Kirana Stores Versus

Modern Retail Format

Maharishi Patel: 20PGDM214

Parth Bharadwaj: 20PGDM219
Rishabh Tandon: 20PGDM227
Sagar Wajidkar: 20PGDM230
Ujjwal Trivedi: 20PGDM245
Table of • Modern FMCG Retail Stores Procurement Structure & Analysis

Contents • Kirana Retail Store Procurement Structure & Analysis

• Retail Value Channel Distribution for Select FMCG Products

• Template
 Modern FMCG Retail Stores Procurement
Structure & Analysis
 Factors Small Modern Retail Store Mid Size Modern Retail Store Large Modern Retail Store
Apna Bazar
Stores Interviewed Pappoo Stores Spencer Retail
Shree Sava Super Mart

Number of Branches Single Store 6 Stores  ~120 Stores across India

Locations Single Branch Spread across a single city 37 Cities

Average Area & of the Around 3000Sqft; Average 3000-3500 Sq. Approx. 15,000 Sq. ft. Average 10,000 Sq.
Store Interviewed 9,000 Sq. ft ft. ft.

Stakeholders Involved Owner, Delivery Boys, Distributors, Companies and Distributors Companies, Distributors, Store Managers
Companies, Customer

Time to complete the

procurement process Daily (In few cases 1-2 days) Daily 1-2 Days
for perishable

Time to complete the

procurement process 4-5 Days 4-5 Days after the stock gets low 1-2 after the automatic intimation to the
suppliers
for nonperishable
 Modern FMCG Retail Stores & Procurement
Structure & Analysis (Contd.)
 Factors Small Modern Retail Store Mid Size Modern Retail Store Large Modern Retail Store

Procurement Single Store hence operated according to
management structure the store manager
• Mixed Structure
• Procurement of regular demand
products orders are done centrally
• Non-Regular use products are ordered
according to the demand in each store.
• Store Managers and customer demand
for a new products are also considered
• Digitally managed system
• Product Requirement is managed
centrally, and automatic intimation
goes to the supplier when inventory
gets below the certain level

Store Managers decide in most cases

Store manager or the owner has all the what is needed for the store by looking at
Store Manager's Say No say, It is decided by the head office
say the inventory software and demands by
the customers
POS Software Yes (EAZYPOS) Yes (Marg) Yes
Average is 15- 17% goes as low as 6% and Overall store average for FMCG products
Margins Ranges from 10% to 30%
as high as 30% for some products is 24%
1 Month, Also depends on company and
Credit Time Around 10 days 25 Days
amount of bills in first 3 months
Discounts/Offers given
No Yes Yes
to customers
Customer Information
No Yes Yes
Gathering
 Kirana Retail Store Procurement Structure
& Analysis
Stores Vinay General Store Mamta General Store

Stakeholders Involved Wholesalers Wholesale traders and company people

Time to complete the procurement process Daily Don’t keep perishable products
for perishable products
2-3 Days once the stock gets low (During COVID it
Time to complete the procurement process 2-5 Days took them more than a week or 15 days to get
for nonperishable
some items)
Is there any 3rd party involved in the
process? No No
Store Manager/ Owner decides
What say does the store manager has on Wholesaler/distributors also have a limited say on Family runs the store, so we decide what to stock
what product they deliver in our store
the stocking of any particular product?
Margins 7-10% Around 10%

Credit Time 2 weeks 20-25 days

Average Area & of the Store Interviewed 300 Sq. ft 500 Sq. ft.

Digital/Electronic Payment Yes (Mobile/UPI) Yes (Cards/ Mobile/UPI)

Home Delivery No Yes (for few regular customers)

 Retail Value Channel Distribution for Select
FMCG Products
Store-Based Retailing   Non-Store Retailing  
Grocery Retailers   Non-Grocery Specialists   Mixed Retailers    
Other
Non-
Retail Channel Traditional Grocery Health and Beauty Specialist
Modern Grocery Retailers     Grocery      
Retailers Retailers
Distribution Specialist
s Non-retail
Direct E- channels Total
Department Selling Commerce (Hair Salons)
Other Stores
Other
Health
Grocery Beauty Chemists/
Product Segments Convenien Forecourt Hypermar Supermar Independent and Outdoor
  Retailers (Ice   Specialist Pharmaci      
ce Stores Retailers kets kets Small Grocers Beauty Markets
Cream Carts Retailers es
Specialist
etc.)
retailers

Bath &
Shower 0.0% 0.0% 11.9% 7.9%   62.7%   2.6% 7.2% 0.0% 0.0%   1.6%   2.2% 3.8%     100%

Cosmetics 0.0% 0.0% 10.7% 8.1%   18.8%   7.9% 2.6% 0.0% 0.0%   30.3%   8.5% 13.1%     100%
Personal Deodorants 1.6% 0.0% 9.4% 11.0%   24.9%   4.9% 12.4% 0.0% 0.0%   27.8%   2.2% 5.8%     100%
Care Hair Care 0.0% 0.0% 11.8% 11.3%   49.0%   1.5% 6.1% 0.2% 0.3%   10.0%   2.5% 3.2%   4.0% 100%
Oral Care 0.8% 0.0% 14.5% 9.8%   57.7%   0.0% 13.9% 0.0% 0.1%   0.0%   1.7% 1.7%     100%
Skin Care 1.7% 0.0% 10.8% 7.8%   27.8%   3.7% 15.1% 0.0% 1.0%   17.2%   11.4% 3.5%     100%
Dishwashing 2.3% 0.1% 8.8% 6.8%   78.7%   0.0% 0.0% 3.4% 0.0%   0.0%   0.0%       100%
Laundry
1.3% 0.3% 8.9% 7.1%   78.7%   0.0% 0.0% 3.5% 0.0%   0.0%   0.2%       100%
Home Care Care
Surface Care 1.5% 0.3% 13.4% 9.7%   53.8%   0.0% 0.0% 0.0% 13.8%   0.0%   5.9% 1.6%     100%
Toilet Care 1.2% 0.1% 8.3% 5.8%   53.8%   0.0% 0.0% 0.0% 29.2%   0.0%   0.3% 1.2%     100%
Source: Euromonitor
 BIGGER THE STORE, HIGHER RETAIL STORES WITH MULTIPLE
THE MARGINS BRANCHES FOLLOW A
CENTRAL PROCUREMENT
STRUCTURE

Conclusions

POS SOFTWARE IS THE KEY SINGLE CITY RETAIL & KIRANA

DIFFERENTIATING FACTOR STORES ALSO OFFER HOME
BETWEEN A MODERN RETAIL DELIVERY
STORE & A KIRANA STORE
Thank You