Just over two years after it announced a big-bang foray into food and beverage retailing with three brands, retail major Shoppers Stop, promoted by the K Raheja Corp, appears to be exiting them one by one.
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Fresh Basket, Desi Caf頡nd Caf頂rio, the three brands started by the department store chain in 2006 to enhance shopping experience, build guest loyalty and eventually increase revenues, may well exemplify a business diversification gone wrong.
Back in May 2006, Shoppers Stop CEO Govind Shrikhande had told DNA they were keen to push up the share of customer spend on food items at its stores to over 5% from 2% at that time. To achieve this, the retailer planned to open around 100 food outlets over the next 30 months.
Over 30 months later, the number of food outlets is barely a fourth of that -- 19 Caf頂rio and 3 Desi Caf頯utlets.
According to B S Nagesh, customer care associate and managing director, Shoppers Stop, the management is working on the way forward for Desi Caf鮼/p>
The Caf頂rio outlets, meanwhile, would be replaced with Caf頃offee Day (CCD) outlets over the next couple of months. As per the memorandum of understanding signed by Shoppers Stop with Amalgamated Coffee Bean Trading Co (ABCTCL) recently, the CCD outlets will be run under a revenue sharing agreement.
Fresh Basket has become a private label of Hypercity Retail, serving a whole range from fruits and vegetables to staples.
"We have in a way moved out of the food business," Nagesh said in response to a DNA Money questionnaire.
According to Nagesh, the group had set a target of 50 departmental stores and 100 Crossword Bookstores by 2010-11. At least two-thirds of these were to have Caf頂rio outlets.
As of today, it has 26 Shopper's Stop outlets 54 Crossword stores.
Nagesh said the company has not expanded the food business aggressively as it required certain scale.
But more importantly, while initiatives such as Crossword, Mac and Mothercare have become profitable, the F&B business has not.
"In future, our F&B business will be operated in concession, association or alliance with third party operators," said Nagesh.
In fact, K Raheja Corp might be looking to extend the CCD alliance to its Hypercity Retail and Crossword stores.
Alok Gupta, director of ABCTCL, while refusing to make a specific comment, said they planned to have CCD cafes in all their retail outlets.
The Shopper's Stop management is also learnt to have toggled with a bunch of food and beverage entrepreneurs who were invited to make business plan presentations. The entrepreneurs may either be recruited to head a business or be allowed to run it as third-party management entity.
"The company seems to have gone through the whole learning curve, getting operational insight and starting out on its own, and then deciding it's better to leave the business to experts than burn cash on its own," said one of those invited.
Monday, February 9, 2009
Coca-Cola: A journey over 120 years old
Little drops of joy’ as they call it, soft drink and beverages brand Coca-Cola came into existence in 1886 in Atlanta, New York, USA. From selling only nine glasses of drinks a day initially, after a successful stint of operation for over 120 years, the company currently produces more than 10 billion gallons of drink a day and sells its products across 200 countries worldwide. With more than 450 brands, the company is one of the largest beverage companies in the world keeping the language of refreshment universal across the globe. The product comes into existence:It was1886 in New York Harbor when the construction of the Statue of Liberty was in progress, John Pemberton, a pharmacist in Atlanta, was intrigued by a fragrant caramel-coloured liquid. He carried it a few doors down to Jacobs' Pharmacy where the mixture was combined with carbonated water and sampled by customers who all agreed — that this new drink was something special. Jacobs' Pharmacy then put it on sale for five cents a glass. Later, Pemberton's bookkeeper, Frank Robinson, named the mixture Coca-Cola and wrote it out in a distinct script, the same way it is in use these days. According to the company: “Quality is more than what we taste or see or measure. It shows in our every action. We relentlessly strive to exceed the world's ever-changing expectations because keeping our quality promise in the marketplace is our highest business objective and our enduring obligation.”Coca-Cola comes to India:In sync with the company’s global expansion plan, Coca-Cola entered India eventually and led the soft-drink market till 1977 when government policies necessitated its departure. The corporation re-entered India in 1993 after a 16 year hiatus, giving a new thumbs up to the Indian soft drink market. Following this move, the company made significant investments in the Indian market to ensure that the beverage was available to more and more people, even in the remotest and inaccessible parts of the country. In the same year, the company took over ownership of the nation’s top soft-drink brand and bottling network of Ramesh Chauhan's Parle. The brand earns loyality:More often than not, the company has enthralled consumers in India by connecting itself with their passions including cricket, movies, music and food. Sponsoring the World Cup in 1996 and various other tournaments including the Coca-Cola Cup in Sharjah in the late nineties, the brand became popular and famous among urban Indian population. Further, the company, through its advertising campaigns like Jo Chaho Ho Jaye and Life ho to Aisi entered youth vocabulary. In 2002, Coca-Cola launched it's iconic campaign ‘Thanda Matlab Coca-Cola’ which helped the brand to make it India's favourite soft-drink brand ever. Celebrities including Karishma Kapoor, Srinath and Sourav Ganguly also helped the brand to reach the masses. The trend further continued with the associations of brand ambassadors like Aamir Khan and Hrithik Roshan.Brands in its portfolio:Coca-Cola is the most popular and biggest-selling soft drink brand with over 700 beverage products in its kitty. The products are categorised largely under seven heads including energy drinks, juices, soft drinks, sports drinks, tea and coffee and water. But the brand Coca-Cola is popular in and around for its soft drink ranges that include Coca-Cola, Thumbs Up, Sprite, Fanta, Limca and Maaza. While Kinley is the bottled water range of Coca-Cola, Georgia serves as a ready-to-drink canned coffee in over seven variants.Growth trajectory in India:Coca-Cola India is among the country’s top international investors. Since its inception, the company has been making significant investments to build and continually consolidate its business in the country, including new production facilities, waste water treatment plants, distribution systems and marketing channels. During the first decade of operation, the company invested over USD 1 billion in India and further pledged another USD100 million in 2003 for its operations. Not only that, Coca-Cola has entered the rural untapped market giving an impression to the industry that if an MNC does its homework well and gets its distribution mix right, it need not restrict itself to India's urban middle class. Coke now claims that 80 per cent of its new drinkers come from rural India, where per capita consumption has nearly doubled during the last few years. Currently, the company is operational with over 65 manufacturing locations across 18 states in India. Products launched in 2008:In the last year, the company has added eight new variants in its portfolio. Starting with espresso-based coffee Ilko in March 2008, the new products launched in the year include an antioxidant brand Nestea with green tea flavours, juice range Simply Orange, energy drink Full Throttle, chilled tea variety Gold Peak, NESTEA with red tea pomegranate passion fruit flavour, Sprite green and thirst quencher Odwalla. Products on the anvil:With the roll out of Sprite variant Sprite Apple nationwide recently which was earlier available only in southern market, the company is further ready with an extensive range of products to roll out across the country including low-priced powder drink Vitingo and energy drink Burn in this year. Atul Singh, president and CEO, Coca-Cola India, said, “Timing for us is very important. We are always evaluating different categories of products and as we believe is the right time, we will bring these products in the market.” Further, Singh informed that the company is on it’s way to go ahead with earlier announced USD 250 million investment plans. The company is also working on introducing a lemonade later in the year that would be its third lime-based drink, besides the existing Sprite and Limca brands. Meanwhile, the company has also tied up with cricketer Gautam Gambhir for the summer campaign targeting huge cash amidst the forthcoming IPL tournament. Though Singh does not want to speculate about the returns from the proposed campaign, he is very excited with the signage and said: “Let the IPL start and let's see what happens.” CSR initiatives: Keeping its business plans rolling, Coca-Cola always stands apart thanks to its corporate social responsibility initiatives. Globally, the company is consistently working hard to find out mechanisms to minimise the use of water in its production plants. Further, the company is aggressively working with NGOs for water conservation across the world. As part of the plan, recently, Coca-Cola India signed an agreement with country’s leading NGO SOS Children’s Village to develop rain water harvesting plants across 39 SOS locations in India. For the proposed project, the company will invest USD 585,000 of which USD 391,920 has been granted by the Atlanta-based Coca-Cola Foundation. Atul Singh, president and CEO, Coca-Cola India, said, “Our sustainability as a business demands a relentless focus on efficiency and prudence in our use of natural resources. Water is fundamental to all communities and water stewardship remains a priority for Coca-Cola India. At our end, we pursue a 3R programme of water conservation that includes reduced use of water, recycling of water and replenishing the water.” Also, the company has signed an agreement with Bharat Integrated Social Welfare Agency (BISWA) to reach to around one million women and children to provide affordable alternatives to alleviate ‘Hidden Hunger’ by 2010. Speaking about the same, Shourov Mukherjee, director — strategic initiatives, Coca-Cola India, said, “At Coca-Cola India, it has always been our effort to ensure sustainability of our communities and make a difference to their lives. This is a one of its kind NGO-Corporate collaboration to reach to the pockets identified as under-serviced. We intend to cover 500 self help groups by June, 2009.” These success stories notwithstanding, the company has had to face several controversies, especially the much discussed pesticide controversy in 2003. But, true to its professed commitment of delivering quality at all costs, Coca-Cola continues to delight existing customers while adding new ones every minute.
Koutons Retail to open 80 more outlets by March ‘09
With the view to strengthen its retail presence in India, apparel retailer Koutons Retail plans to increase the number of its stores from 1.420 to about 1,500 by March 2009. Speaking to IndiaRetailing, Balwinder Singh Ahluwalia, president, Koutons Retail said, “As a part of our expansion plan, we plan to open to launch 80 more stores by the end of FY ’09.”However, the company plans to keep 90 per cent these stores on franchised model and the remaining 10 per cent as company-owned showrooms, informed Ahluwalia.Further, the company plans to expand its retail space by taking basements and first floors of the buildings on lease. "Rentals drop by 30 to 50 per cent if we open our stores in basements or first floors", added Ahluwalia. The average space of the retail stores would extend from 900 to 3,000 square feet. Meanwhile Ahluwalia accepted that the Rs 7.93 billion Koutons retail may fall short of its revenue target for current fiscal. “Economic slump effect is on the entire country. It has affected the retail sectors as well,” concluded Aluwalia.
Trent to bring in Topshop; signs Zara
Retail operations company of Tata Group, Trent is learnt to be in talks with London-based Arcadia Group, to bring latter’s chain of clothing stores Topshop in India. According to sources close to the development, the talks are already at the final stages.Meanwhile, the much awaited brand – Zara now be available in India as a result of a joint venture signed between Trent Ltd and Inditex Group. As a part of the deal, Zara stores would be launched in India in 2010 with initial stores in New Delhi, Mumbai and other major cities in India.Commenting on the JV tie-up Inditex’s first deputy chairman and chief executive Pablo Isla said, “We view our entry into the Indian market to be of significant strategic importance. We are extremely delighted to be associating with Trent from the Tata Group one of India’s largest and most respected business houses. “Our retail offering has been very well received by shoppers in Asian markets, and we have rapidly expanded there. And now India will be one of our top priorities in the region,” added Isla.Inditex is one of the world’s biggest fashion retailers from Spain and Trent Limited is the retail arm of the Tata Group.
Levis’ bags IFA’s Most Admired Jeanswear Brand
At the scintillating finale of the 9th Annual Images Fashion Awards (IFA) in Mumbai, San Francisco’s lifestyle apparel and jeanswear brand Levi’s has been awarded with the Most Admired Jeanswear Brand of 2009.The nominees in the category were Pepe, Spykar, Lee and Numero uno.Levi’s has 24 flagship stores in India and over 160 multi-branded stores across India. Further, the company plans to open 1050 stores across India in the next three years.
Pantaloon Retail triumphs as Images Fashion Awards
Kishore Biyani-led Future Group’s flagship enterprise Pantaloon Retail has bagged the Most Admired Private Label Retailer of 2009 at Images Fashion Award 2009, held in Mumbai.Leading groups including Reliance Retail, Shoppers' Stop, Trent, Lifestyle and Globus were the other nominees in the category.Pantaloon Retail operates multiple retail formats in both the value and lifestyle segment of the Indian consumer marker. It operates over 1000 stores across 61 cities in India. Its principal formats include Pantaloons, a chain of fashion outlets; Big Bazaar, an Indian hypermarket chain and Food Bazaar, a supermarket chain.
Pantaloon Retail triumphs as Images Fashion Awards
Kishore Biyani-led Future Group’s flagship enterprise Pantaloon Retail has bagged the Most Admired Private Label Retailer of 2009 at Images Fashion Award 2009, held in Mumbai.Leading groups including Reliance Retail, Shoppers' Stop, Trent, Lifestyle and Globus were the other nominees in the category.Pantaloon Retail operates multiple retail formats in both the value and lifestyle segment of the Indian consumer marker. It operates over 1000 stores across 61 cities in India. Its principal formats include Pantaloons, a chain of fashion outlets; Big Bazaar, an Indian hypermarket chain and Food Bazaar, a supermarket chain.
Reebok sweeps IFA’s Most Admired Active Sportswear Brand
Sports apparel and footwear major Reebok has swept away the award for the 'Most Admired Active Sportswear Brand 2009' of the 9th Annual Images Fashion Awards (IFA) in Mumbai.The nominees in this category included Bata, Liberty, Metro, Khadims, Sreeleathers and Lakhani.Reebok is an American-inspired, global brand that creates and markets sports and lifestyle products for sports, fitness and women’s categories. Started its operations in India in 1995, Reebok has grown six times in the last four years. Presently, it has more than 675 stores across the country, which it plans to increase to 800 by next year.
Shoppers Stop’s BRIO, Desi Café to turn into CCD
Pioneer in the departmental format of Indian retail Shoppers Stop, promoted by K Raheja Group, has entered into an memorandum of understanding (MoU) with India's leading fine coffee cafe chain and a division of coffee conglomerate Amalgamated Bean Coffee Trading Company (ABCTCL) Café Coffee Day (CCD). The MoU will allow ABCTCL to run Shoppers Stop to run its BRIO and Desi Cafe outlets. As per this understanding, the existing cafes operated by Shoppers Stop shall be converted into the Cafe Coffee Day formats, over the next few months, said a joint press release. Further, ABCTCL shall also operate cafes in upcoming Shoppers Stop stores to provide an enhanced customer shopping experience.“We are delighted to announce our association with Cafe Coffee Day. This association between Shoppers Stop and Cafe Coffee Day will bring together the leading brands in their respective segments, and to further provide our customers a delightful experience while shopping in our stores,” said BS Nagesh, customer care associate & MD, Shoppers Stop, in the release. This will be a revenue-sharing model between both the parties, where all existing outlets will be converted into CCD formats. The day-to-day activities like managing the logistics and the supply chain of individual stores would also be taken care of by CCD. “It is part of our strategy to be present in various lifestyle formats which consumers desire and we are looking forward to serving Shoppers Stop customers across the country,” added CCD director Alok Gupta. With 718 Coffee Day outlets, CCD enjoys strong presence in 103 cities across India. It is also present in overseas market of Karanchi, Pakistan and Vienna, Austria with 6 franchisee outlets.
Reliance ADAG launches separate movie marketing division
Media conglomerate of the Reliance Anil Dhirubhai Ambani Group (ADAG) Reliance BIG Entertainment has announced the launch BIG Boom. The new division has been setup for movie and entertainment marketing.BIG Boom will be one-stop-shop for all marketing solutions for films, ranging from associative marketing to publicity design, PR, promotions and merchandise. Further, it will also assist brands in leveraging the film and entertainment platforms to achieve their business objectives, said a company press release.Rajesh Bhushan, who has been entrusted the responsibility as business head of BIG Boom, said “Movie marketing has come of age in India. With breakthrough marketing strategies seen for films like Ghajini, Rock On, Om Shanti Om etc, film producers are now realising the importance of a strategic and cost effective method to promote their films. ““These are times where every penny counts and Bollywood producers need marketing professionals to generate more bang for every buck while ensuring minimum excess,” added Bhushan.
Guardian launches X-tra Vital
India’s leading retail chain of health, wellness and beauty stores Guardian Lifecare has announced the launch of Guardian X-tra Vital for men and women under its private labels health care range. The new product is multivitamin and mineral capsules, a daily food supplement and is fortified with extra ginseng. Speaking about the products, Ashutosh Garg, CMD, Guardian Pharmacy, said, “Guardian X-tra Vital for men has extra ginseng for improved energy levels. Guardian X-tra Vital for Women has extra ginseng, calcium and iron to meet their nutritional deficiencies.”Priced at Rs 70, the product is available in a blister pack of ten capsules at all the retail stores of the company.
Cartridge World bags award in retail excellence
Australian speciality cartridge refilling and retailing chain Cartridge World also conferred with ‘Reid & Taylor Jury’s special award for retail excellence. On the occasion Naveen Rakhecha, CEO, South Asia, Cartridge World, said “This is significant achievement by itself. We have received five Awards in last two years of our operations in India.” “First it was the idea and now the implementation that has been recognised. The award will encourage all of us to scale greater heights and do better in times to come as customer expectations rise,” he added.Cartridge World stores spread across 22 cities across India. According to Rakhecha, more stores will be launched across Pondicherry, Jammu and Nasik soon.
Taranco Group acquires golf apparel brand Greg Norman
MacGregor Golf-owned global golf apparel brand Greg Norman has been acquired by New York-based Tharanco Group. Announcing the development, Michael Setola, president and CEO, MacGregor Golf, said, "Tharanco gives Greg Norman Collection the opportunity to accelerate the building of lifestyle brand with Tharanco that has a strong and resourceful operations platform.”Setola will remain CEO and is a partner in the new company, Tharanco Lifestyle, LLC. Meanwhile, the amount of the deal remains undisclosed.“The company will continue to place its apparel emphasis on being a leading authentic golf lifestyle brand that combines performance, luxury and style through innovative product development. Additional emphasis for growth will be placed on international licensing and other related product licensing opportunities," added Setola.Adding further, Haresh Tharani, CEO, Tharanco Group, said, "I am particularly excited about future efforts to expand lifestyle sportswear opportunities beyond true golf in an effort to capture the consumer reach inherent in the Greg Norman brand."Greg Norman is available in India through a distribution tie-up with domestic company BTB Marketing. The new agreement is effective immediately and Greg Norman Collection will continue to be managed and sold by its existing sales team.
Subhiksha stores vandalised
Hundreds of Subhiksha stores were looted or vandalised after the Chennai-based India's leading discount retailer Subhiksha Trading Services failed to pay security agents and staff because of liquidity problems, the Financial Times reported. About 600 of Subhiksha’s food stores and warehouses were vandalised, the newspaper said, citing the company. Subhiksha, which has revenue of USD 470 million from 1,655 stores, is struggling to pay suppliers and employees after banks refused to lend it money, the FT reported. The company is unable to protect its properties, the report cited managing director R Subramanian as saying.
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