HyperCITY, the large format store chain of Shoppers Stop, is considering launching smaller stores of 20,000-25,000 sq ft in cities where it has already established its brand as a hypermarket.

“These would be in cities where we have at least four large stores and so, customers are aware of our brand,” said Mr Mark Ashman, CEO, HyperCITY. The idea is to cater to a catchment that cannot access the hypermarkets, he added.

Mr Ashman said the retail chain was still in the initial stages of putting plans together for the express stores and had not set a target for the launch or decided on first city to have such a store.

HyperCITY, which had opened stores of size 100,000 sq ft, is now scaling down its outlet sizes, and opting for stores of size 55,000-75,000 sq ft. “It is unlikely that we will open 100,000 sq ft boxes anymore,” he said.

Cheaper land

Explaining the reason behind the new strategy, Mr Ashman said internationally, hypermarkets are located on cheaper land and cities offer good roads for customers to drive to the stores. “There isn't any cheaper land here and the roads are not conducive for customers to drive in.”

Also studies have indicated that HyperCITY's best customer shops once every 13 days and the second best, every 24 days. “Whilst the shopping basket of the customer in India is growing, it is much smaller than what we see in developed countries.” Therefore, the model in India is of smaller stores, he said.

HyperCITY has eight stores across the country with plans to open one more this fiscal and four to five every fiscal.

Mr Ashman said the company is yet to achieve store level breakeven and unlikely to reach profitability this year. “This is because the new stores are taking to 18-24 months to break even. Also in the last quarter, we saw higher sales of food which are low margin product areas.”

Related Topics
comment COMMENT NOW