The Hindu Business Line : Wadhawan Foods introducing non-store format thru Sangam Direct

Mumbai May 7 Having added a non-store delivery format through HLL's Sangam Direct, Wadhawan Foods Retail is planning to introduce the concept before it launches its Spinach stores in the new markets.

Mr Dippankar Halder CEO, Spinach, told Business Line, "We may first start with the doorstep delivery format through Sangam Direct before we launch our Spinach stores in the new markets that we enter.''

It intends to add on categories in wet groceries such as frozen foods and fruits and vegetables to its list of doorstep deliveries. "Today there are no wet categories present under Sangam Direct and we would be adding new products such as fresh fruits and vegetables which already exist at our Spinach stores,'' said Mr Halder.

Having set up multi-channel distribution systems, Wadhwan Foods would be exploiting the synergies between its store and non-store formats. For instance, it would now have the call centres operating on behalf of Sangam Direct to direct calls to its nearest Spinach outlets to service customers.

"Instead of contacting the warehouses, the call centres would be contacting the nearest Spinach stores, thereby saving on delivery time,'' Mr Halder claimed.

However, there are other challenges in the non-store formats. "The challenges are mainly internal and include scale and competencies which are required in this business.''

Considering that stalwarts like the Future Group's Food Bazaar have withdrawn from this model of retailing, managing costs remain critical to the success of the business.

HLL's best practices

However, HLL's best practices in managing the business have come in handy for Wadhwan Foods.

As Mr Halder pointed out, "HLL has introduced us to some of its best practices which has helped in understanding warehousing systems and merchandising processes in the non-store formats.'' With a Rs 600-crore turnover in Mumbai, Wadhwan Foods is at present in the process of rolling out its stores in the rest of Maharashtra and in cities such as Kolkata and Delhi. At present, the company has 23 stores in Mumbai where Sangam Direct also has its limited operations. "Today, we have covered a larger geographical area through Sangam Direct and expect about 15-20 per cent of our turnover to come from our non-store operations in Mumbai,'' he added.