SPAR, the world's largest independent food retail chain spread across 33 countries, unveiled its first hypermarket in the capital, perhaps New Delhi's biggest, spread over 74000 sq. ft on a single floor. Max Hypermarkets India Pvt. Ltd. (part of the Dubai based Landmark Group) has a licence agreement with SPAR International to open SPAR stores in India. On the sidelines of the launch event, Viney Singh, MD, Max Hypermarket India talked to Adeetya Singh of this new venture.
Aadeetya Sriram (AS):Tell us about your first venture in the northern side of the country? What sort of market share are you expecting Spar to attain considering the competition that is already there?
Viney Singh(VS): We have just started out with our venture in Delhi. The market base that we expect is the upper-middle class segment, because the quality of infrastructure is critical for our format. Things like ceiling heights, ground width provides convenience to the whole shopping experience for the consumers. The competitions we face give us the advantage to analyze their progress and looking into it we make sure we don’t make those same mistakes.
AS: Why did you choose Subash Nagar?
VS: See, west Delhi has one of the best catchments, by way of infrastructure, parking space (up to 1600 cars) and the kind of space available to us over here that is around 74,000 sq.ft that enables us to have the whole shop on the same floor. We see tremendous potential over here, and a mall like this is ideal for our venture.
AS: Will there be a difference in the kind of merchandising you will be providing in the North to that in the South?
VS: We maintain very strict standards of merchandising, safety, hygiene and service levels; and those remain the same everywhere we go. But the merchandising and concepts differ from store-to-store. Depending on the catchment and the availability of importance to the local catchment, we make the required changes.
AS: What sort of marketing strategy have you planned to adopt in the North?
VS : See our marketing strategy for the customers revolve around “ Four pillars” of Spar, and these are , freshness of products, the range of choice , value and the service. We optimize these pillars, this is a common philosophy for Spar as a brand everywhere, and we try to build word of mouth, which we will do on Saturday. We will have promotional calendars etc.
AS: Do you plan to adopt different schemes for your products?
VS: We have the “Every Day Low Price”, a Spar international pricing system, where basically we select certain fast-moving, daily-use items and we price them at the lowest retail price in the city. They comprise of a large part of the consumer purchase. We also have promotions like Best Deal Prices. We also have Loyalty Program, where we have cards, which you can use in any of the selective Landmark ventures for all brands; it’s called the Inner Circle Card. You can carry this card and shop in 4 different stores.
AS: What sort of growth have you attained in South all these years?
VS: In South, we opened our stores 3 yrs ago; the kind of response and growth we have attained down there has been healthy. We plan to scale up to the other regions as well. The food penetration in the country is 4%, the food and supplies is about 1%, so we feel that is just the initiation of the kind of growth and development we aim to achieve in the North as well.
VS: Do you see yourself as a competitor to the brands like Big Bazaar or want to establish yourself as a premium hypermarket?
AS: See, with the kind of pricing we have implemented, I don’t think they are very much from the existing hypermarkets, our priority is customer experience, which is very international and represents value. Otherwise, talking about competitors, there aren’t many, you can count them down on your hands.
AS: Do you plan to have an ambassador for your brand?
VS: We don’t really feel the need for an ambassador; our player is the store itself, and the kind of performance the store attains will determine the kind of response we expect to receive.
AS: What are your future plans in the country?
VS: The overall plans are to have around 30 stores by the year 2013, all large format stores. Current revenue is about Rs 300 cr but we expect to reach 700 by next then 1200 cr. All our stores have achieved cash break even. We plan to have another store in Gurgaon soon. We have a standalone store in Bengaluru, and plan many more in the near future.