Spencer’s to treble its topline

Tuesday, 14 September 2010

Kolkata-based RPG Enterprises -- one of the earliest Indian entities to enter the modern retail business -- has opened one million sq. ft. of retail space. In the next 30 months, the company plans to double its trading area and treble its topline (from Rs 1,000 crores to Rs 3,000 crores). It also plans to increase its store-level profit 20 times. The expansion includes standalone stores selling meat and poultry as well as a bakery chain.

Spencer’s focused on the value chain and found that it did not have the right range of products and the right opening price points. These were corrected and task forces were set up to reduce the cost of power, manpower and rents. Capital expenditure which was about Rs 1,800 per sq. ft. was brought down to Rs 1,200 per sq. ft. For hiking margins, private labels were enhanced. Currently, their food, grocery, apparel, bakery, fruit and vegetables put together make up about 30 per cent of total sales. This will be pushed up to about 45 per cent in the next 18 months. In the next 30 months one million sq. ft. of retail space will be added. The entire focus will be on large-size stores because costs are recovered better through these.