Spinach to cash in on local shopowners' strength

Food and grocery retail chain Spinach wants to leverage on the strength of local kiranawalas for growth.

To understand the daily needs and stock the relevant merchandise, the chain has hired 100 local kiranawalas from the trading areas to help them in sourcing, procurement and carry out the front-end operations. Spinach employees 500 persons at present.

"Retailing is an applied science which cannot be entirely handled by MBAs and high flying executives. Local people will be of great help in procuring the produce at the right price and quality in a particular season,"said Dippankar S Halder, CEO, Spinach.

The firm has also appointed part-timers from local mandis in its Bandra-Kurla Complex (BKC) and Andheri stores. They will be imparted a three-week training in behaviour, etiquette, retailing, product knowledge.

"They are given equal opportunities to grow and paid good salaries. Where big retailers have taken years to build volumes, we have done it in months with the help of these local people," said Halder.

"We want to learn from the experience of the kiranawalas such as their merchandise mix, pricing strategy and understanding of local needs. If we can take them into confidence, we need not be even bothered about Walmart," he added.

As part of its strategy to run stores in the neighbourhood of residential localities, the firm sets up stores in the mandis with concentration of local feriwalas.

"We want to compete with them and sell more than them. It is not that we are killing their livelihoods as we are ready to hire them and give fixed remuneration higher than what they usually get," he said.

Spinach wants to consolidate in Mumbai first before expanding to other parts of the country. At present, it has 19 stores in Mumbai and it plans to take this number to 50 by the end of financial year 2007. "We have lined up 15 to 20 stores in the cities such as Pune, Sangli, Satara and Nasik in Maharashtra. We want to grow from Mumbai to Western Maharashtra and then across the country," Halder said.

Though it has three formats "" Spinach Super (5,000-7,000 sq feet), Spinach Local(2,500-3,000 sq feet) and small-sized Spinach Express, it wants to focus more on Super and Local formats in new areas.

Halder said though convenience stores like Spinch can not give heavy discount, they are trying to match or give better prices than local traders.

Spinach also offers locality specific merchandise mix and does category planning to woo customers form local kirana stores and mom and pop shops.

Depending on the majority ethnic group, the chain offers speciality products, in addition to other products, in the area where it operates.

For instance, it offers Mangalorean spices or Khakras in Borivli and speciality fish in Seven Bangalows. It also has exclusive veg outlets in Saibaba Nagar and Ghatkopar.

"Even our pricing and range planning changes according to locality. We have seperate range and pricing plan for different Mumabi suburbs. Unless we offer suitable merchandise and right pricing, we will not remain relevent to our customer", he added.

Also, Halder is concerned about the customer satisfaction. "Customers can call my cell number 24 hours for complaints, queries, which is displayed at all our stores. Fortunately I don't get many calls," he says.