Shiny Provision Stores - Own Notes

Shiny Provision Stores Current:

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Shiny Provision Store in Bangalore

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Owner: Madhavan Anandan Running the food and grocery store for several years

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Traditional managing and market based skills

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Old Kirana type store

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Modern retail outlets threatening the store

Action taken:

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Asked one of customer who was a market research

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She decided to research and develop a strategy on how a small grocery store can survive in a sophisticated and professional professional environment

India:

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The country’s diversity leads to many marketing and retail challenges

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Majority of the households (Eighty Million) earn below US$1584

Differing consumer segments with different lifestyles, incomes i ncomes etc. 72% population in villages but Urban India accounts for 64% of consumption

India Retailing Scenario:

History -

Vedas considered trading to be the pillar of society

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Indian traders among the first to acquire retailing skills

Retail Formats -

Fairs: annually conducted, conducted, thousands of people from surrounding areas, areas, retailers sold goods such as clothes, ornaments, spices etc.

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Shandies: weekly markets organized on particular day, retailers and farmers sold their

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goods, high bargaining Village shopkeepers: individual merchants who sold items door to door, prevalent in v illages Public Distribution shops: govt. run chain that ensured availability of food grains to the poor at affordable prices

Growth of Retailing: Retailing:

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1947: poverty, necessity based retailing

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1950: 0.25 million retail outlets only

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1960: not a single supermarket 1978: only 2.335 million retail outlets stocking FMCGs

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1997: 5.55 shops per 1000 people

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2005: 10.51 shops per 1000 people

Kirana Stores: -

25 to 400 sq feet Wide range of products for daily requirements of masses Offerings with limited Stock Keeping Units (SKU)

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Kept branded as well as lower priced & inferior unbranded products

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Food & grocery primarily Food & grocery market in India valued at US$236 billion in 2008. Contributed to 60% of retail sales and comprised of mostly unorganized sector

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Unorganized sector created employment for nearly 39.5 Million people i.e. 9.2 percent of  population

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80% outlets run by individuals or their family members Existed in local neighbourhoods unlike the modern retailing outlets

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India had 15 Million kirana shops

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Retailer had informal interaction and could even influence the purchase decision. This had significant implications for consumer’s perception of modern retailing vs. Kirana shops

Modern Retailing Formats:

Modern/organized: -

Retail outlet chain, professionally managed, transparency in accounting, organized supply chain, centralized quality control

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Expected to reach $30 billion by 2010 up from $14 billion.

Unorganized: -

Operated locally by any single owner, lacking technical and accounting standardization, includes kirana stores

Modern Retails Formats: -

Supermarkets: food and household products Department Stores: lifestyle driven

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Hypermarkets/Discount stores: large volume driven, discount based

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Specialized/Category Killers stores: extensive range under single category

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Factory Outlets: out of vogue, discounted prices

Kirana Shops vs. Modern Retails Outlets -

Objective to analyse modern retail outlets vs. Kirana outlets Analyze the strategy of kirana stores which can also be utilized by modern retails outlets