Is Small Bazaar replacing Big Bazaar in retail food chains in India

Pantaloon's Kishore Biyani is bringing his new stores - call it 'Small Bazaar' - , which will be small, like Subhiksha, which is a convenience store format and will look to address the daily shopping needs of consumers. For the past 18 months, Pantaloon has ben working on new project for the launch of KB's Fairprice Value Stores (KBFVS), a no-frills, deep discount format, sometime in August that will focus on local catchment areas and service the daily requirements of consumers. This is a radically different concept and services model which is based on a German no-frills discount format, LIDL (Owned by Schwarz). Pantaloon is planning a 'bombardment strategy' that will see the group swarming a particular area with clusters of stores. The group plans to set up 1500 stores over 18 months across top cities.

These non-ac, basic format stores will offer limited stock-keeping units with massive discounts, but will not compete with kiranas. The launch is also the result of consumer learning that

• Indians prefer fresh supplies and proximity of stores in residential areas to make frequent purchases
• More often than not, indian consumers do not have access to good roads, cheap fuel or have large storage space to stock up the bug volume purchases
• the traditional kirana style is best suited to the Indian consumer's needs

In fact, most of the modern food retailers have recently begun following the kirana (local mom-'n'-pop stores) business strategy of setting up smaller convenience food and grocery stores. These stores have positioned themselves as upscale kiranas with back-end efficiencies of a large retailer, new format such as Trumart. Spencers Daily, Wadhwani's Spinach, Vishal, D Mart and others are offering the kirana convenience of being situated locally and offering similar services such as taking orders over phone and making home deliveries.

Change in Strategy

Earlier, most of them had set up stores in the larger format hoping a higher conversion rate (consumers actually making purchases) from the footfalls in these farmats, a strategy which did not prove too profitable. Retailers say most consumers tend to visit these areas as entertainment zones rather than making their daily basic grocery purchases.

Convenience store formats are also able to get better bargains with suppliers and manufacturers by offering business scales higher than the local kirana. Consequently, manufacturers have begun stepping up discounts to the new formats, industry players said to ET.

Kishore Biyani - In Brief

Biyani, 45, is CEO, Future Group, which is designed to cater to the entire Indian consumption space. After graduating in commerce, Biyani joined the family textiles business. Five years later he launched the first branded ready-made trouser, called Pantaloon, marketed through The Pantaloon Shoppe.

Founded in 1987, as a garment manufacturing company, Pantaloon entered modern retail in 1997 with the opening of a chain of department stores, Pantaloons. In 2001, Biyani evolved a pan-Indian, class-less model — Big Bazaar, a hypermarket chain, leading to the democratisation of shopping in India. With Food Bazaar, a supermarket chain, he blended the look, touch and feel of Indian bazaars with western hygiene and it has now evolved into the favoured destination for Indian homemakers. The Future Group operates through six verticals: Future Retail (encompassing all lines of retail business), Future Capital (financial products and services), Future Brands (all brands owned or managed by group companies), Future Space (management of retail real estate), Future Logistics (management of supply chain and distribution) and Future Media (development and management of retail media spaces).

The group's flagship enterprise, Pantaloon Retail, is India's leading retail company with presence in food, fashion and footwear, home solutions and consumer electronics, books and music, health, wellness and beauty, general merchandise, communication products, e-tailing and leisure, and entertainment.