Spencers Retail plans more dining options

Business Standard - September 26, 2008

The food and bakeries section of the flagship food and grocery retail chain Spencer's, a part of the RPG enterprises, is looking at expanding its number of restaurants in exclusive tie ups with food chain outlets.

Within the next two to three months the retail player, in a tie up with eatery outlets, will expand in its food and bakery business.

Spencer's in partnership with Sankalp, specialising in Gujrati thali food, Rajdhani specialising in Indian authentic cuisine, Yo China, another fast food outlet specialising in Chinese cuisine and Singapore based Bread Talk will set up such a chain of outlets.

Sources close to the company said, that the outlets will follow a pattern like the one used in the recently opened eatery in Kolkata, under the brand name Orientum.

The outlets will be opened in Bangalore, Chandigarh and Baroda. All the outlets will be of a large sized format spread across an area of approximately 2500-5000 sq feet requiring an investment of Rs 1 crore by the partner, while the flooring, basic infrastructure and decoration is to be provided by Spencer's, as a part of the tie up.

The retail major is also in talks with McDonalds, Kentucky Fried Chicken (KFC) and Mainland China for opening such large format restaurants and as soon as the space required for setting up the outlet was selected, work would start.

With the expansion of the sub leased business, the company is eyeing a turnover of Rs 50 crore this year from the bakery and food services segment of Spencer's.

Food Courts which are a part of all Spencer's hyper outlets delivering a very high and good margin to its business, is expected to contribute about 35 per cent to the company's total turnover this year.

Spencer's currently has 160 shop in shop bakeries and food courts in the country.

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Spencers Retail on course to expand rapidly

RPG Group’s Spencer’s Retail, one of the early entrants in Indian retail business, is on an expansion spree to take on its peers. The company is planning to invest Rs.3500 crore in its retail business during the next 3 years and also come out with a Rs.1000 crore IPO by next year.

The group operates under 5 retail segments – Spencer’s Hyper, Super, Daily, Express and Fresh. It expects to have retail sales of Rs.10000 crore in next 5 years. Apart from it, there are other retail outlets such as Music World, Books and Beyond, RPG Cellcom and Health and Glow. Apart from expansion, it is also renovating its existing stores.

Spencer’s Retail has also merged its power company CESC with Pathik Retail, the holding company of Spencer’s Retail, to draw synergies owing to different cashflow requirements of both the companies.

The company’s hypermarket chain Spencer’s Hyper would increase outlets from 11 to 60 within three years. It is not positioned as a discount store and besides 30000 products offers services like Insurance, health check, personal loans, travel assistance, live kitchens and specialty foods.

The supermarket chain, Spencer’s Super would go up from 6 to 20 by 2008. the smaller formats - Daily, Express and Fresh - would go upto 600 by 2008. The total number of all its retail outlets would grow from 400 to 2000 stores by 2009 and 5,000 stores by 2011.

visit: http://www.labnol.org/india/corporate/spencers-retail-on-course-to-expand-rapidly/729/

The Financial Express - Feb 01, 2008

Spencer's Retail, part of the RPG Group, said it will invest Rs 2,500 crore to ramp up its total number of stores by 2010.

"We will invest Rs 1,000 crore by March 2009 and another Rs 1,500 crore by 2010," RPG Group Vice-Chairman Sanjiv Goenka said, while inaugurating a Spencer's hyper store.

Spencer's is a subsidiary of RPG's power company CESC Ltd, after the merger of Spencer's holding company with the power utility.

Goenka said he has not yet decided the route to raise resources for the expansion. However, the company was open to all options, including private placement and public offer.

He said Spencer's has achieved Rs 100 crore sales per month and this would go up to Rs 250 crore per month in 2008-09.

Currently, there are 400 Spencer's stores across 60 cities in the country with a total area of 1.5 million sq ft, which gets annual footfall of 48 million people.

The company plans to add 30 to 40 stores per month to take on the competition.

Spencer's Retail has several formats, Spencer's Express, Daily, Super and hyper depending on the location.

Other RPG's retail brand stores include, RPG Cellucom, Books & Beyond, and Music World. Total retail stores of RPG's retail brands is 630.

visit: http://www.financialexpress.com/news/Spencers-Retail-to-invest-Rs-2500-cr/267887/

The Financial Express - Jul 18, 2008

Spencer’s Retail Ltd, part of the Rs 13,500-crore RPG Group, is all set to re-brand its small retail format stores from “Spencer’s Daily” and “Spencer’s Express” to Spencer’s and relocate some of the stores to newer locations due to poor demand. On the other hand, plans are also on the anvil to focus on setting up 75 large-format hypermarkets in India by March 2010, Samar S Sheikhawat, vice-president - marketing, Spencer’s Retail told FE.

According to Sheikhawat, “With this move, Spencer’s Retail Ltd will now have only two retail formats. It includes, “Spencer’s” for small-format retail stores with an area size of 2,000 sqft to 10,000 sqft, and, “Spencer’s Hyper” with over 40,000 sqft for hypermarkets.” Currently, Spencer’s Retail Ltd runs 368 supermarkets, including 32 large-format stores.” As for the rationale behind the move, Sheikhawat explained, “It has been observed that rentals for large size properties are seen falling by about 40% in the metros, as the prices are now becoming negotiable. Hence, it is affordable to lease out larger properties for setting up hypermarkets than expanding more small-format stores. We have recently relocated Spencer’s supermarket store in Kolkata, Kerala and Hyderabad. Other cities too will witness similar trend.” By the year-end, Spencer’s Retail plans to set up a 70,000-sqft hypermarket at Thane and at Vasai. Sheikhawat said, these properties were signed even before Spencer’s hypermarket was launched at Malad.

Spencer’s Retail now plans to double the number of private label brands from 5,000 to 10,000 as private labels has contributed 15% of the 25% to Spencer’s Retail’s overall sales turnover in the past 18-20 months, he informed.

Sheikhawat added, “In order to combat rising inflationary trends, we are planning to start home meal replacement (HMR), a new take-away meal trend at Spencer’s hypermarket apart from launching ‘Innovative promotions’ such as food festivals -Thai, Brazilian among others. Plans are on the anvil to start at home contact programme for women, apart from contact programme for school children in order to promote various kids competitions as well.”

visit: http://www.financialexpress.com/news/Spencers-set-to-rebrand-small-retail-format-stores/337209/