Noor Mohammad Kolkata, Hardnews
Even as retailing price warriors such as Subhiksha are scaling down their business operations amid the deepening economic recession, Spencer's Retail remains resilient and is going ahead with its expansion plan. Spencer's plans to open 400 new stores in the next two years, its marketing head Samar Singh Sheikhawat tells Hardnews.
The RPG Group-promoted Spencer's Retail remains a bright spot in the domestic retailing scenario darkened by the credit crunch and economic recession. Although it has seen its sales revenue and profitability decline in recent months, the company is very much on the growth trajectory. For this, the company gives credit to its business model, which is not driven by price competition alone but also focuses on things such as quality, convenience and customer service.
Another comforting thing is that unlike many other retailers, the company has been financing its business expansion plans with its own money instead of going for large-scale debts. And that is the reason why the company is sitting pretty in the face of the global credit crunch, while other players are facing serious cash-flow problems and scaling down their growth plans.
"We have definitely reduced our revenue and expansion guidance for the next fiscal keeping the realities in mind, but we are opening new stores across India. We currently have 350 stores and plan to add another 400 in the next two years," Sheikhawat told Hardnews.
"The industry will grow, definitely not at the pace, originally forecast, but enough to continue being one of the leading contributors to the Indian GDP," he added.Explaining the company's business model, Spencer's marketing chief says that if the consumers can be slotted in the retail pyramid, there would be four categories of takers.
"The price players operate in the second segment - the target consumer group being the less affluent class of people. They don't seek quality, convenience, customer service, store ambience etc since their only driving factor to a retailer's store is price. Most of these price players follow what is called everyday low pricing," he says.
"It is the third segment which is a large chunk, comprising young, working population (media age of 26), with nuclear families in urban areas and high disposable income. Their needs remain largely unattended as they look out more for a convenience one-stop-shopping experience with store ambience which is warm, fun-filled and helps them to unwind and bond with their family and friends," Sheikhawat explains.
"Spencer's focus is this segment -- upwardly mobile and affluent class. They are not merely driven by price or discounts. For them range and assortment is also important. In addition, quality and shopping experience also matter for them. In short, we have no competition since we are not merely price players.