Case Study
CASE STUDY 5
SUBHIKSHA
Uprising discount stores – the next Retail Revolution
Discount chain Subhiksha is on the move. After having established itself as a niche player catering to the middle class through its neighbourhood stores in Tamil Nadu, Subhikaha is now expanding — both geographically and in terms of customer profile. It has big plans for new stores in Bangalore, Mumbai and other place. Its acquisition of Fabmall has given it an opportunity to tap the high end segment of the market too.
In the early 90’s, organised food retailing was in its nascent stages and during that period a number of players like Food World, Nilgiris and Vitan had just made an entry into the food retailing space. India is one of the largest producers of milk, fruits and vegetables in the world. Yet, the organised food retail business in the country is among the least developed. The irony is not so difficult to comprehend if one looks at the Indian food chain. From the farm to the store, the links are too many and full of problems. The trend at that time was to set up large format stores that catered to the high end segment of the market. The whole idea behind Subhiksha was to start a neighbourhood store that catered to the middle class segment. Subhiksha, works on a formula of one store every 1.5 km. The first store was opened in Thiruvanmiyur in Chennai in March 1997 and now, we have about 142 outlets in Tamil Nadu and Pondicherry. Subhiksha is today one of Chennai’s largest supermarket and pharmacy chain. With an annual turnover of Rs.120 crores in 2000, it is planning to achieve a turnover of Rs 1500 crores by 2003. Subhiksha is supported financially by an asset management company -Venture Capital Partnership Fund – which belongs to the Vishwapriya Group, a specialist in financial services. From a retail point of view, quality cannot be a differentiated between food retail chains since 60 per cent of the goods sold by them are anyway branded.
SUBHIKSHA
Uprising discount stores – the next Retail Revolution
Discount chain Subhiksha is on the move. After having established itself as a niche player catering to the middle class through its neighbourhood stores in Tamil Nadu, Subhikaha is now expanding — both geographically and in terms of customer profile. It has big plans for new stores in Bangalore, Mumbai and other place. Its acquisition of Fabmall has given it an opportunity to tap the high end segment of the market too.
In the early 90’s, organised food retailing was in its nascent stages and during that period a number of players like Food World, Nilgiris and Vitan had just made an entry into the food retailing space. India is one of the largest producers of milk, fruits and vegetables in the world. Yet, the organised food retail business in the country is among the least developed. The irony is not so difficult to comprehend if one looks at the Indian food chain. From the farm to the store, the links are too many and full of problems. The trend at that time was to set up large format stores that catered to the high end segment of the market. The whole idea behind Subhiksha was to start a neighbourhood store that catered to the middle class segment. Subhiksha, works on a formula of one store every 1.5 km. The first store was opened in Thiruvanmiyur in Chennai in March 1997 and now, we have about 142 outlets in Tamil Nadu and Pondicherry. Subhiksha is today one of Chennai’s largest supermarket and pharmacy chain. With an annual turnover of Rs.120 crores in 2000, it is planning to achieve a turnover of Rs 1500 crores by 2003. Subhiksha is supported financially by an asset management company -Venture Capital Partnership Fund – which belongs to the Vishwapriya Group, a specialist in financial services. From a retail point of view, quality cannot be a differentiated between food retail chains since 60 per cent of the goods sold by them are anyway branded.