Spencer’s retail likely to unveil wholesale format

RPG GROUP led Spencer’s Retail could look at foraying into wholesale trading business in the near future. The retail chain is likely to unveil a business-to-business wholesale trading model once its sourcing operations attain maturity on the back of rapid store expansion. Speaking to ET, president of Spencer’s Retail JH Mehta said: “We are focused on scaling up our operations to 2,000 stores over the next two years. With this, we will be well placed to launch wholesale trading format as it gives our sourcing capabilities the necessary strength.” Interestingly, the B2B model of Spencer’s is expected to focus on overseas retail chains catering to Indian diaspora and dealing in Indian staples. It would also look at tapping the growing sectors like hotels and hospitality for supplying fresh fruits and vegetables, for instance. Spencer’s plans to invest over Rs 1,200 crore till 2009 to develop its store footprint. Out of this, about 70-odd would be hyper stores with upwards of 25,000 sq ft area. The company currently has 125 stores with eight hyper outlets included. The retail chain’s revenue is expected to progress from Rs 600 crore to Rs 2,000 crore by 2009. To support this expansion, Spencer’s is in the midst of setting up a robust supply chain with sourcing hubs for fresh fruits and vegetables and staples across the country. Currently, it has one sourcing hub in Hoskote (Karnataka) and one in Tamil Nadu for fruits and vegetables. For staple it has established a sourcing hub in Andhra Pradesh and Lattur (Maharashtra). To cater to the northern market Spencer’s plans to launch a sourcing hub in Nasik and also somewhere near Panipat or Haridwar. Each of this sourcing hub in turn is linked to the distribution centre in each cluster. “Basically, we have adopted a cluster model under which each cluster in the state will have 50-60 stores and some states like Andhra Pradesh could have more than 2 clusters. Overall Spencer’s will have about 30 such clusters,” said Mr Mehta.

Courtesy: EconomicTimes
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