Focus on increasing number of formats: Govind Shrikhande, Shopper’s Stop

30 Mar,2012

As was predicted of the sector, retail did take a beating at the hands of slowdown, especially the second half of FY 2011-12 where growth was difficult to come by. But the downturn is not as bad as it seems and good tidings are being predicted for the medium for 2012-13. Much will depend on how the large players will be geared to tackle this difficult phase including undertaking risky yet calculative decisions that will either see them in the red or see them walk away with pots of money.

 

Govind Shrikhande, Customer Care Associate & Managing Director, Shopper’s Stop Ltd is all set to take his company to new heights and feels that expanding its product offerings across the country could work in favour of the company as there are always new markets and consumers who are waiting to savour variety. Mr Shrikhande opened up to Johnson Napier of MxM India on the sidelines of Mindshare-Brand Equity Compass 2012 on how his company is geared to tackle the challenges of the future and what the retail industry needs to do to overcome the downfall scare that’s had everyone on tenterhooks.

 

Q: It’s been a shaky 2011-12 for the retail industry in India. How is Shopper’s Stop handling the slowdown conundrum?

2011 has been a mixed year for us – the first half went pretty well, but Q3 which is the biggest quarter for the retail sector witnessed a slowdown. We expect some recovery to take place in the second half of 2012-13 while the first half of 2012-13 will be a little slow.

 

Q: How have you grown organically across the multiple formats that you are present in?

We have grown very fast in the last one year. We added around 13 stores in the main format; overall we added more than 20 stores in all the big formats that we have. So it’s been a very fast-paced expansion drive for us. Going ahead, we plan to add atleast eight stores every year. I’d like to state here that the opportunity for retail community in the future is big, so it’s important that you expand today. Though there could be some short-term difficulties of sales growth not being as high as one expected it would be but if one prepares oneself so well that the model is good, the consumer traction is strong and the assortment is very good then one can be in a good position to perform well and really be ready to face challenges of the future.

 

Q: Are you contemplating expanding your product offerings apart from the staple departmental and hypercity formats that you currently cater to?

We have enough formats today like Shopper’s Stop in the department store format, Hyper-City in the hyper-market format, Crossword in the books store format…so we have enough formats currently by which we can expand and we are doing that.

 

Q: What do you derive from the changing FDI stance between the government and the retail industry?

I think FDI is getting a new meaning every season now. The Indian government did announce FDI in multi-brand retail and took it back. Also, the concept of cash-and-carry has been around for some time but now it’s getting into a different kind of a situation. I think the industry as such is waiting for the government to come up with some concrete plans around FDI but yes, once it does come in it will definitely help the whole retail industry to expand faster than what it has been able to do right now.

 

Q: What is the impact that digital will cast on the retail sector? A lot of brands are taking the e-tailing route to increase product traction…

Digital will help drive growth of retail because it is has been found that globally, a lot of consumers first check details on the internet and then go to a shop to buy stuff. It plays a support role where shopping is concerned. The fact is that almost 30-40 per cent of shopping that happens in a physical store has already been researched about before by people on the digital platform. So I do not see it posing any competition or threat; it would be self-supporting.

 

We too have started our own websites for Shopper’s Stop and Crossword which will further ensure that a customer will get a multi-channel delivery whether through physical store or a digital store.

 

Q: Apart from talent, what is the other big challenge facing the retail industry as of today?

Apart from people, the other big challenge for the retail sector is the availability of quality space and rental. This in fact is a bigger challenge than people. As for the people challenge that we face, we are trying to overcome that by building new programs like Fashion Associates, which should help us to face this crisis in a much bigger way. But availability of quality retail space at reasonable rent is still a big challenge.

 

Q: As you move forward, what would be your main objective for 2012?

We have enough happening in the company right now. The key driver would be expanding into more cities and growing the total number of formats rather than getting into new formats.

 

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