‘Buy two bags of Kohinoor basmati rice and get a bag free,’ a sign screams out at me at Spencer’s, the hypermarket in Malad’s Inorbit Mall. With deals like this, hypermarkets in Mumbai are generating the kind of footfall that makes the local baniya tremble in dismay. From the humble jhadoo to racy lingerie, at a hypermarket every consumer need is just an aisle away.
“We buy in bulk from the distributors,” says Arun Kumar Das, Controller of Operations at Spencer’s. “A regular kirana would buy 100 kg of Surf a month, we buy a ton, so we can negotiate with the dealers to get massive discounts.” Das says on Sundays he gets 22,000 customers and 4,000 to 5,000 on a weekday. Spencer’s merchandisers generate a report on top-selling items and ensure they stock large quantities of those so they rarely run out.
Neville Noronha, the head of operations at D-Mart, says his stores attract consumers from all socio-economic classes. “Here, they have a lot of choices. They can take their time over the products they want to buy. It’s a hygenic, pleasant environment with soothing music playing in the background and you can touch and feel all your purchases,” he says.
D-Mart has seven stores in Mumbai and plans to open several others this year. Spencer’s is also opening branches in Thane and other parts of the suburbs while Big Bazaar has 18 outlets in India and seven in Mumbai. Nicholas David, the floor manager at Haiko in Powai sees tremendous scope for growth even in a small area like Powai. “Hiranandani constructs a new building, some with 35 floors, every year. Shoppers come from the new Raheja Complex at Chandivili and other housing complexes in the area,” he says. “Even though Haiko already existed and is just located 100 mts away, there is more than enough space for another hypermarket in Powai.”
{{/usCountry}}D-Mart has seven stores in Mumbai and plans to open several others this year. Spencer’s is also opening branches in Thane and other parts of the suburbs while Big Bazaar has 18 outlets in India and seven in Mumbai. Nicholas David, the floor manager at Haiko in Powai sees tremendous scope for growth even in a small area like Powai. “Hiranandani constructs a new building, some with 35 floors, every year. Shoppers come from the new Raheja Complex at Chandivili and other housing complexes in the area,” he says. “Even though Haiko already existed and is just located 100 mts away, there is more than enough space for another hypermarket in Powai.”
{{/usCountry}}With the hypermarkets doing home delivery within a 3 km radius and offering fantastic schemes, corner shop owners fear that they will be driven out of business. Says Bachhubhai Patel, owner of Bandra’s Patel Provisions, “I have run this shop for 40 years and was doing well till these hypermarkets came in. Now, we are fighting to survive. They have schemes and lots of space. Customers who used to come to us now even buy their atta and Phenol from there. They prefer having everything under one roof.” Bachhubhai is trying to fight back by renovating his entire shop with aisles. He says the only way he can survive is by giving free home delivery even for a pen.
However, Spencer’s Das doesn’t think that hypermarkets pose a threat to corner shops. “I don’t think the kirana will ever die. They are just a phone call away, they offer you credit, you can settle your account at the end of the month. Indians are just getting used to the concept of self-service at supermarkets,” he says.
Sandeep Adhotrao, a customer care executive at the Hiranandani-owned Haiko supermarket in Powai, says he sees customers come in to buy one product and end up spending much more because of special schemes and deals being offered. Spencer’s also runs a promo on Wednesdays called Hara Bhara Wednesday, providing huge discounts on fresh fruits and vegetables. Haiko offers a free laundry bag with a bag of Surf Excel. Big Bazaar has gone even further and offers a lifetime ICICI-Big Bazaar credit card, that gives you a Rs 250 voucher to shop at Big Bazaar. They also throw in a kilo of free sugar every month for a year once you sign up.
The lure of cheaper prices is one of the primary reasons that hypermarkets are booming. Prices are marked much below MRP. A five kilo bottle of Sweekar oil with an MRP of Rs 370 is sold at Rs 309 at Haiko and at Rs 294 at D-Mart Kandivli.
Interior designer Anupama Bharadwaj, 36, says she shops at D-Mart in Khandivili as the discounts at a hypermarket mean 7-10 percent savings per product. Another attraction is the cleanliness. “The grains are packaged so well that you don’t have to clean it before you cook,” she says. She also enjoys the convenience of paying by card. Bharadwaj notes that there is a trendiness attached to shopping at a hypermarket and a lot of young working couples prefer to shop there.
With so many players in the market and additional players coming in, is the market about to get saturated? Das thinks so. He says, “While the consumer will benefit from the variety of hypermarkets coming up, I think the market will saturate in the next two years.” However, Sanjeev Agarwal, the head of marketing at Pantaloon Retail (under which Big Bazaar falls), disagrees. “I don’t think the market will get saturated, it will however be down to who can connect best with the customer and offer them the best deals,” he says.
With a rapidly emerging consumer base for hypermarkets, the new dollar stores that have begun to dot the metro are also booming. Ajoy Krishnamurti, CEO of Dollar Stores, says, “India is a great market for anything driven by value.” He points out that single price point stores like the dollar stores in India that sell each product for Rs 99, have been a roaring success. They complement hypermarkets and even abroad are located right near Walmart or K-Mart. Big Bazaar at Phoenix Mills has a Dollar Store right next to it. In 2003, Sankalp Retail Value Stores tied up with the American Dollar Store as a master franchiser and launched three stores in India, in Mulund, Goregaon and Phoenix Mills. They have since launched 16 stores across the country in cities. The Dollar Stores also enjoy economies of scale and hence are able to bring a variety of American-style products at very cheap prices to the consumer. They retail jalapeno pepper, shower gels and foreign chocolates. Krishnamurti hopes to open 35 new stores by next year and doesn’t believe the huge supermarkets will swallow the small baniya. He says, he has seen some of the baniya shops change beyond recognition since the hypermarkets came in. They have even got aisles and fancy displays. Their shops look well-lit and clean.
“I think the kirana will adapt and modify, but will never go out of business,” he says.