The Future is in gourmet food
Kishore Biyani-led Future Group is poised to expand its newest business vertical, the large format gourmet store Food Hall, signalling a willingness to look beyond value formats. Rachit Vats reports.business Updated: Jun 10, 2012 20:28 IST
Kishore Biyani-led Future Group is poised to expand its newest business vertical, the large format gourmet store Food Hall, signalling a willingness to look beyond value formats.
The company plans to expand the store, which is envisaged as a chain, to key Indian cities after its more than satisfactory performance in Mumbai. Avni Biyani, the younger daughter of Future Group founder and head Kishore Biyani, is at the helm of the premium food chain. She said the Food Hall’s 15,000 sq ft flagship store in Mumbai is likely to break even soon.
She said the company plans to roll out larg flagship stores with numerous smaller satellite stores around them.
“We are working on having two models running. The idea is to have one main flagship large format Food Hall store and a couple of more satellite Food Hall stores around it,” she told HT. “We are taking time to evolve the concept and ensure each store becomes profitable on time.”
Future Group opened its second Food Hall, all of 30,000 sq ft, in Bangalore last month. It plans to open 10 large stores in key cities, with the satellite stores averaging 2,000-3,000 sq ft in size.
Biyani said the company is still analysing how many satellite stores a flagship Food Hall store can command.
“This format is an expensive business to build, capex requirements are high. Nevertheless it is a great margin business, despite low intensity footfalls,” she said.
The company is looking at averaging a close to 25% margin for this gourmet format, which by Indian retailing standards is the highest. The retailer is planning to open a store in the Capital in six months.
“When we launched Food Hall we did not know which direction will it go — just a notch above Food Bazaar or as a completely new concept. Along the way we realised that there is a much finer palate for food than we initially imagined. The market is ready for the next level of offering,” Biyani said.
The gourmet format food store has a long way to go to catch up with value formats. Other players addressing a shift in consumer preferences and an attempt to tap it early on, include the Tatas’ WestSide, Godrej’s Nature Basket and Spencer’s.