Retail Management

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The store is surrounded by a variety of retail shops ranging from Apparel & Cosmetics to Furniture. It is usually a very busy locality due to the range of shops present and is mostly visited by the middle class segment as an all in one shopping destination. This factor adds to the location advantage of the store as being the only upbeat grocery destination for shoppers apart from Mom & Pop and Kirana shops present otherwise. Due to the fact that the Chowk Bazar area gets a little crowded in the evening, customers usually come by early (before 6 pm) which is actually a good thing according to the store manager as they can restock and replenish most of the sold items for the next day in the lean evening hours. Parking is an issue, though, for the consumers as the street is too narrow to park four wheelers and traffic jams usually occur nearby the store or the chowk.

Merchandising

Assortment Strategy

Banamali Sahu retails in two categories – food and groceries and cosmetics. Banamali Sahu is historical player in food and grocery segment and has 99 years of experience in this segment. The heritage value plays a critical element in the category of food and grocery. Their entry into cosmetic in the recent time is based on the upcoming trend in Jamshedpur and their own market insights into the buyng behaviour of Jamshedpurian townfolk. The recent increase in living style (in the past half a decade) has led to the increase of sales of cosmetics.

In each of the category the product assortment is based on

1) Previous month sales

2) Quality of the products.

Since, the shop has a heritage value associated with it , the owners make sure to not spoil the name by selling poor quality products even though sale is guaranteed.

The assortment is revised on a monthly basis based on the previous month sales. No forecasting mechanism is used by the shop. Also, for festivals separate assortment plan is devised. Special assortment strategy is devised for Holi, Diwali and Eid.

Inventory

For the food and grocery segment , 10-15 days is kept as inventory as norm. Information is passed on to distributors and agents if there is a case of low inventory. In the cosmetics category the store has automatic replenishment policy, the retailer does not check on inventory much as the distributor reptresentative comes weekly twice/thrice to the store to replenish the stock. No separate policy is present for the cosmentic category. The inventory control on the cosmetic category is comparatively poor in the cosmetic category. This is also because cosmetics is comparatively new business category for the store.

Vendors

Most of the vendors have been associated wth the shop for years and have a good strategic relation with the shop. No separate mechanism and evaluation policy is present in the shop. But, in the case of repeated quality concerns the vendor is blacklisted and business is not done in future. The major evaluation crirerion is quality. Delivery and credit facility etc is satisfied by all vendors satisfactorily to the shop and is not a major concern for the shop.

Private Labels

Banamali Sahu sells packaged rice and dal under the name BS. This not a registered brand name. It does so, because there are very few players in the packaged rice category which provide non basmati rice. Retailer knows that there exists a demand for these product in the market as most of the branded non basmati rice do not have good quality. In dal as well same reason holds. Since, Banamali Sahu started their retailing business by selling rice and dal, locals associate the shop with good quality in these two categories which is being leveraged here.

Food and Grocery segment

Category role

Food and grocery segment is chosen as the segment for further analysis.

In percentage sales food and grocery contributes the most. It contributes to 60% of the overall sales. The ground floor is completely attributed to food and grocery segment and is the major crowd-puller. A majority of the customers who buy cosmetics are customers of food and grocery at first. 700 square feet is attributed to food and grocery and same is attributed to cosmetics on the first floor of the shop. So , 50% space is attributed to food and grocery and 50% to cosmetics. Approximately 63 feet of linear shelf feet is attributed to the food and grocery segment

Assortment:

As per store manager ,the store has 300-320 brands in the food and grocery segment ranging from local players to multinational players. The biggest players are HUL and ITC. The breadth of the assortment is very high as almost all types of products in the food and grocery segment are present here ranging from rice to tea powder to dry fruits. The number of products per brand varies from brand to brand. Brands like ITC have more than 30 products but there are also local players who have less than 3 products.

HUL Ayush, Kellogs chocoflakes, Lipton Tea, Tetley products are featured in the food and grocery segment. In the cosmetics category, Lakme and Maybelline products are featured. Separate merchandising and attractive loacations have been setup for these products.

The number of SKUs of a product varies from product to product. For products like dal and ghee 10-15 SKUs are kept on the shelf. For biscuits and cookies 5-7 packets are kept. On an average 10-12 SKUs of a product is kept on the shelf. This varies as per customer demand and the space occupied by each SKU on the shelf.

The stock in the shelfs are replenished on an hourly to bi-hourly basis. As the store is manned by enough number of employees this is feasible. In the back room 10-15 daysv of stock is kept which is adjacent to the store.

New items come to the stock every month as new products are launched by different FMCG companies regularly. As per the stock manager nearly 5% SKUs are removed every month and 5-10% new SKUs come to the assortment every month. 45-50% of the assortment is estimated to be products which have been launched last year

Sales velocity:

In the food and grocery segment the average inventory turnover is 24. This is much higher than the cosmetic category which has a lower turnover. For an average SKU 150-200 units sell per

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