My Dollar Store (MDS), the US-based single-price point retail chain, may go in for a multiple or dual pricing strategy, after the stake sale of Sankalp Retail Value Stores.
KOLKATA: My Dollar Store (MDS), the US-based single-price point retail chain, may go in for a multiple or dual pricing strategy, after the stake sale of Sankalp Retail Value Stores (SRVS), its master franchisee, to Future Capital.
Future Capital has picked up about 28% in SRVS and, post the stake-sale, MDS will enter the Big Bazaar stores through a shop-in-shop format where multiple price points could be a possibility.
It is learnt that the product mix and inventory management of MDS are being overhauled to boost profit margins. Big Bazaar, on is part, obviously, sees huge opportunities in the discount retail space.
However, it is learnt, the standalone My Dollar Stores would stick to their single-pricing strategy. At present, there are 47 standalone MDS outlets with 10-15 slated to be added by March 2008.
Kishore Biyani, the Future Group CEO, declined to comment on this, saying, “I don’t know. We are just the investors.”
Soumitra Ghatak, CEO, My Dollar Store, was unavailable for comments. According to an industry source, in the multi-pricing scenario, an MDS will follow any modern retail format — keeping imported brands that have aspirational value. Top ends of health and beauty products from the US are also likely to be stocked.
Currently, all the products are 100% imported, a policy that will remain unchanged. The stores within Big Bazaar are likely to range from 1,500-2000 sq ft. Standalone stores average 2000 sq ft.
My Dollar Stores are discount outlets, with a single price point of Rs99 in India. Products range from food, health and beauty, cookware, bath, stationery, toys, etc.
However, though the franchisee model was hugely successful for MDS in the US, in India, this business model stumbled somewhat, resulting in brand dilution.
MDS had to decide to considerably change the way it did business in India, opting to own its stores. Also, unlike in the US, where MDS targets the lower end of the SEC profile, in India, it attempted to target a more upscale consumerbase with imported merchandise.
The stakesale to Future Capital is a strategic move for Sankalp Retail Stores. Said an industry analyst: “The stake sale to Future Capital offers MDS more acceptability in the real estate space.
m_madhumita@dnaindia.net
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