Discount Store with a difference

Members
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 About Shubhiksha
Chennai based grocery & pharmaceuticals store
Founded by R. Subramanian in 1997
In 2004, 164 stores all over Tamil Nadu &
Pondicherry
About 1600 store all over the India
Revenue Rs. 2200 million
Aimed Rs. 2800 million by the end of 2005
 Goal of the company
• Open store for every two kilometer in Chennai
• 550 store by 2009 in Delhi
• Plan to expand in other part of India
 Strategy
• Focused on the lower & upper middle class
• Offer a better ambience than typical general
store
• Prices are 8% less than the MRP
• Inform customers about promotional offers
• Store keepers help buyers in purchase
decision
 Supply chain & Inventory
• It avoid intermediaries
• Goods directly procure from manufactures
• In house built supply chain software
• Separate godowns to stock branded,
unbraned & pharmacy products
• All stores are connected through internet
 Trouble Time
• The major food retail chain Subhiksha’s crisis was
felt during September 2008. Following things
signified that Subhiksha is under huge crisis:
• Inability to repay the debts of the bank
• Nonpayment of salaries to its employees
• Accumulation of a huge amount of arrears
• Shuttering down of many of its stores
• Failed to pay back the suppliers
• Rapid expansion without consolidation and focus
• Inefficient management
• Lack of HR policy
 Trouble Time
Initially pharmacy business faced many trouble
Other pharmacist protested & damaged the
stores
Lower price created doubt about quality
standard in the mind of drug inspector it
fallowed by customers
Glaxo refused to supply the drugs
It filed a suit against Glaxo & won the case.
 Current scenario
• Company has a total debt of around Rs 750
crore,
• Need funds to operating requirements
• Looking for selling stake to raise funds
• Unable to pay wages, rentals and its suppliers.
• Trying to protect its store & assets but it has
been crippled due to shortage of staff.
Thank You