Home grown gourmet retail chain Nuts ‘n’ Spices will expand to Bengaluru and Hyderabad next year. The retailer is also adding 8-10 stores in Chennai in coming months.

Sunil Sanklecha, Founder and Managing Partner, told BusinessLine that the company will launch 2-3 stores in Hyderabad and Bengaluru each in the first and second quarter of next financial year.

An outlet needs an investment of close to ₹60-70 lakh on average and takes 12-18 months to break-even. The company will be funding the expansion through internal accruals in a phased manner.

The gourmet retail business has been dull in the last two years due to disruption and economic slowdown. Purchasing power of buyers came down and the company witnessed a drop in demand. Sanklecha said: “The company, which was growing at 15-20 per cent YoY, did not see any growth in the last two years.”

Sanklecha said that was why he found that expansion could open up opportunities. “At a time like now you get better location for better price and hence expanding business is more feasible,” he added.

Additionally the gourmet market is a niche space and accounts for about only ₹250 crore. There are only few players in the space and Sanklecha felt that being an established brand will be an advantage.

But there are challenges in expanding to other States. For instance while Hyderabad is a virgin market with growing industries and largely untapped, Bengaluru, which has diverse population and gourmet outlets, might present a challenge. But Sanklecha feels that with their unique product line, the company is sure to pull through.

The company offers unique line of healthy products like flax seeds, which has seen huge jump in sales, in the last two years. The company’s private label that primarily sells snacks, dry fruits and spices has a loyal audience. “We talk to customers and develop flavours with our vendors and manufacturing partners for the private label. That is a key differentiator,” Sanklecha said.

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