Big Bazaar, the 164-strong hypermarket chain of the Future group, seems to be following its tagline ‘Naye India Ka Bazaar’ (New India’s bazaar) quite faithfully.
The 11-year-old chain is revamping its stores in major cities to stay relevant to shoppers who are asking for more and are spoilt for choices by other hypermarket chains such as Tata-run Star Bazaar, Aditya Birla’s more, Bharti’s Easyday and D Mart.
“Customers in top cities such as Mumbai, NCR (National Capital Region), Bangalore and others have shopped in modern retail for the last 10 years and are asking for better experience. If we do not change to match their expectations, we will become irrelevant,” says Sadashiv Nayak, chief executive, Big Bazaar.
So the difference is stark when you enter the recently reopened and one of the earliest stores of Big Bazaar at Lower Parel. The scattered look on the ground floor is gone. What you see is neatly piled stocks of apparels in colourful racks, a live bakery, wider isle width at the food and grocery section. And Bollywood tracks have been replaced by pop numbers. The Lower Parel store is among dozen such outlets in other cities which have gone through such a revamp.
Though the chain’s founder Kishore Biyani has always taken pride in saying that Big Bazaar has been inspired by a typical Indian bazaar and shoppers should not feel initimidated by too much orderliness in stores, Nayak says the basic concept has still remained intact. “The concept of bazaar and the sense of abundance are still there but the whole focus of the revamp is to give more convenience to customers and provide depth in categories,” he adds.
For example, Big Bazaar is increasing cash tills (counters) at the stores (at Lower Parel, they have gone up from 12 to 22) and the chain has changed the entire point of sale software to make billing faster.
Not only that, the chain has strengthened the distribution centres of its stores which helped it get fill rates of 80 per cent compared to 55 to 60 per cent earlier. Fill rate refers to rate which goods are supplied as against the order placed.
The retail chain has increased the height of walls on the ground floor of the Lower Parel store so that it can highlight the depth of fthe ashion segment. First, it displays categories such as menswear, women’swear and then sub-categories such as men’s casual and then finally brands.
“Customers always look for great price and products. We thought of conveying to them the range available instead of creating confusion,” said Vishal Kapoor, head, design strategy at Future Group.
There are other initiatives too. For instance, in the Rajaji Nagar store in Bangalore, the chain has launched a pilot project called Seva, which aims at helping women. The store has grinders which grind wheat, soya or ragi and help make multi-grain floor. It also helps shoppers cut vegetables at no extra cost. The store also has counters which help shoppers with payment of utility bills. “The Seva project is aimed at removing negative labour from kitchen. We are looking at expanding it,” Nayak says.
Besides, Big Bazaar sells different community-specific staples and grains and foods under ‘Ektaa’ brand. For instance, Ektaa has kasundi, a mustard sauce popular in Bengal, or snacks such as khakra, poha and mamra popular in Gujarat, chole masala and rajma masala loved by Punjabis or muruku enjoyed by Tamils.
On the merchandise side, the chain is focusing on selling categories: it has identified 44 categories such as food, fashion and home and increasing depth in them, than selling individual brands or products.
But Big Bazaar has tough competition in the area it specialises in. For instance, Star Bazaar, which has UK’s Tesco as its partner, has one of the largest live kitchens and wide assortment of fruits and vegetables whereas Big Bazaar had outsourced its fruits and vegetable sourcing until sometime ago. Now it manages on its own.
Tesco has launched 200 products from its private brands range at Star Bazaar stores and after its entry, the total number of products at Star has quadrupled.
Even Raheja-owned Hypercity, earlier touted as a premium chain, is revising its strategy to include value products and increase the share of the fashion segment to get more margins. Others such as Bharti’s Easyday and Reliance Mart have also scaled up aggressively in the last couple of years, eating into Big Bazaar’s sales.
Says the CEO of a rival retail chain : “In Old Madras Road, they (Big Bazaar) were the first one to open a store and they used to do business of around Rs 10 crore a month. After Star opened, it came down to Rs 7 crore.”
Says Abneesh Roy, associate director, institutional equities, research, Edelweiss Securities: “After seven years, same store sales growth declines for any store and any new player entering the market shakes up things. But it is true for all players. Even a new Big Bazaar can take share from others,” Roy adds. Same store sales growth refers to sales growth coming from stores which are in the business for a year or more.
It’s early days yet. But at the revamped stores, Big Bazaar has already seen 10 percentile improvement in the same store sales growth.