local brands

However reported to centralized team
Eg-FMCG Negatiated annual terms of trade coz of
sheer scale ,hence significat discount
Lead to expertise in spurcing food grains

CUSTOMER SERVICE
Industrial engineering techniques were used to
std & reduce the billing time
F&V pre packed (onions)
Bar code technology

Internal target were given to send customer out

after 5 min of selecting and billing.
This challenge was addressed by time and motion
study hence found 2 stage process
Order over phone & home delivery

THE RETAIL MGMNT DECISION

PROCESS

Section

UNDERSTANDING THE WORLD OF RETAILING

SECTION 1

Retail Managers need to know the environment in

which they operate before they can develop &
implement effective strategies.

The critical environment factors are

Macro Environment
Technological
Social
Micro Environment
Competitors
Customers

DEVELOPING A RETAIL STRATEGY

SECTION II
Retail Strategy indicates how the firm plans to
focus its resources to accomplish its objectives
It identifies

Target

Market
Nature of merchandise & services
Long term advantage over its competitors

E g Wal-Mart Vs Circuit city

IMPLEMENTING THE RETAIL

STRATEGY

To implement a retail strategy, management

develops a retail mix that satisfies the needs of
its target market better than of it competitors

RETAIL MIX

Retail Mix is the decision variables retailers use to

satisfy customer & influence their purchase
decision
Customer Service

Store Design
and Display

Retail
Strategy

Pricing

Merchandise
Assortment

Location
Communication