Twenty Four Seven eyes 10,000 stores, Rs 55K crore sales in five years

MUMBAI: Eleven years after he founded India’s first round-the-clock convenience store company — Twenty Four Seven Convenience Stores — Samir Modi, the youngest son

MUMBAI: Eleven years after he founded India’s first round-the-clock convenience store company — Twenty Four Seven Convenience Stores — Samir Modi, the youngest son of industrialist Krishan Kumar Modi, is setting himself an audacious target that he believes is “the future”.

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Modi wants to set up 10,000 Twenty Four Seven stores across the country — generating retail sales of about Rs 55,000 crore a year (average Rs 1.5 lakh sales per store per day) — in five years. This is a huge jump from just 49 stores (43 in Delhi and six in Chandigarh) that it operates at present.

But the target is achievable, said Modi. Most of the stores will be franchised—a new format that Modi is getting into. So far, the company only operated company-owned and managed outlets. Besides, the company already has an agreement with India’s largest fuel retailing chain Indian Oil Corporation (IOC) to open smaller stores at its petrol filling stations. IOC has about 24,000 petrol filling stations across the country.

Stores at fuel filling stations are smaller—about 500 square feet—unlike Twenty Four Seven Stores at high streets which are spread over 1,000-2,000 sq. ft.

Over next five years, Modi said, the company will require to invest about ₹2,000 crore in Twenty Four Seven, as he is getting into cost-and-revenue sharing franchising model for fast expansion.

The decision to expand the convenience store chain is not a sudden but a well-thought out one. Modi had, in 2013, hired a five-member team from Japan as consultants for Twenty Four Seven. The team, headed by Mura Matsu, had earlier advised the Tokyo-based Seven Eleven Japan on process, systems and operations to run the convenience stores under the popular 7-Eleven brand.

According to Modi, there is demand for round-the-clock shopping, be it in emergency or a hop-in option or for impulse shopping, primarily because of the rise in double-income households, busy professionals and youth seeking instant gratification.

Twenty Four Seven, so far, remained a small business for the Group. In the year to March 2016, its revenue stood at ₹170 crore and Modi hopes to end the current fiscal with Rs 230 crore sales.

Twenty Four Seven’s competes with In & Out, stores managed by state-owned Bharat Petroleum that operates more than 12,000 fuel filling stations. It runs 157 In & Out stores.

“A retail business built around convenience stores is a good business model. No company has a national presence in convenience stores. Twenty Four Seven needs to capture markets faster than anyone else does,” said equity analyst Sachin Bobade.