Trent to push store brands to grow grocery chain Star Bazaar

Trent Ltd., which runs apparel stores Westside and Zudio, is looking to scale up its grocery business by focusing on promoting its own brands.

The Tata Group company runs the hypermarket chain, Star Bazaar, in a joint venture with the UK’s Tesco and currently has around 50 stores spread across Mumbai, Pune, Bengaluru, Kolhapur, and Hyderabad.

Westside and Zudio are the flagship chains of Trent, while the grocery business is a relatively smaller vertical. In a recent chat with US investment bank Jefferies, Trent’s CEO and Executive Director P Venkatesalu admitted that the grocery business was challenging, and this was largely due to the company not following its own “playbook” as with its other formats where it promoted its private labels.

For instance, in the case of Westside, the company has put in place an aggressive strategy of focusing on its own brands, and this is the strategy that it intends to follow now for the grocery business as well. “We are now applying the same playbook here, which entails focusing on our own brands, etc.,” Venkatesalu said.

While private label is a slower path to growth, it is however stickier because it comes through brand loyalty.

Also read: Walmart’s key revenue driver Flipkart plans big thrust on groceries

Unorganised

With about 12 million retail outlets and an estimated size of close to $600 billion, the grocery market in India is largely unorganised and very complex. Organised retailers with supermarkets and hypermarkets have captured some share, but it is still minuscule. While all organised retailers stock a range of items manufactured locally and nationally, they also try to push store brands with discounts and other incentives. Customers tend to stick with brands they know and have used for decades, and it requires innovative marketing strategies on the part of retailers to get their own brands moving.

While the Tata group has its own brands, such as Tata salt and Tata Sampann, it also has Star Bazaar store brands, such as hygiene product Klia, food product Fabsta, and personal care product Skye.

Venkatesalu said that in recent quarters, this strategy has seen success with strong customer traction, especially with the Fabsta brand, which has caught on.

“Also, the capital needed to pursue our playbook and turn around this business is not large in the context of Trent’s balance sheet,” he added.

Trent has no intention of entering the quick commerce market, as it feels that it is not viable from the standpoint of unit economics.

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