Don’t be surprised if nostalgic customers walk in and garland the store manager at Spencer’s at Chennai’s CP Ramaswamy Road on Monday. This store, once known as Foodworld, is celebrating 20 years and represents the country’s first stab at organised and modern retail, now projected to almost double to $1trillion by 2020. May 9 will henceforth be celebrated as Supermarket Founding Day in India, says Pradipta Mohapatra, then Managing Director of Spencer’s, an RPG group enterprise. (RPG and partner Dairy Farm of Hong Kong parted ways in 2005 and the chain was renamed Spencer’s. Foodworld is a Dairy Farm brand.)
Mohapatra recalls: “RPG was keen on retailing. We ruled out electronic goods; margins were low and there was evolved competition even then. Garments and fashion were out. The manufacturers/brand owners controlled the supply chain. There was a big gap in food/grocery, with the exception of Nilgiri’s, not yet a chain store. We knew value would come from aggregating large volumes and a stable supply chain.”
Typically then,
Consumers wanted all this but didn’t want to pay even a rupee’s premium above the kirana . Foodworld then decided that every day at least 50 SKUs — items bought in bulk or frequently, rice, potatoes, detergent — would be far cheaper than any kirana , comparable to wholesale prices. “And with that, we were in business.”
(With inputs from Vinay Kamath)