Which are the core markets that Spencer’s has focused on since it moved out of the joint venture with Dairy Farm International Holdings in 2006?
During the time of joint venture with Food World, we were just a Chennai centric brand. But, after the split we have become popular in other states as well, which includes West Bengal, Eastern UP, Haryana and Madhya Pradesh. In fact, today we are present in more than 16 cities and are planning to increase that number by the end of this fiscal.
You have been focusing a lot on creating private labels. Isn’t it difficult to make your presence felt in categories where an external established brand is already present?
In a marketplace there are both national as well as regional brands. And I think this is where the private labels come into picture. They fill in the gap between the two. While they offer a better quality than the regional brands, the price at which they come is much lower that what national brands charge. Though the challenge to establish a private label is always there, branding it solves that problem. In fact, our first private label, Smart Choice, is very popular among customers today. Further, we are in the process of creating more brands which include Tasty Wonder, Brooms, Living Smart, et al, in categories that range from corn flakes to laptop bags.
Don’t you think you have missed out big time in cities like Delhi?
The pre-slowdown era was a time when every retailer expanded aggressively and we too were no exception. However, we learnt few lessons during the process when we had to pay huge rental cost with the rise in real-estate prices. In fact, our stores in Delhi where not able to cope up with it and as such post-recession we thought it’s feasible to invest in core-geographical areas where we can easily reach the breakeven.
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Source : IIPM Editorial, 2011.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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