Mauled by competition from modern-format malls, the traditional kirana stores are now fighting back.
Ahmedabad grocers rebranded as Super Value Stores to woo mall-o-holics with freebies.
AHMEDABAD: Mauled by competition from modern-format malls, the traditional kirana stores are now fighting back. And helping them in this endeavour is none other than Hindustan Lever Ltd (HLL), the country’s largest fast-moving consumer goods (FMCG) major. HLL has tied up with nearly 175 neighbourhood grocery stores in Ahmedabad to convert them into “Super Value Stores” (SVS), offering products loaded with freebies.
What brings kirana stores and HLL together is a common enemy. While glitzy malls have enticed customers away from traditional kirana stores, they have also undercut FMCG giants with low-price store labels. This has robbed kirana stores of volumes and FMCG majors of margins.
The key to this unusual partnership between elephant and ant is common branding, lower prices, higher discounts and special promotional offers that are exclusive to Super Value Stores. Under the deal worked out by HLL, kirana stores that opt to rebrand themselves as SVSs get an additional 3% commission on monthly sales. Plus, there are promotional offers that are available nowhere else. An HLL spokesperson told DNA Money: “SVS is the first and pioneering programme through which the company and trade have developed a win-win partnership.”
Sample this: Currently on offer is a free hair dryer worth Rs 175 for every Rs 200 worth of HLL shampoos bought. Only SVS distributors get this scheme. Based on the response, HLL reckons that it can use such lures across a range of more than 500 different products in the cosmetics, fabric and personal wash, and food segments. HLL has also offered to install special cabinets in SVS stores for dispensing its products.
“There are many schemes and free gifts through which we are able to offer attractive schemes to loyal clientele who were drifting to malls,” says Ambalal Patel, an SVS shopowner in the Satellite area of Ahmedabad.
“The company has many products, which if combined with attractive schemes, can ensure a continuous flow of consumers,” adds Patel.
According to Patel, special schemes enable ordinary shopkeepers to earn an additional Rs 50-100 daily by selling HLL products.
Kirana stores have another USP when it comes to malls. While malls offer home delivery of goods provided the bill exceeds a certain minimum amount, kirana stores offer the same service for any bill size.
“We have retained some customers because we provide home delivery no matter what the bill. Additional service combined with better promotional packages should help us win back some of our lost customers,” says Prakash Purohit, another kirana shopowner of Ahmedabad.
To drum up business volumes, HLL is trying to create common branding for these stores, with boards painted in a tell-tale yellow colour (see picture). The company pays for the board, and the shopkeeper gains when customers start associating bargains with such stores. The company also pays shopkeepers extra (around Rs 200-300 a month) for display counters. The kirana owners, for their part, are trying to improve customer value by repackaging loose grain and other products in different packages. Purohit, for example, has started to supply grain in pack sizes from 200 gm to 1 kg.
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