The Canteen Stores Department, CSD as it is commonly referred to, was created to provide 'easy access to quality products of daily use, at prices less than market rates' to the soldiers, ex-servicemen and their families. CSD is not commercial driven venture, it is purely run for the welfare of ‘Jawan’(soldier ). Today CSD is one of the largest retail chains with exiting footprint of over 4000 outlets. It has given a tough competition to organize trade due to its competitive pricing. In an exclusive conversation with Air Vice Marshal M Baladitya, VSM GM, CSD sheds lights CSD operations.
Kindly shed light on overall operations of CSD including its beginning and journey so far?
Canteen store department started in 1921, initially; it was constituted to supply goods to British Army. Thereafter, in 1948 when India became independent, CSD India was formed and it was head quartered in Bombay. Subsequently, CSD Pakistan was head quartered in Karachi.
We started with a small turnover of 48 lakhs in 1948 and today our turnover stands at 17,000 cr. This is been our growth story. We have more than two thousand people working under the CSD cadre. We deal with 600 business partners including suppliers and vendors. We have more than 4000 unit run canteens (URCs) which are spread across whole country. And, we reach over supplies through 44 depots which are located across the country. Depots are warehouses from where goods are transmitted to its aligned CSD. Each of these depots have 100 to 120 dependent canteens which come every month to collect the goods from the depots and go back and sell it through canteens.
How CSD is differentiated from existing retail chains in this country?
We are the pioneers of retail in this country. When we started, organized retail chains were not even in existence. We are the pioneers and largest by the miles as far as retail chain is concerned. The major difference is, they work for profit and we work for welfare. We are not profit oriented organization, so when it come to setting up my canteen or setting up my depot, I do not look at profit at all because my primary concern is to reach across to my final customer who is ‘Jawan’ fighting for the nation on the border. So, where it is required we have to open the canteens and depot even if they are not profitable.
We have a very fixed system, we only recover our handling and operational cost. Thereafter, we look at a minimal profit percentage which is also done for the welfare of troops. We sell the item at best possible price, so that is how we differentiate from rest of the retail chains operating in this country.
Moreover, there is no retail chain which can compete with us in the area of quality control. The kind of quality control we do especially in food and liquor items before introducing is unprecedented to current retail industry. We are associated with many national accredited labs.
‘Low pricing’ is the USP of CSD. How you manage to get discounts?
We are one of the largest consumers as far as FMCGs and most of the other categories are concerned in the whole industry. When we deal with the companies, and the negotiation take place, the leverage we get nobody can match-up in terms of share numbers. As the welfare measure, we are the only ones to who finance ministry give tax rebate. In the new GST regime also, we are exempted 50% CGST- SGST that is being put on each item in all categories in which we operate.
CSD may run by the third party vendor as well?
No, it is a corporative that we run for our ‘jawans’. Canteens are only set up for the armed forces, it is not meant for others. It is being headed by armed forces and it is run only for armed force personnel.
Which are the major brands with whom you work with? Also shed light on product range?
We work with the top brands in the country including Nestle, P&G, Uniliver, Adidas, Cadbury. We have divided our portfolio into six groups including toiletry and cosmetics, household including electronic appliances, footwear and luggage, wrist watches, liquor, food and stationary.
Are you also working with any international premium label which otherwise not available to Indian masses especially in liquor category?
No, I don’t work with international brands directly. But, if some Indian company importing scotch and selling we do deal with them.
Where you have seen maximum traction across all your product folio? Also, how soon you upgrade your product range?
FMCG sees the maximum traction. We try to upgrade our product range as and when it is possible. Companies we work with invest hefty amount in research and development, so whenever they are coming up with any new line we also try to introduce it at same time.
How you ensure hassle free shopping experience for ‘Jawans’?
There are many projects which are still under pipeline. We are trying to go online by the end of this year at least for the white goods category of the items. We are upgrading our complete technology; in fact, in the next three-four months there would be many upgradations will take place in whole systems. We are trying to bring in a lot of automation and transparency into our system. We are committed to provide the best shopping experience to customers when they step-in to URC.
At last, what are the plans to increase the reach of CSD?
We have customer base of about 12 million. We are not looking to increase canteens numbers as such because we are already spread across the country. We are already getting healthy footfalls prompting long queues. We are hopeful that long queues will be shorten once our online platform will be operational.