Nilgiris opens its 141st store, in Chennai

Vinay Kamath Chennai | Updated on March 12, 2018

New beginning A Nilgiris store at Radhakrishna Salai, Chennaiwhich opened recently. BIJOY GHOSH

Never mind the buzz around the impending sale of private equity player Actis’s stake in Nilgiris, for the supermarket chain it is business as usual. Last week, Nilgiris opened its 141st store on Chennai’s Radhakrishnan Salai, where it ran a store for 32 years before the erstwhile store closed down.

Murali Krishnan, the chain’s dapper CEO, says the chain has an aggressive store opening and private label launch plan chalked out. Five more stores are due to open this month, three in TN and two in Karnataka.

To fortify its strong private label in foods, which constitutes 30 per cent of its turnover in the foods category, Krishnan says the chain has recently launched Nilgiris sunflower oil fortified with vitamins. “The packaging is attractive and clearly communicates the benefits. Having seen success in gingelly oil launched 18 months ago, customers have taken to the new offering,” he says. The sunflower oil is priced at ₹98 a litre, lower than other big brand offerings such as Sundrop.

Dairy products constitute 30 per cent of Nilgiris sales. Last year, due to milk shortage, there was pressure both on supply and margins as procurement costs shot up. Krishnan expects this season to do better as the chain has also launched ice creams using healthier milk fat and not vegetable fats.

Franchise model

Krishnan expects the loyal customers of the Nilgiris store, to flock back to this store. Nilgiris, which operates on a pure franchise model, where franchisees pay royalty for use of the Nilgiris brand and stock their stores through a central purchasing model, totted up overall revenues of ₹765 crore for the year ending March 2014. Private equity firm Actis owns a 66 per cent stake in Nilgiris and reports say that Future group is close to acquiring the brand, though Krishnan himself avers that it’s a matter to do with the shareholders.

Published on September 15, 2014

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