Well, here I am again. With almost 6 years of core Retail Experience, across Buying, Operations and IT, the industry seems to be so much more clear!

On the way, I have already incubated two enterprises: manufacturing and distribution of bean bags and Retailing and distribution of magazines(www.georgeindia.com). The later has got a seed capital of 1cr, and is on the way to a total revamp.

I am also now helping startups get funds, post due diligence, and proper evaluation of the models.

MBA seems so fulfilling now! But trust me, its the experience which matters!! Rest all is just a facade. Get down, and get dirty! I did clean toilets and sweep my store floor!

Keep watching this space; more on way!

From Starbucks to Wal-Mart, US buyers pull back

FROM lattes at Starbucks to clothing at Wal-Mart, US consumers are showing signs of lethargy and have retreated from their free-spending ways. “I don’t know if they’re dead, but they certainly are on life support,” Carl Steidtmann, chief economist with Deloitte Services, said of the more liberal-spending consumer, which in the past had led the boom in the US economy. But as the housing market decline moves into its second year, energy prices continue to be high and food prices jump, the consumer could actually be a drag on the US economy. “Now the consumer makes up about 70% of all GDP growth,” Steidtmann said. “If that goes from a factor that is boosting growth to one that is (hurting) growth, that could very clearly be a factor that could lead to a recession.”

Wal-Mart Stores on Tuesday reported lower-than-expected second-quarter profit and said sales at US stores open at least a year rose only 1.9%. “It’s no secret that many customers are running out of money toward the end of the month, said Lee Scott, chief executive of the world’s largest retailer. The company, which has more than 127 million customers in the United States alone every week, also said shoppers were spending more on lower-margin items like food and eschewing higher-margin goods such as apparel. While economists tend to discount the impact of rising food prices in monthly inflation reports — because food tends to be a volatile component — consumers still feel the impact of widespread food price increases in their wallets. Sixty-five percent of US shoppers said they experienced significant price increases in their local supermarket, causing them to spend at least $8 to $20 more a week on groceries, Britt Beemer, chairman of America’s Research Group, said, citing a survey the group conducted in July. That compared with 53% in February and March and increased spending of $6 to $12. “They’re devastating back to school right now,” Beemer said of higher food prices, which appear to be cutting into back-to-school shopping for new clothing and other necessities.

But it isn’t just the Wal-Mart consumer who is being hurt. Sears Holdings said on Monday that sales at US Sears stores open at least a year fell 4.3% in its second quarter, with Kmart sales down 3.8%. Meanwhile, Home Depot has been hammered by the slumping US housing market and posted a 15% fall in second-quarter profit on Tuesday.

STILL A KING?

Consumer spending, the driving force behind the US economy, has slowed down in the past few months, although was resilient through a series of gasoline price spikes In the second quarter, consumer spending advanced at a slim 1.3% annual rate, down from 3.7% in the first quarter As the housing market continues to decline, energy prices remain high and food prices jump, the consumer could actually be a drag on the US economy

Retailers’discounts wean customers away from local chemists

BEING loyal to your neighbourhood retail stores could help you get medicines cheaper. With competition hotting up in the $5-billion domestic pharma retail market, customers are offered discounts ranging between 10-20% for most medicines. Retailers contend that such huge discounts would help retain customers and wean them from local chemists. Subhiksha, India’s retail chain offers a flat 10% discount on all medicines to customer irrespective of their profile. “We have the lowest price and cost structure that helps us give discounts and in turn retain customers”, Subhiksha MD R Subramanian said. In India, many drugs are sold over the counter unlike the developed countries where only a few are sold through retail outlets. Some retailers directly sell medicines while a few have tied up with local chemists for distribution. Delhi-based Pharma retail store 98.4 Degrees also works on the philosophy of discounts besides providing value added services like home delivery. “We give huge discounts to our loyal customers to retain them”, 98.4 Degrees marketing executive Neeraj Arrya said.

Med Plus, another pharma retail chain has also taken to the same model. “Our idea is to target the 40 plus population. We are targeting them through our customer loyalty cards”, Med Plus CEO Madhukar Gangadi said. Big retail chains are essentially banking on volumes to break even. But there are some players in the industry who oppose the discount model. North India-based pharma retail chain Guardian Lifecare is averse to offering discounts. “Quality management is our major focus. When we are dealing with life saving drugs quality rides over cost,” Guardian Lifecare CMD Ashutosh Garg said.

Many local chemists offer discounts only on day-to-day drugs in contrast to big retailers who give them for all medicines. For customers, it seems to be a win-win situation as they have the advantage of getting their regular medicines at prices lower than the maximum retail price (MRP).

Shoppers non-stop at Big Bazaars

THE saffron, white and green ambience of Big Bazaars across the country went completely unnoticed in the midst of a riot of shoppers. The five-day ‘independence sale’ of Big Bazaar, with some items discounted by nearly 60% to mark the 60th Independence Day, culminated across the country with people lining up for upwards of three-four hours before they could step foot into some of the stores.

As a result, the hypermarket chain saw crowds well in excess of the 15,000 footfalls they get over weekends in some of their bigger stores. At 11.30 PM at Phoenix Mills, Mumbai, it seemed like a normal holiday shopping crowd. However, within an hour, as school Independence Day functions wound up, the crowds came, and both the parking lot and the mall attendants were stretched. The police were on stand-by to avoid any untoward incident after last year’s fiasco at Phoenix Mills. A steady stream of delivery trucks made their way into the mall over a period of three hours to ensure that there were no stockouts. As the entry line at Phoenix Mills wound itself around the extremities of the mall, the store attendants provided biscuits and water to the waiting people. Says Rajan Malhotra, chief executive, Big Bazaar, “We were better prepared this year after the events of last year. Hence we spread it out over a longer period and made better arrangements for all our customers.”

The total number of Big Bazaars, at 66, have more than doubled from last year. According to Mr Malhotra, the targeted revenues from the five-day sale was Rs 150 crore. Some categories like home furnishings had discounts upwards of 30% on a listed price of Rs 50,000 and were a fast moving category

Pulse - Maturity Patterns

Store Loyalty

Reliance Retail kicks off dairy foray with sip of liquid milk

RELIANCE Industries’ (RIL’s) ambitious dairy plans are finally taking wing. The company, which has been working on plans to enter the country’s Rs 40,000-crore branded dairy sector over the past two years, has kicked off the venture by foraying into the lucrative, but low-margin, liquid milk category. Reliance Retail has begun testing liquid milk, branded Dairy Pure, in Hyderabad, sources told ET. It has tied up with a south-based private dairy operator. The liquid milk has been rolled out in four variants at a pricing structure that pits RIL’s brand against other competing liquid milk brands in the state such as Mother Dairy, Vijaya and a host of other private players. However, Gujarat Milk Marketing Cooperative Federation (GCMMF)’s Amul, which leads the country’s Rs 15,000-crore branded packaged milk market, does not have a presence in Andhra Pradesh. In fact, Amul liquid milk is not yet present in the southern states. When contacted by ET, an RIL spokesperson declined to comment. Hyderabad is a reasonably big liquid milk market with a total estimated size of approximately 11-12 lakh litres per day (lpd), of which packaged milk accounts for 8-9 lakh lpd.

Sources said retailing of liquid milk is expected to commence later this month at Reliance Retail stores across all states. RIL has signed up with the Punjab government for milk procurement. It plans to buy 7 lakh litres every day from 1.5 lakh farmers across 3,000 villages in the state. Other plans include supporting milk cooperatives in Uttar Pradesh and Bihar, but no agreement with cooperatives has been finalised so far. In UP and Bihar, Reliance Retail proposes to set up over 5,000 collection centres, which will be a single-window selling system for the milkmen in the area. RIL is also working on a private label to make deeper inroads in the dairy sector. The country’s biggest market for liquid milk is Delhi, estimated at 50 lakh litres per day, of which pouches account for 35 lakh lpd. National Dairy Development Board (NDDB)’s Mother Dairy leads the Delhi market. Unlike other FMCG products, margins in liquid milk are very low — at just 3-5%. The biggest challenge for players operating in this sector is to work out efficiencies in logistics. However, the dairy sector has a huge potential, with the country’s milk production estimated to have touched 100 million tonne last year. India also happens to be the world’s largest producer of milk. WHITE FLOOD RIL has signed up with Punjab government for milk procurement. It plans to buy 7 lakh litres every day from 1.5 lakh farmers The company also plans to support milk cooperatives in UP and Bihar, but no agreement with cooperatives has been finalised so far Reliance Retail has planned 5,000 collection centres in UP & Bihar. It is working on a private label to make deeper inroads in dairy sector