Interview with Managing Director , SPAR International
The Netherlands-based euro 30 billion (euro 195,000 crore) retailer SPAR International, which through a licensing agreement with Max Hypermarkets runs 10 hypermarkets in India, wants to expand its presence here through more local partners. It is currently in talks with Indian retailers for partnerships. In an interaction with Raghavendra Kamath, the company's managing director Gordon Campbell explains SPAR's strategy and plans for India. Edited excerpts:
What are your plans for India?
We have signed 20 properties to set up our stores in the next couple of years.
What kind of business has SPAR done in India in 2011?
We have done a business of euro 70 million (Rs 455 crore) in 2011.
You have been in an agreement with Max Hypermarkets for last five years. Why have you opened only 10 hypermarkets so far?
The first stage was to build a management team and set up the supply chain for fresh, chilled and ambient foods. Then Max opened the first three SPAR hypermarkets. The concept had to be refined in terms of product range, merchandising, pricing strategy and space allocation. Considerable time was devoted for training and developing staff, to deliver excellence in customer service. We had to be satisfied with the results before rolling out the concept. Suitable real estate is difficult to find and secure in India and this also took some time. The rate of store openings accelerated in the last two years.
You have been talking to local firms for tie-ups over the last couple of years, but you have not gone for alliance with any of them. Why?
Together with Max, we have created a network of profitable stores. We have built a strong SPAR retail brand and we have brought a unique fresh value offer to the Indian consumer. We are now ready to work with other partners in different regions of India.
How is Indian retail sector/ consumer behaviour different from that in Russia and China, where you have operations?
The Indian food retail sector is at an early stage of modernisation. India has unique infrastructure challenges in terms of suitable real estate, access roads and public transport. The Indian retail consumer has responded positively to the SPAR retail offer. Therefore, we see a great opportunity to build a network of modern stores throughout India. Indian consumers want modern stores with quality safe fresh foods, a wide range of products, and an exciting shopping environment.
How do you look at the indecision of the Indian government in allowing foreign firms in multi-brand retail?
It is inevitable that India will open up to FDI in multi-brand retailing whether it is this year, next year or in five years time. This will rapidly accelerate the development of modern retailing supported by a supply chain. Indian food retailers need to prepare for this change by modernising and developing their own stores. SPAR is willing to work with retailers that have the willingness and ambition to work with the SPAR brand, supported by our knowledge and expertise, to develop hypermarkets, supermarkets and a supply chain to best international standards.
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