In March 1997, Subhiksha opened its first outlet in Chennai with an initial investment of $1

million. By March 1999, the company had 14 stores in Chennai and by mid-2000, the number
increased to 50. The company expanded its operation to other states and by 2006, it had 420
stores. Subhiksha had outlets in Gujarat, Delhi, Mumbai, Andhra Pradesh and Karnataka. By
October 2008, the company had emerged a major player with 1,600 outlets, selling groceries,
fruit, vegetables, medicines and mobile phones.

Reasons for the failure:

● Un-mindful expansion spree across the country. Over Confidence &
Aggressiveness.
● The company was thinking of going for an IPO in 2007 but shelved it in view of
“Uncertain Market Conditions”
● No consolidation- Tried to be first in every town
● Poor inventory management
● Private Labels
● Operations came to a standstill due to non- payment of salaries, huge debt
burden & arrears to suppliers
● Major competition by stores like Big Bazaar, Spencer’s etc

Recommendations:
● Better management with suppliers.
● Raise funds in a systematic manner.
● Should Shut stores with low sales.
● Focus on quality instead of quantity.
● Carry sales check on regular intervals.
● Invest more in R&D and Specializations in products.
● Choosing Equity over Debt to be risk free.
● Better working conditions for employees.