Malls are not a sustainable model for grocery stores: Nakul Yadav, Le Marche

In an exclusive interview with Indian Retailer Nakul Yadav of  Le Marche, explains why malls generate higher revenue but malls are not a sustainable model for a grocery store.

Can you tell us about your brand's journey till today and about any milestone you have achieved so far?

Basically, we have 2 brands. We started off with 'Sugar n Spice' in 1989 and we tied up with Oberoi's. In 1994, we split up with Oberoi's and we were allowed to keep the brand. We opened up our own bakery in Gurgaon. In 2005, we opened our first Le Marche store. In the meanwhile, we have had 10-12 'Sugar n Spice' outlets, so we closed them down and we opened Le Marche in Vasant Vihar in 2005.

In 2006, we opened up two express outlets in Gurgaon and in 2009 we opened up in DLF Mall. We started them in Saket and Vasant Kunj as well. In 2010, we set up two outlets in Gurgaon again - one was MGF and one was South Point Mall. In 2013, we started one in Chhatarpur. In 2014, we have started another outlet in City Centre in Gurgaon. We open two stores every year and keep on sorting down stores that are not profit centres. Currently, we have six stores - three in Delhi and three in Gurgaon.

What kind of a consumption pattern you observe in your region? What kinds of products are popular amongst the customers?

The consumption pattern keeps on changing because our customers keep on travelling abroad. They keep on seeing new products and expect those products on our shelves as well. Our forte is cheese and bakery is our strongest part. As of now, we have the largest variety of Pringles, olive oils etc. We have largest variety of cheese too.

What are your real estate choices when it comes to running retail business in North India? Do malls earn greater revenue per square feet or it is the high street outlets that give you good returns?

I prefer high streets as compared to malls. Malls do generate higher revenue but malls are not a sustainable model for a store like ours - grocery store. Grocery stores have to be accessible. People shouldn't think twice before entering into one. In malls, you will start by parking your cars. On high street, customers can just park their cars outside a shop to enter.

Which one of your stores is the best in business?

We have an outlet in Khan Market, and then we have another outlet in Galleria in Vasant Vihar. These are the high street ones and they earn pretty nice revenue per sq feet as compared to the rest. The best selling store is in South Point mall, Gurgaon. It is actually the largest store as it covers an area of 25,000 sq ft. All these malls do have higher revenue but they have higher expenses as well. Higher rentals, electricity and maintenance charges etc are too high. Malls charge you 1.2 times of the actual electricity and maintenance charges.

What kind of growth opportunity you see in your area of operation? How has been the response, so far, to your brand?

We started off at a very good time and the response of people has been amazing. The customer footfall has been increasing day by day. There are more apartments are being built and there are more people coming in. More people are now aware about the product. We experiment with the food we offer and the people have responded positively to that experiment. We make them taste all the products.

We will be opening up two more stores around Delhi-NCR next financial year. The Delhi market hasn't been captured yet. So, we are not expanding to other places right now. We haven't decided the location, but we know we have to open up a store in Central Delhi and another one near it. The area has to have the genre of people we want to frequent our stores.