Key Players in Food and grocery segment

The food and grocery sector in India has witnessed an onslaught of many new players in the market. Keep players in this segment include Food Bazaar – the Food & Grocery chain set up by Pantaloon Retail (India) Limited and Subhiksha – the Chennai based food, grocery and pharmacy discount retail chain. The latter presently has 700 retail stores across the country and is planning to open 300 new retail stores. The latter presently has 700 retail stores across the country and is planning to open 300 new retail stores at an investment of Rs 150 crores, within the next two or three months. In the FY 2006-07, Subhiksha has registered Rs 1,000 crore sales turnover. Subhiksha is eyeing Rs 3,000 crore sales turnover in FY 2007-08.

PPG’s foray into the food retail business happened in the year 1996, with the supermarket Food World. While Food World has now ceased to be a part of RPG retail, the company now operates its food and grocery retail business through various formats under the brand name of Spencer’s. Spencer’s Retail is the largest supermarket chain in India, spread across 125 stores across 25 cities, covering a retail trading area of half a million square feet and an astonishing 3 million customers a month. Spencer’s 125 outlets across 25 cities, of which 8 are Hypers, 5 Supers, 8 Express, 5 Fresh and 100 daily’s stores.

Nilgiri’s is a popular supermarket chain in South India, which traces its origins to the year 1905, when Muthusamy Mudaliar, then a mail runner for the British, opened a small shop dealing in dairy products. The Nilgiri Dairy Farm Ltd was soon established and in 1936 he moved the shop to Bangalore. In September / October 2006, Actis, a UK based private equity investor, invested US$ 65 million in the Nilgiris Group in order to strengthen the group’s manufacturing and franchising operations in South India. This investment has given Actis controlling interest (more across more than 15 cities, largely in the southern parts of India). The company has projected a turnover of Rs 110 crores for the year.

New players in this segment include Spinach — the chain of supermarkets launched in Mumbai by Wadhawan Food Retail Ltd (WFRI), which is a part of Dewan Housing Finance Corporation. It operates 10 stores in Mumbai under the Spinach brand, and has plans to open 60 food and grocery outlets in Mumbai and Pune by the end of 2007. The company has recently acquired Sangam Direct from Unilever India Exports, a subsidiary of Hindustan Lever Limited (HLL) It has also taken over Delhi based Sabka Bazaar and The Home store for over Rs 100 crores. Wadhawan has also bought 15 outlets of Mumbai’s co-operative Maratha Stores. The Home Store offers home and lifestyle products and is present in nine major cities, while Sabka Bazaar sells food and grocery items and has 35 stores in Delhi-NCR. Spinach currently has 23 Spinach stores in Mumbai.

The AV Birla group has also joined the arena of organized retailing and has launched a supermarket under the brand name ‘More’. The company believes its mission is to change the way people shop, and this it aims at doing by giving them “More” the group has also acquired the Hyderabad based supermarket chain. Trinethra Super Retail, including its fast growing online shopping outfit, Fabmall. The acquisition has given them more than half a million square feet of selling area and a strong presence in the supermarket business in the four southern states of Andhra Pradesh, Karnataka, Tamil Nadu and Kerala, where it is the No. 1 retailer.

Reliance Retail, a wholly owned subsidiary of Reliance Industries Ltd, kicked off with a food and beverage store in Hyderabad on August 1, 2006. Currently, Reliance Retail operates its outlets under the name “Reliance Fresh” which sell food and grocery items. Fresh in the name Reliance Fresh, not just denotes the quality of products but also signifies the benefit that its consumers will derive from the varied range of products. The company has 157 Reliance Fresh outlets in 18 states and is currently working on a business model for bringing the local grocery store owners into its network by using their property on lease and signing a non-competition agreement with them. Reliance Retail made its first acquisition by buying out Gujarat based Adani Retail for a price of Rs 100 – 110 crores, Adani Retail operates a total of 54 supermarkets and hypermarkets in the country.