The Hindu Business Line : The space in retail

Shopping for food in India is not a weekend activity, especially for fruits, vegetables and meats. Taking advantage of this, Max Hypermarkets is actively working on making it a daily activity for the consumer.

G. R. N. Somashekar

The newly-opened Spar in Bangalore.

Anjali Prayag

If Indians had to list three sore points that could turn their newfound fondness for shopping into a harrowing experience, these would be the long queues at the till, narrow crowded aisles and car parking. That’s precisely why Max Hypermarket s pent almost two years working on eliminating these ‘pet hates’ of modern shoppers before it raised the curtains of its first ‘Spar’ store in Bangalore recently.

“We have been researching Indian consumer behaviour for the last 30 months,” says Nigel Bird, Chief Operating Officer, Max Hypermarkets. Bird has over three decades of experience in setting up and running hypermarkets in South Africa and Europe. Ideally, Bird would have liked the 75,000 sq. ft. hypermarket to spread horizontally on a single floor, but ‘space’ is important in hypermarkets and so Spar runs into three floors, has 34 cash tills (including 10 express billing counters), boasts of aisles that can hold two trolleys comfortably so shoppers can move without cringing or making way for other shoppers. Car parking hassles are eliminated with a valet car parking service and a car lift that takes the vehicle two floors above the store.

Max’s tie-up with Spar International, a Netherlands-based retail brand, helped it overcome some of the hassles of modern-day shopping. But Max itself is part of the Landmark Group, a group that has about 35 years of experience in retail in West Asia, India, Spain and China. “But we are new to food retail and are looking at Spar to transfer that knowledge to us,” says Viney Singh, Managing Director, Max Hypermarkets India. Spar is present in 34 countries across four continents and is the world’s largest independent food retail chain.

Perhaps that explains why Bird calls the food section his hero department. “There’s a method in the manner in which we have laid out products in the food section. “Simple rules — oils and spices need to be kept at the end of the hall so that they remain at the top of the fully-loaded trolley. He says in his 30-month study of the Indian consumer he has understood the Indian consumer’s obsession with fresh fruits and vegetables (which he too is passionate about). Thus food produce reaches the store within 12-18 hours of being picked up. Fresh fish is flown in from coastal Mangalore every day. “Stale produce is discarded immediately. I’d rather not have anything on the store shelf than offer consumers two-day-old stuff,” says Bird. A good mix of Indian and imported food products line the shelves of this ‘hero department.’ Little touches like these make hypermarkets a sought-after shopping destination, says Bird. “We have arrived at a model best suited for the Indian consumer,” states Singh.

Max also realised that unlike in the West, shopping for food in India is not a weekend activity, especially for fruits, vegetables and meats. Taking advantage of this, Max Hypermarkets is actively working on making it a daily activity for the consumer. Good deals, more lines of fresh fruit, vegetables and meat and the ‘Food to Go’ area which has a salad counter, fresh fruit juice kiosk, a bakery that will bake a cake according to customers’ specifications while they shop are all efforts going into making shopping a leisure activity.

Bird is also gung-ho about his other hero departments at the store: apparel, consumer electronics and the DIY (do it yourself) sections. “We expect 50 per cent of the sales to come from the food section and the rest from the other floors,” he says.

The company has also drawn a lot of critical knowledge for this from the parent company, Landmark Group, which entered India in 1998 with the ‘Lifestyle’ brand in Chennai. The Group currently has 50 stores and four brands in the country: Lifestyle, Home Centre, Max and Fun City. The Group has also announced intentions of foraying into budget hotels with its Citymax brand.

In August this year, Max announced its partnership with Spar International and plans to have seven Spar stores in all major metros and Tier II towns by the end of 2009 at an investment of around Rs 200 crore. Skyrocketing real estate prices would, of course, be a deterrent, but we’ll work it out, says a confident Singh.

Retail talent is another worrying factor for all players getting into the business now. With mega expansion plans across the country, the war for talent is snowballing into another IT-like scenario. Singh agrees that talent is one of the challenges for the industry. “But at the top level we have excellent talent within the group, we have borrowed some of our best practices in retailing from group companies and have access to information from there,” says Singh.