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Hypermarket chain Spar plans to launch new store format

LiveMint logoLiveMint 27-04-2017 Deepti Govind

Bengaluru: Dubai-based Landmark Group’s hypermarket chain, Spar, is planning to launch a new type of retail store in India positioned between the hypermarket and supermarket formats, in a bid to expand its footprint faster.

The company, which competes with hypermarket chains like Hypercity and More, expects to open 5-6 new stores in the hypermarket format this year—Spar’s fastest rate of expansion since it entered India in 2006. It is also launching technology-driven initiatives to establish a bigger virtual presence and make shopping more experiential for its customers.

“We are innovating with our format and putting together an improved version of our store - our Spar 2.0 if you want to call it that. This is based on understanding the customer’s shopping needs, understanding where the gaps are and in which categories, and then recreating an experiential destination that does not exist,” said Rajeev Krishnan, managing director and chief executive officer of Spar in India.

The company did not divulge further details on the size of its new format but said it could be on the ground within 12 months.

It is becoming tougher to grow at a faster pace in the hypermarket format, Krishnan said. “There are a handful of players in the hypermarket space and we’re all possibly trying to go to a lot of the same cities. There are only so many malls that exist in India. So everybody is competing out of the same space, in essence,” he added.

Spar has typically opened only one or two outlets a year and currently operates 18 stores across India in places like Gurgaon, Delhi and Ghaziabad in the north and Bengaluru, Hyderabad and Coimbatore in the south. Its plan to open 5-6 new hypermarket stores this year will include additional ones in Bengaluru and Hyderabad.

“Spar in Europe runs multiple formats. Most of the food and grocery retailers, especially in Europe, have evolved their businesses using multiple store formats. Doing that in India is a natural fit,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight.

The company is also going to ramp up its use of technology. Spar is very close to rolling out its digital kiosks – touchscreens mounted on a stand that customers can use to place orders—in some technology parks in Bengaluru. It already has something called a queue buster in its stores whereby staff can walk to each customer in a checkout line, scan everything in their basket and transmit it to the checkout till to quicken the billing process.

The firm has also developed touchscreens in its stores to help customers choose home furnishings better by helping them put together a virtual room using Spar’s range of home products. It is also planning to pilot food trucks in the next month or so that will do the rounds in a few specific catchments in Bengaluru and sell everything from fruits and vegetables to fish and meat. The trucks will also carry Spar’s digital kiosks so customers can order products that aren’t available on the truck.

“Using technology, digital interface is going to become even more popular. Digital screens are becoming more accessible to a wider range of customers, so we will see a lot more of it happening. Self-checkout may not work in India, but assisted check-out is an innovation which may be required, in fact, in high traffic or high footfall areas,” Dutta said.

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