Professional Documents
Culture Documents
PROFITABI Location
LITY Availability of Stock
DRIVERS
FOR FOOD Increasing the variety
WORLD Operational Cost Management
Leveraging the Brand
PRICING
• Competitive Pricing (to be in the line with the corner grocer).
• SKUs or staples category products were cheapest in the cities to attract more regular customer.
• Top 15 Branded SKUs were placed @ 3% below MRP.
• Mega Price offer on at least two SKU every month.
• For the strategic category, aggressive value added range price for protecting margins was to be
followed whereas for the convenience and specialty categories, maximum retail price was to
followed
• 52 weeks continuous promotion.
• Aim to build an image of shop as VALUE for money store.
• For fresh vegetables, The top 5 items would be cheaper in comparison to market price and for the
other vegetables the price were on par with market price.
• Fruits sold on the premium quality price.
LOCATION
C 8 2650 1096
• We can see that for all the
three cities the operating
expense is very high. OPERATING EXPENSES PBT
• On an average category A (RS 000)
stores are more profitable
CHENNAI 2533 1441
stores
• In case of stores of category B
and C the operating expense BANGALORE 3526 1850
per store is less but even then
there PBT is less HYDERABAD 1608 518
• To increase the profitability
the company should decrease
the operating expenses
DIFFERENCE BETWEEN THE
PROFITABILITY OF NEW AND OLD STORES
• Facility of Stores
• Ambiance of the Stores
• Variety of Products Available: In 1990 there were 53 core categories of fast-
moving consumer goods with 7,715 SKUs However, by 1996, the total
number of SKUs increased to 15,160
• Pricing of the Products
• Marketing strategy
• Promotion
RECOMMENDATIONS
• They can focus more on mass market rather than targeting niche
• They can create Competitive Advantage by using Backward integration
• In Chennai and Bangalore the PBT/Sq ft is highest for A category stores.
• In case of Hyderabad as stores are new so focus should be on increasing the sales of current store
• From Table1.11 we can see that when we increase the number of stores the gross margin is increasing and the
operating expenses are decreasing
A 0.138487 A 0.194855
B 0.112051 B 0.012943
C 0.0721 C 0.043841
RECOMMENDATI 25
Margin
ONS
23.24
20.18
20
18.2 17.94
• Focusing on Categories Process Foods, 16.78
Bangalore 8
Hyderabad 5