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‘We have our own mechanism to control prices’

Noel Tata, Managing Director of retail major Trent and Ratan Tata’s half-brother, shares his experiences and strategies for the retail business in an exclusive interview with Indulal PM.
Hindustan Times | By Indulal PM
UPDATED ON JUL 08, 2008 08:33 PM IST

Noel Tata, Managing Director of retail major Trent and Ratan Tata’s half-brother, believes in doing things quietly. Though he was the first to capitalise on the opportunities in the retail sector as early as 1997, Trent chose to expand operations in a controlled manner unlike its contemporaries. Tata, 50, has reasons to take a different view on the retail business. He shares his experiences and strategies for the retail business in an exclusive interview with Indulal PM.

Why did you choose to go for a cautious expansion strategy?

Over the years, we have been preparing the strategy for our retail business. You need to enter carefully and have to create a brand to become successful. In the last three years, we have been doing our homework. We could create a distinction in our lifestyle chain, Westside. The same success story would be replicated in Star Bazaar as well. The focus is clear and we have firmed up our strategy and segregated our retail initiatives into different categories.

You recently hived off Star Bazaar as a separate entity. What would be the strategic advantage of this?

The strategy is aimed at providing more focus to each of our business verticals. Under Trent, we have Westside, a lifestyle chain, books and Landmark music and books shop along with Star Bazaar, which is a hypermarket. Once Star Bazaar becomes a subsidiary it will get more flexibility in its operations. We have already announced a Rs 2,000 crore investment plan in Star Bazaar. Of course, I think, we are expanding our business at the right time.

Your expansion plans have come at a time when inflation is hovering above 11 per cent. How do you manage to control prices at your discount stores?

Inflation may have gone up, but we have our own mechanism to control prices. We have the authority to control the prices of our private brands. As a result, the apparel prices have not increased at all. Price increase in all the branded items will happen everywhere. So, we are not an exception. Overall, our prices are competitive.

What about your plans to tie-up with foreign brands? How will this help in developing your brand profile and expand your business?

We are in talks with at least three international brands. Currently, we operate the Sisely stores in India. Our strategy is to bring in the best available brands for our customers. Global brand access will definitely boost our sales. The tie-up with Sisely will help us to gain a strong footprint in the premium segment. We continue to scout for such opportunities, which will definitely create a distinction between our competitors and us.

Do you face problems in attracting the right kind of talent?

The rate of attrition is very high across the retail industry. It’s difficult to stand 8-10 hours a day inside a store, receiving your customers. There is a real crunch and we are scouting for talented people. We are employing 250-300 people each in our Star Bazaars.

What measures have you taken to overcome talent crunch?

We provide intense training to our employees. This helps them to improve their prospects. For most people, a job like this in the retail industry is just a beginning. Those who leave will also carry forward the Tata brand and the quality of training that we provide here.

Has the delay in property development affected your business?

The developmental delay is another reason for our slow down in expansion. The Star Bazaar in Andheri has 75,000 sq ft area and our future stores will be of same size. This is a big responsibility and the developmental delays are really worrying us.

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