| From the Editor's Desk |  | |
Private label: Can retailers have their cake and eat it too?
Two news reports today suggest two very interesting trends. On the one hand FMCG brands are increasing the margin they provide to organized retailers so they can increase their shelf space vis-a-vis private labels. This is acknowledging the power of these private brands in the retail stores. Now, on the other hand, retailers are increasing prices of some of their private brands to be almost the same as the national brands. This is happening in categories like ketchups and soups. Are retailers killing the goose that laid the golden eggs here? In the absence of any outright branding or marketing, the primary reason consumers drift towards private label is lower price. Also, one can assume that national brands such as Kelloggs and Kissan have higher capabilities in quality, product innovation and packaging. None of the retailers in India today command a brand loyalty like a Tesco in the UK, which has multiple price-point private label offerings in the same category. Till that time, retailers are advised to be careful in increasing the prices of their private label offerings in categories where strong national brands exist.
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| At a Glance | |  |
| News: Apparel, Specialty, CDIT ... | | |
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Nearly 150 retail outlets of big chains such as Spencers, More and Reliance dot the landscape of Chennai's suburbs - giving sleepless nights to small traders who were hoping that supermarkets were just an urban phenomenon. These chains have already started eating into the retail market in the suburbs, the street vendors being the worst hit. Finding themselves pushed to the wall, the small traders, fearing that entry of foreign companies into retail could wipe away whatever little business they are left with, have joined hands and sent 1.47 lakh telegrams to Prime Minister Manmohan Singh over the last fortnight, urging him to bar foreign investment in retail trade. |
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No need to pack that extra suitcase for your Paris vacation. Luxury design house Christian Dior has finally opened its doors in Mumbai, at the Taj Mahal Palace Hotel. Housed in the same wing as regulars like Louis Vuitton and Moschino, the store has a selection of garments, bags, shoes, sunglasses and watches, along with a few pieces of jewellery from the current Autumn-Winter collection. Brand representative for India, Kalyani Chawla says, "We finally found a place that suited us and we're very excited." |
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The retail chain, Hypercity launched its maiden store here, the first in Madhya Pradesh. "The Hypercity Retail India Limited, which has launched this store at DB City here is the first store in Madhya Pradesh with a product line-up of nearly 45,000 items," Head, Buying, Merchandising and supply chain, Mr Ashutosh Chakradeo said. After Bhopal, the company has plans to set up another Hypercity at Indore, he said. |
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 | Mothercare is planning to open more stores overseas where strong performance is helping it to offset a tougher UK market. The company, which has recently opened its 50th store in India, said it will launch at least 150 international outlets in the financial year, 50 more than its previous target. It has identified emerging markets such as China and India as important growth areas after creating joint ventures with local groups. |
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Reliance Trends is focusing on SEC B and C customers who comprise a third of the market. So, half of the 20 new stores the chain is setting up by March 2010 will come up in tier two and three cities. The chain's metro versus smaller cities ratio is 60:40 now; by March next year, it will change to 50:50. The chain, which runs 30 stores at present, wants to grow it four-fold to 120 by March. "The idea is to have stores in areas which do not have much retail presence," Sirdeshmukh says. The chain already has stores in cities such as Ranchi, Guntur, Belgaum, Patiala among others. |
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Mandhana Industries Ltd, an integrated textile and garment manufacturing company is all set to take the franchise route to expand its presence pan-India. The company is looking at opening 300-400 stores across the nation in the next four years. These will be a mix of company owned and franchised outlets, confirms Manish Mandhana, MD, Mandhana Industries Ltd. The company also has plans to launch 10 flagship stores in the next six months in the major metro cities. These will be company owned and company operated stores. |
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After the successful launch of its two stores in Delhi, Godrej Nature's Basket, the gourmet retail chain, plans to launch another store in the city on October 21, 2010 in Greater Kailash I. In the near future, the Godrej Nature's Basket plans to launch another store in NCR region, and going forward with their expansion plans, it will foray into other metros such as Pune, Bangalore and Hyderabad. The company says Godrej Group's foray into the gourmet retail segment was a futuristic plan based on its commitment to innovation. |
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| News: Food & Grocery, QSR ... | | |
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 | Gaurav Jain and Pallavi Gupta were techies working in Bengaluru before they turned entrepreneurs. Mast Kalandar, the chain of restaurants they started in 2005, now has 18 outlets and they plan to expand this to 100 by 2012. In an interview, Gaurav Jain talks about their journey as successful entrepreneurs. |
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| Retail Trends | | |
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In a newfound aggression, select private brands of modern retailers have mustered the courage of pricing their products on a par with branded players. The trend is particularly unfolding in foods. So, a variant of Tasty Treat's cornflakes from Future group jostles for consumer attention at the same price point as Kellogg's honey loops, while Smart Choice instant noodles from Spencer's is tagged at the same price as other brands in the segment. |
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Modern retail has taken a lead in its fight against consumer product companies with consumer product companies including Hindustan Unilever and Procter & Gamble increasing retailers' margins on the wake of tough competition from the latter's private brands. "Since March this year, multinationals including Hindustan Unilever, Procter & Gamble, Reckitt Benckiser and Kellogg's have been increasing margins by 10-25% in leading supermarkets like Big Bazaar and Reliance Retail to match up with low priced private brands offered by retailers," a top industry official said on condition of anonymity |
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Corporate social activity with a fee. Sounds paradoxical, but that's what the Punjab government wants in this instance. The state has asked Bharti-Walmart, the equal joint venture between the world's largest retailer Wal-Mart and India's telecom-to-retail giant Bharti Group , to begin charging students for its training initiative. The joint venture that only operates cash-and-carry stores in India as per Indian government FDI norms, will begin charging students Rs2,000 each at its training centre in Amritsar and others expected to come up in the state. |
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| Retail Insight | | |
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| How to get the most out of Retail Marketing |
| RMI |
This white paper has come from bringing together some of the best minds in the retail marketing industry at the 2010 Instore show to shed light on how to get the most out of retail marketing. The challenge, and indeed the opportunity, for brands and their agencies is to create a rule book for the integration of retail communication channels with traditional above the line media to deliver cohesive and effective campaigns. |
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