IRF 2010 Regional Retail Conclave
This breakfast session on the 29th was anchored by Amit Bagaria, Chairman & CEO of Asipac Group. Panellists included Samir Sahni of Ritu Wears (NCR), Darpan Kapoor of Kapsons (Punjab), Manohar Chatlani of Favourite Shop Group (Bangalore), Dinesh Talera of Mysore Saree Udyog (Bangalore), Bhagirath Jalan of Jalans (Varanasi), Sushanto Dey of Sreeleathers (Kolkata), Sandeep Agarwal of Ratnadeep Supermarkets (Hyderabad) and Shambav Chauhan of Supreemo Fashions (Ahmedabad).
Bagaria opened the session by asking when a retailer is not regional anymore, but could be considered national, and would Sreeleathers and Nalli be considered regional or national? The general consensus was that a retailer could be considered national when more than 25% of its revenues starts coming from outside of its home region.
In India, regional airlines have mostly failed and collapsed and many regional hospital chains have been acquired by national chains, so why do regional retailers not just survive, but thrive? asked Amit Bagaria. This led to a robust discussion on customer differences and nuances across regions in India. One of the interesting anecdotes related by Sahni of Ritu Wears was that while pink was preferred as a colour in some cities, it does not sell in others. Chauhan agreed and added that the same was the case with black. Dey commented that, at Sreeleathers’ MRP of Rs.100, no one was really bothered about colour.
Next, Bagaria picked on the topic of buying property v/s renting and on high street locations v/s malls. Dey said that malls were too costly for Sreeleathers. Kapoor of Kapsons said that buying properties affects one’s capital base and no one has unlimited capital, hence taking properties on rent is a good option. He further added that Kapsons was now actively signing up for spaces in malls. Chatlani agreed with Kapoor and added that malls give you footfalls from day one, especially in new locations, whereas it takes much longer to build up footfalls at a high street location. Bagaria reminded the panellists and the audience that, for several years, McDonald’s only bought property in the USA, is today the world’s single largest owner of property in the private sector and, in the last 11 years, McDonald’s improved its domestic USA profits by selling old properties.
The panel discussion then moved on to the hiring policies of regional retailers and whether preference was given to people from the same community as the owner of the business. Most of the panellists were of the belief that the staff should be from the same region as the location of the shop, so while Sreeleathers hires Bengali staff in West Bengal, in Chennai they manage with mostly Tamilians. Sahni and Kapoor conferred with this.
The next topic discussed at the regional retailers conclave was the issue of discounting – whether regional retailers tend to offer more ad-hoc discounts than national players. Bagaria clarified that he was not referring to EOS sales or promotional schemes, but on-the-spot discounts given to buyers on an ad hoc basis. Dey said that Sreeleathers does not give any discounts on their products and that they donate any products which have manufacturing defects. Chatlani commented that they give discounts only on their first store on Bangalore’s Commercial Street, but not on any of their other 14 stores; he further added that they were considering withdrawing discounts even at their first store. Talera said that Mysore Saree Udyog had never discounted in their history.
Agarwal of Ratnadeep commented that it was difficult to get good software for billing, accounting and inventory management. Some of the others said it was not a problem for them. IRF 2010 Chairman Bijou Kurien, who joined the conclave as a guest, said that, as the business grows, one has to upgrade the software also.
On the question of whether growth should be through own stores or franchising, the panel was divided. While Sreeleathers has already been franchising for several years, others felt that it may not be easy to trust people who they did not know for a long time. Favourite Shop Group is also considering franchising.
Sahni of Ritu Wears commented that when a retailer grows from a standalone store to a multi-location chain, HR and managing people becomes the major challenge. Kapoor of Kapsons added that one has to think of the staff’s future al the time, if the business stops growing, key employees will individually stop growing and may leave the organization.
On the final topic of whether buying was more important than selling in the retail business, Kapoor felt that the three most important things in retail is merchandising, sales and the cash counter. Chatlani of Favourite Shop Group commented that one should always plan buying properly, and that selling in modern retail is more organized. Bijou Kurien added that both buying and selling are an integral part of retailing.
Bagaria opened the session by asking when a retailer is not regional anymore, but could be considered national, and would Sreeleathers and Nalli be considered regional or national? The general consensus was that a retailer could be considered national when more than 25% of its revenues starts coming from outside of its home region.
In India, regional airlines have mostly failed and collapsed and many regional hospital chains have been acquired by national chains, so why do regional retailers not just survive, but thrive? asked Amit Bagaria. This led to a robust discussion on customer differences and nuances across regions in India. One of the interesting anecdotes related by Sahni of Ritu Wears was that while pink was preferred as a colour in some cities, it does not sell in others. Chauhan agreed and added that the same was the case with black. Dey commented that, at Sreeleathers’ MRP of Rs.100, no one was really bothered about colour.
Next, Bagaria picked on the topic of buying property v/s renting and on high street locations v/s malls. Dey said that malls were too costly for Sreeleathers. Kapoor of Kapsons said that buying properties affects one’s capital base and no one has unlimited capital, hence taking properties on rent is a good option. He further added that Kapsons was now actively signing up for spaces in malls. Chatlani agreed with Kapoor and added that malls give you footfalls from day one, especially in new locations, whereas it takes much longer to build up footfalls at a high street location. Bagaria reminded the panellists and the audience that, for several years, McDonald’s only bought property in the USA, is today the world’s single largest owner of property in the private sector and, in the last 11 years, McDonald’s improved its domestic USA profits by selling old properties.
The panel discussion then moved on to the hiring policies of regional retailers and whether preference was given to people from the same community as the owner of the business. Most of the panellists were of the belief that the staff should be from the same region as the location of the shop, so while Sreeleathers hires Bengali staff in West Bengal, in Chennai they manage with mostly Tamilians. Sahni and Kapoor conferred with this.
The next topic discussed at the regional retailers conclave was the issue of discounting – whether regional retailers tend to offer more ad-hoc discounts than national players. Bagaria clarified that he was not referring to EOS sales or promotional schemes, but on-the-spot discounts given to buyers on an ad hoc basis. Dey said that Sreeleathers does not give any discounts on their products and that they donate any products which have manufacturing defects. Chatlani commented that they give discounts only on their first store on Bangalore’s Commercial Street, but not on any of their other 14 stores; he further added that they were considering withdrawing discounts even at their first store. Talera said that Mysore Saree Udyog had never discounted in their history.
Agarwal of Ratnadeep commented that it was difficult to get good software for billing, accounting and inventory management. Some of the others said it was not a problem for them. IRF 2010 Chairman Bijou Kurien, who joined the conclave as a guest, said that, as the business grows, one has to upgrade the software also.
On the question of whether growth should be through own stores or franchising, the panel was divided. While Sreeleathers has already been franchising for several years, others felt that it may not be easy to trust people who they did not know for a long time. Favourite Shop Group is also considering franchising.
Sahni of Ritu Wears commented that when a retailer grows from a standalone store to a multi-location chain, HR and managing people becomes the major challenge. Kapoor of Kapsons added that one has to think of the staff’s future al the time, if the business stops growing, key employees will individually stop growing and may leave the organization.
On the final topic of whether buying was more important than selling in the retail business, Kapoor felt that the three most important things in retail is merchandising, sales and the cash counter. Chatlani of Favourite Shop Group commented that one should always plan buying properly, and that selling in modern retail is more organized. Bijou Kurien added that both buying and selling are an integral part of retailing.
Express your opinion and have your say regarding the IRF conference agenda and speaking opportunities. Please contact: info@indiaretailforum.in
Exhibition Areas
