Spencer’s plans a real big box

For name sake, ‘supermarkets’ abound in the country, but world class, full-fledged, sprawling hypermarkets, like the ones in advanced countries that offer the universe, are yet to debut in India.  RPG group-led Spencer’s Retail is set to change that, at least in a certain sense.

“In select hypermarkets, we will expand our offerings on the service side, bringing them closer to what is actually offered in the West, in terms of the wide range of products and services,” says Mohit Kampani, CEO of Spencer’s Retail.

Apart from food, apparel and other goods, Spencer’s will offer an array of services like florist, pharmacy, in-store cafe, barber shop, laundry and so on.

Kampani plans to make that list of services longer with small bookstores and quick service restaurants to trigger impulsive purchases among consumers.

Spencer’s Kolkata branch will lead the pack, to be followed by similar hypermarkets elsewhere.
While in-store cafe and bakery have by now become integral to some new-age supermarkets, other offerings like electronics, car accessories and jewellery are slowly making the scene exciting.

But in terms of space, they are still small to be called hypermarkets. Typically, a Western hypermarket  takes up between 1 lakh square feet and 2.6 lakh sq feet. But Spencer’s ‘hypermarkets’ will be spread over just 29,000 square feet.

Spencer’s is aware size does matter, but, in a country where huge urban commercial spaces are hard to come by, it plans to focus on chain expansion instead. So, 56 new Spencer’s marts will open in the next three years.

Andhra Pradesh, Tamil Nadu, Karnataka, West Bengal, Delhi NCR, Uttar Pradesh and Maharashtra are among the states that will host Spencer’s hypermarkets.

Besides state capitals and major cities, Spencer’s will foray into Tier-II and Tier-III towns. Kampani links this move to high double-digit same-store sales growth of some stores in non-metros. (Same-store sales growth refers to sales logged by a retailer’s existing stores during a certain period vis-a-vis the corresponding period a year ago.)

Spencer’s will sharpen focus on private label (or in-house) brands which now account for only 15% of its sales. “The target is 25-30%,” says Kampani.

Private label brands, he says, give hypermarkets control over pricing, which is important in a regime of maximum retail price or MRP. “We are looking at extending our private label brand to frozen foods, bakers and so on.”