SEMESTER-3

RETAIL MANAGEMENT

Assignment 1
Retail Format & Site Location Strategies on

Submitted To:
Dr. M. Sathish

Submitted By:
Trisha Singh
Batch of 2019-21
19020841036
 SPENCER’S INDIA

Spencer’s India is one of the biggest retail outlets in India, headquartered in Kolkata, West Bengal. It
is India’s largest and fastest growing multi-format retailer with 135 stores, including Hyper stores in
over 40 cities in India. As a pioneer in organized food retailing in India, the modern-day Spencer’s
Retail started operations back in the early 1990s in South India. Spencer’s Retail is a division of RPG
Enterprise, a business group with more than 20 companies in industries such as power, technology,
retail and entertainment.
Mission Statement

Strives to exceed the aspirations of its customer for a healthy & fulfilling lifestyle by providing
The most innovative customer goods & delectable taste experience.
The ultimate shopping experiences
Unbeatable value
The “next” place away from home or office to relax and indulge themselves.

Vision Statement

To “build spencer’s as the most professionally managed retail business in the country through:
Excellence in all operating process;
Nurturing & facilitating a learning and growth culture;
Building a unique retail experience for the customers”

March’20(Rs. In crore) March’19(Rs. In crore)

Net Sales 2373 2187
Total Income 2402 2214
Total Expenditure 2294 2173
Profit/Loss of the Year -57.02 7.94
Brief income statement of Spencer’s 2020 compared with 2019.

Spencer’s state themselves as Convenience stores- These are neighbourhood stores that cater to
the daily and weekly top-up shopping needs of consumers. Ranging from 1,500 to 15,000 sq. ft. in
size, they stock an assortment of fruits and vegetables, food and non-food FMCG products, staples
and frozen foods. The larger stores having a floor area of more than 10,000 sq. ft., usually are in
hypermarket format or within a shopping mall. They offer a selected range of baked goodies, frozen
foods, personal and home care products, baby care essentials, basic wear, and electrical equipment.
Due to the convenience store format, they are present at easily accessible locations where people
can make quick purchases and check out. Mostly the customers have large household expenses and
the store has large turnover. They face intense competition from large retail giants such as

Offline Competitors Online Competitors

1. Big Bazaar 1. Big Basket

2. DMart 2. Grofers
3. Vishal Mega Mart 3. More
Spencer’s largely is divided into 4 Retail formats-

1. Spencer’s Express
a. 1000 sq feet in area
b. Open from 7am-9pm + home delivery services
c. Store next door for fresh needs
d. Stock fresh dairy, fruits & vegetables, bread and bread products, fresh batters, fresh
masalas, fresh pickles, fish & meat.
2. Spencer’s Daily
a. 2000-4000 sq feet in area with bright friendly environment.
b. Friendly neighbourhood stores that cater to entire daily shopping needs- from
regular groceries to fresh food to weekly top-up shopping.
c. Spencer’s Daily saves the hassle of bargaining with the local Kirana shop owners
(because it offers the lowest possible prices)
3. Spencer’s Super
a. 5,000-10,000 sq feet in area
b. Place for monthly shopping-daily needs & stocking of products for future-home care
products, personal care products, baked, chilled & frozen food, baby care products,
etc.
4. Spencer’s Hyper
a. Huge destination stores with more than 28,000 sq feet area
b. Shoppers come here looking for fantastic deals across all categories and better
shopping experience.
c. Comfortable, clean, bright & functional ambience to shop along with the
convenience of finding everything under one roof at the best value for money.

Characteristics distinguish the Spencer’s brand & create memorable 360 Degree shopping
experiences for consumes:
Spencer’s Philosophy
Spencer’s embodies its philosophy of delighting shoppers with the best products & services that
enable a fine living at reasonable prices, while providing a warm, friendly and educational retail
environment.

Strengths
1. Brand name
Weaknesses
2. Broad product portfolio
emphasis on brands & quality. 1. High operational cost
3. Good customer engagement 2. High bargaining power of
programmes suppliers
4. Accessible, empathetic, trust 3. Less product range as
brand imagery compared to competitors.
5. Home delivery services-more
convenient for customers

Opportunities
1. Growth opportuinity in the
organized retail sector
2. Changing Indian demographic-
rising middle class & young
generation with more disposable
income prefer to have everything
everything under one roof.
3. Expansion across country
through large format
Threats
1. Stringent Government
regulations in the organized
retail sector in India.
2. Intense competition from
large retail giants.
3. Competition from rising e-
commerce platform.

Store Layout Format – Spencer’s Indira Nagar, Lucknow, UP

• Grid Layout is used when a store carries a lot of products (different kinds of products) with
parallel aisles with merchandize on both sides. This layout helps in maximizing space in the
store. With this retail format, it’s difficult to use this layout to create a “shopping
experience” for the customer. Customers often can’t take shortcuts to what they need. Line
of sight is limited, forcing a customer to look up and down aisles. Visual “breaks” are needed
to keep shoppers engaged. The picture below depicts a grid layout format of store-
• Cash registers are located at the entrance/exits of the stores. The merchandise is easy to
locate for regular customers. Most of the items are cost efficient and have offers on them
which gives a feeling of savings to the customers.

• Signage and graphics- This helps the customers locate specific products and assortments. It
provides information about the product such as suggestion items or special purchases.
Graphics basically reinforce a store’s image. The below pictures depict how signage and
graphics are used by Spencer’s retail store on occasion of Diwali to bring special offers and
purchases to customer’s notice.
 DIWALI OFFERS AND DISCOUNTS

SUGGESTION ITEMS FOR PURCHASE

• Storefront Design- Since it is a festive season, the store entrance is made attractive with
beautiful colourful lights and sweets. This leads the shopper to a world that is welcoming
and exciting.

• Interior Design- to ensure that shoppers enjoy a warm & friendly ambience, upscale look
and feel of products, have a joy of exploring and convenience of locating everything under
one roof.
• Visual Merchandise Display- A display which is a combination of marketing principles, retail
merchandising knowledge, and creativity to use the space and layout of the store to present
the store’s inventory in a positive way. Advantage of having a good merchandise display-

1. Reflects your brand – A good visual merchandising display stays in-line with
Spencer’s overall brand. It gives a business a sense of identity and brand consistency.
2. Engages the shoppers – An attractive and welcoming store creates a positive first
impression. It encourages people to come into the store, and can help guide them in
finding the right product for their needs. Visual merchandising helps create a positive
shopping experience for customers so that they will be more likely to return for
future visits.
3. Helps in Growing sales –Visual merchandising can increase sales by directing people
to the products they want or need. It can also help them discover new products and
solutions.

• Offers Display- Since it’s a festive season, there were lot of offers available for the
customers on sweets and gifts. The offers were displayed near the entrance to attract more
customers to the store and near the payment counter to attract customers to makes last
minute purchases.
Factors to be considered before selecting location

1. Proximity with customers- The closer the business is to you the customers, the greater the
chance that they will buy from you again. An analysis on who is your customer and where
are they located is very important. In my case, the spencer’s store was right next to
residential colonies. It is the most “go-to” place for people living nearby.

2. Rent Price- A central and more important location means higher rent. It is critical for a
company to know if they have the resources to be able to pay expensive rent.

3. Analyse the Demographics- Demographics is one of the most significant factors to consider
when choosing a business location. It’s important to be near your target customer group.
The sells will be higher in an area dense with your target market. The business should know
about who your customers are and how close they are to your location. The demographic
profile that you have for your target audience will allow you to make this decision.

4. Infrastructure and Accessibility- Good infrastructure is beneficial to any kind of business.

Power and water supply, good road connections are just a few factors to consider when
choosing your business location. Lack of enough parking spaces for your employees, or
accessibility for people with disabilities, can be an issue to locations. Therefore, a location
which doesn’t cause any problems with daily routines and tasks should be chosen.

5. Distribution Network- A good location for a business helps you save money on
transportation. A good proximity to suppliers is key in minimizing logistics costs.

6. Intensity of Competition- This business location factor is a tricky position in terms of

competition. It creates both an advantage and a disadvantage. For instance, if the location
has a lot of surplus customers because of your competitors, you might attract them and
have an extra benefit for your business. However, suppose if competitors sell the same
product, one might end up losing. So, choosing a location should definitely look into this
important factor.
7. Economic condition- Governmental regulation- Retail stores also may face government
barriers and heavy restrictions and regulation. Therefore, examination on governmental as
 well as cultural obstacles in nearby locations should be done when developing location
strategies. Environmental regulation- Stores should consider the various environmental
regulations that might affect their operations in different locations. Environmental
regulation also may have an impact on the relationship between the store and the
community around a prospective location.

8. Potential for growth- A decision needs to be made as to whether the premise you are
choosing is a short-term location or to stay there for the long haul. A location’s flexibility
could be a very important factor regarding the premises’ suitability for your business needs.
While a perfect business location is different for every business, covering these crucial areas
will certainly give you the best chance of beating the odds and keeping your business on
track for future success.

The Pros & Cons of Site location

• Exclusive location-corner of 3 intersecting roads.

• Parking space available.
• Very close to the target customers
• Competitor stores are atleast 0.5 kms away. No nearby stores
Pros • Easy for the suppliers & vendors-known localty having broader
roads.
• High vehicular & pedestrian traffic.
• Large size of store.
• Easy home delivery services

• Less visibility of store from street-a huge tree just outside the store
covers the look and feel of store.
Cons • High rental fees
• Local & state legal regulations
• Size of store is small-gets rushy on weekends.

The advantages of location overweigh the disadvantages and acts as a competitive advantage
for the store. It’s because of the prime location of the store which has enhanced the number
of footfalls of customers and has been consistently increasing the revenue earned from the
store.
Adequate parking space outside the store
helps ease of customers and avoids street
congestion. Customers usually come here to
do their monthly shopping preferably by a
car. The parking space is not charged yet safe.
No other store in the nearby area has this
provision so this acts as an advantage to them
Presence of store at the trisection of 3 prime
roads helps residents of all the nearby area to
shop at spencer’s easily and conveniently. The
broader road outside the store gives an ease
and convenience to the suppliers & vendors.
There is no other store in vicinity hence it acts
as a competitive advantage for the store.

Suggestion for future:

The Spencer outlet shown above is situated on the 1st floor of the building. There is an SBI
Bank which has remained closed for years now due to some legal issues. Spencer’s can try
to find the problem associated with the area and try acquiring it and expand their store
into a multi-floor store. It will bring more attention and volumes of customer to the store.

It’s a festive season and Spencer’s leveraged the
opportunity by offering lot of offers and
discounts. Almost every product category had
several offers. The display of offers was from the
sealing of roof top which acted as a promotional
strategy in disguise of decoration of festivity.
We can see that due to the presence of so many
offers and discounts, customers without any
buying intension also stops to check if they can
utilize any offer or discount. At such difficult times
also, the store is offering so many offers which
has increased the footfall since Covid unlock.
Although the spencer’s store was opened, the
shutter remained half-closed giving a feeling that
it is closed for customers. The spencer’s board is
also not very clear. A new customer might not be
able to get attracted immediately.
The spencer’s store gets hidden because of
presence of a huge tree right in front of the
store. The tree is planted on Government
land and it can’t be cut which is hiding the
feel of the store.

Scope of changes to the store-

1. Refilling the stock quicker- Since the store had a wide variety of merchandise, the
replacement rate of products should also be fast. When customers find shelves empty, it
might lead to poor engagement and might affect the brand value of Spencer’s. Such a
situation should be avoided as much as possible and customer should be informed if it’s out
of stock rather than just leaving the shelf empty.

2. There is a scope and opportunity of entering into men’s and women’s apparel section if
more floors in the building is acquired. Adding an apparel’s section can not only increase the
product assortments but also convert the store into a larger format. There should also be an
Increase in the number of sales person and delivery boys in the store, who can help
customers in searching products easily & helping them make a better buying decision for a
product.

3. Direction and signage- There should be clear directions of which product is available at what
area and in which shelf line. It gets easier for a customer to track the products they are
 looking for and enter the specified row. This strategy will not only make it easy for the
customers but will save their valuable time. As a retail outlet, it gives a stronger message
that “Spencer’s cares about the time and experience inside the retail outlet”. Some of the
competitors of Spencer’s have does this like in the picture below-

4. Depending upon the foot fall at the store, there should be adequate number of billing
counters with cashiers to handle payments. At no point of the shopping experience, the
customer should feel that the process is getting delayed or is efficient. The picture below
depicts that although there is a cash counter available but no representative is there to
proceed customer billing. Due to this, there is a longer queue at one counter making the
process time consuming and less effective.
References:
All the photographs have been clicked by self.

Location of store-

Spencer Retail Limited, Plot No. 1 & B, Ishwarpuri Colony, Sector 12 - Indiranagar. 220016 Lucknow,
Uttar Pradesh.

Data references-

http://www.spencersretail.com/formats

https://economictimes.indiatimes.com/spencer's-retail-ltd/profitandlose/companyid-69232.cms

https://www.referenceforbusiness.com/management/Int-Loc/Location-Strategy.html

https://www.thebuildingconsultancy.ie/news/the-importance-of-good-retail-design/
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