The Hindu Business Line : Fresh@ sees no slowdown in sales

Chennai, Nov. 13 The retail division of Heritage Food (India) Ltd, which runs the ‘Fresh@’ stores, sees no slowdown in demand for the products on its shelves. Sales at the 75-odd Fresh@ outlets generate enough surplus to cover the costs.

The company intends to expand the number of its outlets, but would wait for real estate prices to come down further, Mr S. Jagdish, Chief Operating Officer (Retail), told Business Line.

“Our revenues grew by 20 per cent so far this fiscal,” said Mr Jagdish. According to him, the company’s ‘Fresh@’ stores have achieved per-month-per sq.ft. revenue of Rs 1,100 in the period.

Currently, the Hyderabad-based company has 75 stores across Tamil Nadu, Andhra Pradesh and Karnataka. Earlier, it was planning to take the total number of stores to 100 by the end of the year. But, owing to “exorbitant real estate prices” the company has put brakes on its expansion plans. “Though real estate prices have come down now we are expecting a further fall in the months to come. If that happens we will think about expanding our footprint,” said Mr Jagdish.

However, the company, riding on its dairy retailing network in the rural areas of Andhra Pradesh, has established over 1,800 stores on the franchisee model so far during this fiscal. These stores, called ‘Heritage Stores’, are small ones run by the company’s milk procurement agents. These agents buy groceries and fast moving goods from Heritage on credit.

Moreover, he said, the company right now is in the phase of ‘process consolidation’. It has roped in Ernst & Young to recommend ways and means to scale up its operations by consolidating various processes such as supply chain, store operations and loss prevention.

Private labels

In another initiative, Heritage Foods is all set to roll out private labels in food and non-food categories. Currently, it has private label products in groceries. “We are planning to launch a range of food items including jams, ketchups, pickles and instant foods, and a host of homecare products in the next couple of months.”

According to Mr Jagdish, these products will be outsourced to third party manufacturers to Heritage’s specifications.