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Caselet Spencers (1)

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Case Study SPENCER’S HYPER : Tier II Town (Western India) Overview :The Spencer’s Hyper Market in the a tier II town of western India was opened on 28 th March 2014. The total chargeable operative area of the store is 25000sqft. The store was setup inside a Mall premise and the LGF space in the Mall was allocated for Spencer’s Hyper setup. The total Mall area is approximately 4.5lacs sqft with the presence of major brands like Lifestyle, Inox, Mac Donald’s, KFC, other vanilla brands and a Foodc
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  Case Study SPENCER’S HYPER : Tier II Town (Western India) Overview :-  The Spencer’s Hyper Market in the a tier II town of western India was opened on 28 th  March 2014. The total chargeale operati!e area of the store is 2 000s#ft. The store was set$p inside a Mall pre%ise and the &'( space in the Mall was allocated for Spencer’s Hyper set$p. The total Mall area is appro)i%ately 4. lacs s#ft with the presence of %a*or rands like &ifestyle+ Ino)+ Mac ,onald’s+ -(+ other !anilla rands and a (oodco$rt. /$r initial research for the location s$ggested a %oderately high %arket potentiality and an enriched catch%ent area. The Spencer store is sit$ated on the fringe locality of o$tskirts which is a de!eloping catch%ent of the town. In ter%s of co%petition town has ig aaar+ Hypercity+ eliance esides co$ple of local retailer in the large for%at. Howe!er+ eliance which is 1.8k% efore $s towards the city and est 3rice aro$nd 1k% ahead of $s o$t of the city are two i%%ediate co%petitors. The asic category %i) is as follows ã (M'  ã ã akery ã Staples  ã ã H53 ã ( 6 7  ã ã  6  ã ( 6 M  ã ã 9pparels  Estiated !s #$tua%:- 9s per o$r research we had esti%ated healthy 5alk In nos. and accordingly o$r sale was pinned at 1.4 cr with a 'M: of 18:. The store was initially e)pected to re;ect in %arginal<=> !e 36& d$ring the ?rst year of operation. Second year onwards the nos. wo$ld re;ect green. It was also initially forecasted that it wo$ld take 48 %onths at %ost to reco!er initial cape) in!est%ent of s.@cr. appro). 9fter the store la$nched in (er$ary’14+ o$r forecasted nos. contradicted act$al sales. 9 rief s$%%ary of o$r re!en$e nos. is ill$strated elow=  C&a%%en'es ost oenin':- ã Re%ian$e turnin' ro *+C to *+*  A eliance S$per had an e)isting store neary$t it initially did not pose a %a*or threat to o$r $siness as+ they were present as a2 retailer and targeted diBerent set of T9 that+ ga!e $s a niche to create o$r ownspace in the %arket with o$r strength in food retailing. Howe!er+ eliance con!erted their %odel fro% 2 to 2. 5hile est 3rice was always there+ it eing a foreign player ha!e certain restriction where they co$ld only transact 2 whereas+ eliance eing an India co%pany sa%e restrictions don’t apply to the%.  They can sell to indi!id$al c$sto%ers as well at disco$nted 2 rates. This changedthe ga%e co%pletely as+ eliance which was doing s.1.8 =2cr. Started clocking s.C. A 8cr which incl$ded indi!id$al shoppers as well hence+ eaten close to s.18=20 cr. etween oth of the% in the catch%ent. ã Su%y $&ain -  This eing only Spencer’s store in the city we relied on direct s$pplies to the store instead of adding , cost. This is aBecting a!ailaility $p to certain e)tent. ã C&urn ,  5hile %all is eing %aintained well+ ch$rn has started in the ?rst year of opening where -( has closed+ while so%e other !anilla retailers ha!e opened.9 co%ination of all these points res$lts in poor perfor%ance of the Store+ which was initially forecasted to e a pro?tale store within reasonale ti%e span.5hat Spencer’s needs to do to address iss$es listed ao!e and ?nd a sol$tion attle the changed co%petition scenarioD
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