Wednesday, September 27, 2006

Retail: Two ends

We had been to our usual wholeseller last week to stock up on our weekly provisions. This shop is a discovery for us. Our purchases used to be from nearby "supermarkets" until Subhiksha opened a store nearby. We figured that none of these supermarkets gave a discount on the MRP - Maximum retail price. But both Subhiksha and the wholeseller did.

Subhiksha is limited by its range, though it is pretty much a supermarket format with walkthrough aisles and so on. The wholeseller is a bare bones retailer - no self service shopping, no walk through aisles. But they serve our purpose.

Nearby the wholeseller is a new (relatively) store - Namdharis. Namdharis is a premium grocery store with organic food, exotic vegetables, salads, health foods and regular stuff as well. It is a pretty interesting store and has range, exotic stuff, good ambience. Compared to a vegetable vendor these guys are slightly expensive, but then again they service different markets - almost. And those who shop here find immense value.

What is interesting is how these will co-exist in the future. True, they service different markets, but really, there is a considerable amount of overlap. So, who is the loser in the current churn? I believe that the "supermarkets" which offer no benefit other than walkthrough aisles will be the first casuality. At one end will be low margin retailers like Subhiksha, the wholeseller and the kiaran while at the other end will be stores like Namdharis. Perhaps the new retailers will sit in the middle of the bell curve.

3 comments:

Nilu said...

I think another important factor is free home delivery. Most people I know prefer the local 'provision store' for a simple reason -- he gives the convinience of free home delivery. Am not sure if the supermarkets/Subiksha do that. Do they?

Prasanth said...

Nilu,

Subiksha delivers to your home free of cost.

Regards,

Prasanth

Mayank Krishna said...

Hi, I'm a first time visitor to your site...nice business blog :-)

You have raised some pertinent points in your retail post. I feel there will always be a niche just like in any other industry. They will have a select client base and they will charge a premium but they will never become very big businesses. They will be more like "designer retail stores".

You may like to read my post on retail: http://mayankkrishna.blogspot.com/2006/05/can-unorganized-retail-be-saved-in.html