FDI in retail will improve whole supply chain: Gordon Campbell

Dr Gordon Campbell, managing director of SPAR International, a voluntary chain that brings wholesalers and retailers together in nearly 33 countries, had looked to India as an emerging market even as he drew up his firm’s plan for 2010.

India is now an important site of growth for the firm, Campbell tells DNA

Foreign direct investment (FDI) in multi-brand retailing is a matter of debate in India. How would things change for you if it is allowed?
It would not affect us. Our development in India is through the Dubai-based Landmark Group. (SPAR is in India through a licensing agreement with Landmark)

In general, though, we favour FDI in retail as further investment by international retailers, particularly in the back-of-house operations, would help improve the supply chain and reduce wastage.

Are you looking at sourcing products from India for other markets?
We are looking at buying rice from India for some European markets. That is a possibility.

Why would you import rice from here?
One, because India has a wider variety of rice. As business grows, we would be buying in large quantities and able to get very good prices. We do that in Europe with products like olive oil, which we source from Italy.

How has recession changed the retail business in Western markets?
People have to eat, so the food business is somewhat protected. However, there are changes in what people eat and how they buy. Promotions and private labels have become important. People are buying the necessities.

They are not buying as much on impulse. Also, people are shopping from more stores. This has made our business very competitive, and we have become price aggressive.

How important are private labels in India for you?
In the non-food section, there are lots of private labels. Our food labels are now well under way and will increase very significantly over the next 12 months.

In a market like India, we expect private labels to pick up once consumers realise they offer value at much cheaper prices in comparison to branded products. Our non-food labels are priced 50% below branded products. In food, the saving is 25-30% when consumers go for private labels.

Your ‘Winning Strategies’ plan  includes growing through acquisitions; will you take this  route in India too?
No, the Indian market is not yet saturated, unlike Western Europe.
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