Convenios are small grocery outlets ranging from 800-2000 sq ft and these will be located in residential localities, serving a catchment area of 0.5-1 km.
KOLKATA: Want to top up on your weekly shopping? Urgently need some sugar or a packet of chips? Well, soon you need not walk to the neighbourhood kirana store. Because, convenios are set to become the next big thing in the Rs 30,000 crore organised retail industry.
Big-time players like Pantaloon Retail, Piramyd Retail and Spencer’s have all set their sight on this space.
Convenios are small grocery outlets ranging from 800-2,000 square feet and these will be located in strictly residential localities, serving a catchment area of 0.5-1 km, unlike a Spencer’s Super, Piramyd TruMart or even a Pantaloon Food Bazaar, which all boast of high street locations.
The aim is to provide items of daily needs at a convenient distance from one’s doorstep. Thus, the emphasis will be on fresh products like milk, bread, eggs, fruits and vegetables.
Market research has revealed that the ratio between bulk and top-up shopping stands at 55:45 and around 47% of the average Indian consumer’s wallet is spent on food, home and personal care (FHPC) products.
Though organised retail comprises a mere Rs 30,000 crore or 3% of the total market in India, the figure is set to rise to 8-10% by 2010 thanks to a rise in the aspirational graph and improved retail real estate infrastructure.
Piramyd Retail Ltd, in fact, plans to have three TruMart Dailies (1000-2000 sq ft) for every single TruMart Supermarket (4,000-5,000 sq ft) by 2007 across Mumbai and Pune. In all, there are likely to be 45 stores in this time frame. “We plan to saturate these two destinations first and then decide on a new city,”said Mr Bipin Gurnani, COO, Piramyd Retail (PRL). The third option could be Ahmedabad, Delhi or even Kolkata, suggested Gurnani. Eventually, PRL plans to take its Piramyd Megastore as well as TruMart Supers and Dailies business models to all the geographical locations. “This will rationalise supply chain logistics and improve economies of scale,” added Gurnani.
Pantaloon Retail, according to sources, has already advertised for space to set up its chain of Food Bazaar convenios (800-1,500 sq ft). According to the grapevine, it has already zeroed in on locations in south Mumbai, Dadar and Andheri.
“The idea is to set up as many convenios as possible and grab a maximum amount of the consumer’s wallet,” said sources in Pantaloon Retail.
“Spencer’s, which will increase its present retail space from 3.5 lakh square feet to 45 lakh square feet over the next 30 months, will have the highest number of convenios among all the sub-brands - the others being hypers, supers and dailies,” said RPG Group vice-chairman Sanjiv Goenka. Around 8 lakh square feet will be devoted to the Spencer’s Fresh convenios alone. The total investment will amount to Rs 400 crore.
If Piramyd is eyeing the cluster model - where, if one TruMart Supermarket serves five housing cooperatives, then five convenios will cater to the needs of each housing society — Pantaloon intends to source all its supplies through its wearhouses which will also supply to the Food Bazaar Supermarkets.
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