Going by sales figures and profitability, the mid-level retailers have reported better performance than the larger retail chains. A survey reported in the media has covered stores like D Mart, Namdhari Fresh, Heritage Fresh and Vivek’s.
Namdhari Fresh chain with 20 stores in Bangalore, reported 20% sales growth year on, has negligible debt and expects 4% net profit this year.
Hyderabad based Heritage Fresh sold 50% more fruits and vegetables than the supermarkets. Chennai based durables and electronics retailer Vivek’s has claimed to be 100% profitable, with sales of Rs 440 crore in last fiscal and 32% revenue growth in the current financial year.
D Mart has reported 40% increase in sales in the 2011-12 fiscal compared to last year. The sales revenue from the retailer’s 55 stores was at Rs 2,400 crore in the fiscal. Comparatively, Spencer’s retail reported sales of Rs 1,251 crore, and Aditya Birla Retail is estimated to have clocked Rs 2,000 crores.
The success formula that has worked for the mid-level retailers is mostly based on
• Strong supply chains
• Short term credit gains, which are passed on to consumers
• Better consumer connect and a stronger loyal network
• Self owned retail spaces in most cases with savings on rental
• Less overheads with low profile chains