BLITZKRIEGby

DINESH KUMAR. MMAHESH KUMAR. RKARTHICK. RRAJESWARI.KKRISHNAVENI. A

KIRANA SHOPS

SUPER MARKETS

HISTORY OF SUPERMARKETS 1930: Michael Cullen opens the first

supermarket in Queens, N.Y., and names it King Kullen.

1958: The aluminum can is first used as a food container.

1988: Wal-Mart opens its first supercenter in Washington.

Khadi & Village Industries Commission 1980 -Textiles sector with companies like

Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains

1990- Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books

1996 – May first retail store in chennai was inaugurated by M.S. Subbulakshmi.

TYPES OF RETAILING

URBAN PLANNING

ANALYZE COMPARE PURCHASE

SEARCH COMPROMISE PURCHASE

SWOT ANALYSIS - SUPERMARKETSSTRENGTHS

♥ More choice, Brands Variety, quality, Attractive .♥Customer can calculate the money before buying♥Packaging, attractive shopping bags .♥ All in one place.OPPORTUNITIES♥ More retail outlets.♥To grow as the hypermarkets

WEAKNESSo Costly.oBilling time is comparatively high.o More brands are available so the customers confused.o Security.o Stock keeping is difficult.THREATSo The retail shops are mostly have rented space rented space , the rents are now increasing.o The upcoming organized kirana shops.oDifferences in consumer buying behavior and taxation laws. o“customer-pull” environment .

SWOT ANALYSIS - KIRANA SHOPS

STRENGTHS♥ Optimal cost♥ Bargain (vegetables & some groceries)♥Easy to access ♥Quick delivery♥Own retail spacingOPPORTUNITIES♥ Expand as an organized supermarkets♥Can have tie up with the all the supermarkets and have an local brand – quality controlled.♥25 stores in Delhi under the banner of Provision mart are joining hands to combine monthly buying. Bombay Bazaar and Efoodmart formed which are aggregations of Kirana.

WEAKNESSo Less Varieties ( Colgate salt, neem, total)o No option for selection.o customer to employee is 8 : 2o Private Labels – customer are reluctant to buyTHREATSo Supermarkets and hypermarkets within 2 km of radius.o Stocking of products is reduced to the sales which further affect sales.

SURVEY

CUSTOMERCUSTOMER SUPER SUPER MARKETMARKET

KIRANAKIRANA

INCOMMING INCOMMING RATERATE 5050 2020

NEW NEW CUSTOMERSCUSTOMERS 2525 44

FREQUENT FREQUENT CUSTOMERSCUSTOMERS 1010 88

LOYAL LOYAL CUSTOMERSCUSTOMERS 55 55

BUSINESS MODEL OF AN RETAIL SUPERMARKET

Consumer proposition• Food World -“Great shopping experience without a price

penalty”, Subhiksha’s -“No-frills shopping at best prices”.

Reliance Fresh and More-“Value for money, wide range, in a very good ambience”.

Overriding the theme “price “Use of technology

• SKUs (stock keeping units) , barcodes The technical terminology for this is “shelf edge sticker”.

• Management of shelf edge stickers lead to efficient management of stock turns, seamless management or supply chain from suppliers to warehouse.

Supply chain management• Supermarket chains are sourcing their grains and pulses

as well as fruits and vegetables from the wholesale markets.

• Sourcing products directly from farmers.Private labels

• Private labels other than pulses and grains are still stuck at a low single digit percentage of revenue.

• Significant improvement in the general merchandising range both in depth and quality.

Employment and training • During the first flush of retailing, companies were serious

and diligent about training of their frontline service staff. • The turnover of frontline staff as indeed supervisory staff

in the retail industry is far higher than even the IT industry. Supermarkets, therefore, have given short shift to training of frontline staff.

PRODUCT SUPER MARKET

KIRANA SHOPS

Ponni rice(20 Kg)

475 520

Onion 25 28

PRICE

KiranaThey don’t promote

in an usual way but they deliver the goods below MRP for the frequent customers

They do door delivery and take orders even through phone.

They do give products on credit basics

PROMOTION STRATEGIES

SupermarketsProvide gift vouchers – bring

more customers

Provide offers for frequent customers

Advertise in local channels , Newspapers

PRODUCTS

SUPERMARKETEARLIER SUPERMARKET 08’

Retail shop- 4000 sq ftMonthly revenue – 40 lakhRevenue /sq. ft- 1000 RsRent- 20 /sq.ftUtilities -10 Rs/sq.ftSalary- Rs. 25 sq.ft

Including all the charges ( intrest, warehousing revenue is 15.5 %)

But the kirana’s are working at 12% margin

Revenue is at 700 Sq.ftRent – 50 Rs. Sq.ftSalary – Rs. 30 Sq.ft

This is due t the fact that the revenue is gone up by 7 % but the rent and the power spending has gone up by 6% and 2%. Which results in the drop in the revenue

Impact on Unorganized Retailers

There is some decline in employment in the North and West regions which, however, also weakens over time.

The rate of closure of unorganized retail shops in gross terms is found to be 4.2 per cent per annum which is much lower than the international rate of closure of small businesses.

The rate of closure on account of competition from organized retail is lower still at 1.7 per cent per annum.

A majority of unorganized retailers is keen to stay in the business and compete, while also wanting the next generation to continue likewise.

Small retailers have been extending more credit to attract and retain customers.

However, only 12 per cent of unorganized retailers have access to institutional credit and 37 per cent felt the need for better access to commercial bank credit.

Most unorganized retailers are committed to remaining independent and barely 10 per cent preferred to become franchisees of organized retailers.

The premier packaging institute of the country is chalking out a cluster branding strategy, which could help the thousands of kirana shop owners of the country to counter the organized mega-retailers such as Big Baazar, Bharti Wal-Mart or Reliance Retail