THE FRESH (RETAIL) REVOLUTION IN INDIA

The once ubiquitous push-cart vendor’s days look numbered. Many of the big retail players are setting up fresh fruits and vegetables and daily needs stores close to your homes, with innovative products and convenient options like shopping on the phone

As you enter the Reliance Fresh store on Coles Road in Bangalore that opened on Thursday, amongst the first things that catch your eye is this whole range of trays on a rack, neatly packed with cut vegetables. There are cut vegetables for English salad, for Mexi, spicy corn salad, for sambar. For harried working couples and lazy cooks, there are also options like cut vegetables for pulav, for Chinese fried rice. For those who hate peeling pineapples, there are peeled pineapples nicely wrapped in thin plastic filament. For those who want a quick bite of a watermelon, but don’t want to buy a full watermelon (which is typically the only option you have), there are similarly wrapped watermelon slices. The rest of the airconditioned and neatly arranged store, with nearly 150 varieties of fruits and vegetables, is equally distinctive. Till now, the fruits and vegetables section in organised retail formats have constituted a small fraction of the store space, the only exceptions being Namdhari Fresh, and cooperative initiatives like Hopcoms and Safal. In Reliance Fresh, this proportion is 40% to 50%. In Spencer’s Express — part of the RPG Group’s Spencer’s Retail — which too opened its first store in Bangalore this week in RT Nagar, this proportion is 40%. It goes up to 75% if you include all perishable items like milk, paneer, idli batter and fresh flowers, says Spencer’s Retail vice president (marketing) Samar Sheikhawat. The idea of this emerging retail format, as you perhaps guessed, is to tap into your daily needs, and wean you away from the local vegetable seller, grocer and push-cart vendor by providing a better ambience, a wider range of products, innovative offerings and the assurance of quality. A host of players — Heritage Foods, Fabmall/Trinethra and Subhiksha, apart from Reliance and Spencer’s — are now beginning to set up these neighbourhood stores of an average size of 2,000 sq ft to 3,000 sq ft (the traditional kirana store is no more than 100-500 sq ft). Since they are smaller than supermarkets, they find it easier to find locations closer to your homes. S Jagdish, vice president (retail) in Heritage Foods, says fruits and vegetables constitute about 22% of the average monthly household consumption expenditure in urban areas of Rs 4,300. Food and groceries as a whole accounts for about 50% of the monthly expenditure. “This is the rationale for us setting up exclusive food and grocery stores, with at least 30% of space reserved for fruits and vegetables,” he says. Greater options Most players are trying to build distinctiveness by offering a wide range of products. In traditional stores, you wouldn’t find more than 30-40 varieties of fruits and vegetables. “Reliance Fresh will have some 150 varieties,” says Gunender Kapur, chief executive of Reliance’s foods business. There are products you would normally not see, things like Chinese cabbage, jalapeno, broccoli, American corn, colour capsicum, avocado and anchovies. There are both packed and loose options. About 80% of buyers still prefer the loose option, says Spencer’s Sheikhawat. Most Indians still like to touch and feel the products. Some customers are wary of packed products partly because they are seen to perish faster. When the vegetables breathe, they cause humidity inside the pack that could lead to fungal growth. “But there are others who think fewer people would have touched the packed stuff, so they prefer that. Besides, it’s very convenient for those like working couples who are in a hurry,” says Sunil Chandran, chief executive (customer operations) of Reliance (Karnataka). Reliance has thin plastic bag rolls around the store which customers can pull out to put their vegetables or fruits into. There’s even a weighing scale next to the racks for anybody who wants to check the weight before going to the cash counter. Most are planning to offer the home delivery option, and even of taking orders on the phone. “But phone-ordering will require us to build a lot of confidence in people’s minds about our quality,” says Heritage’s Jagdish. Competitive prices The prices in the newer stores are competitive with general market prices. In some cases, it is actually lower, but whether these will be sustained remains to be seen. Most of these players eliminate part of the ‘middle-men’ costs and reduce wastage by handling the products better. But against these benefits are the signficantly higher infrastructure and retail costs, compared to those borne by the roadside vendor. The cut vegetables are likely to offer higher margins. While shredded carrots are sold by Reliance in a packed form at Rs 3.60 for 250 gms (or Rs 14.40 a kg), the same carrot in its loose form is Rs 11.50 a kg. Company officials say that part of this difference is on account of greater wastage when a shredding machine is used. Farm connect Most players are investing heavily in backend infrastructure and supply chain. There are collection centres across the state, where farmers come and deliver the produce. Spencer’s has its own huge farm in Hoskote. There are processing centres and distribution centres closer to the store locations. The processing centres are where the products get cut and cleaned, most of those operations untouched by human hands. Big investments have gone into setting up cooling facilities — in every location and in the transport vehicles — to minimise wastage and increase shelf-life. “Normally, a lot of the capsicum and tomato are broken in transport. But we provide crates to farmers, which ensure proper handling,” says Chandramouli, head of agri-business in Reliance (Karnataka). THE OUTLETS Reliance Fresh: Koramangala, Banashankari, Indira Nagar, Frazer Town, Malleshwaram, Rajarajeshwari Nagar, Basveshwar Nagar, Modi Hospital, Mahalakshmipuram Layout, Mathikere, Hebbal Kempapura Spencer’s Express: RT Nagar

courtesy:timesofindia

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