Demise of the Indian Supermarket stores

Subhiksha set the ball rolling and now others are slowly pulling the shutters down. Those that began with a huge fanfare now seem to be giving in without a fight. But I think there is something that the Subhiksha’s of today (er yesterday) can still do to make a comeback.

First lets take a look at some of the problems plaguing the supermarkets.

1. no easy access (not necessarily walking distance for most)
2. they are running on the premise that indians are willing to change their habits – from shopping in piecemeal – to shopping to stock
3. poor home delivery options – you have to shop in the store, pay, and then wait for 4-8 hours for the stuff to arrive at home.
4. another change of behavior – do your own work – i.e. pick, choose, cart yourself instead of give the baniya a list and he brings everything to you.
5. lack of convenience – where is the convenience when compared to shopping from the nukkad’s baniya
6. very poor inventory control – in the US they have it down to an art form – here it seems like its left to the store manager’s intellect.

just to be fair, the benefits are:

1. a slightly better guarantee of quality goods (no pilfering with labels, product, etc)
2. cashless transactions
3. bill of items – I personally take respite in the fact that a registered bill means the business is doing fair business and paying its taxes due. Besides, the sources of procurement of groceries are on paper and hence less chances of bringing home Parle-G biscuits made in a shanty on the city’s outskirts.

So – whats a mix that can possibly work well?

1. Subhiksha/More/Reliance Fresh can try getting baniya-kind of stores (50-100 sq ft shop spaces) at all nukkads. Surely these will be less pricey than the large air-conditioned stores.
2. Connect these boutique stores by a network to help manage inventory better. Keep a fleet of trucks at a warehouse on the outskirts of the city that can ensure that these stores are well-stocked at all times (the “network” mentioned doesnt necessarily have to be a hi-fi network – it could very well be a phone-in-your-inventory kind of a system)
3. continue to support cashless transactions and provide a bill of items for all purchases.
4. Take a lesson from the baniya and offer a phone-in-your-order with free home delivery for the neighborhood.