Want to beat rising food prices?
Mamta Kale, a suburban based housewife, has stopped buying her daily quota of fruits and vegetables from her local vendor and now prefers to buy them only from large retail outlets based a bit far off from her house. “The vegetables are cheaper and at times even given neatly sliced and packed. We also have a wider choice of fruits and the rates too are around 30 to 35 percent lower than those of my regular local vendor. Even if the retail store is a bit far off from my house, I still manage to save a lot of money,” she says while busy stocking up for a week.
Kale is among the growing breed of housewives who have started going to organized retail outlets to make the best out of her housing budget.
In the bargain, food retail chains such as ‘Food Bazaar’, ‘Safal’ and ‘Reliance Fresh’ are cashing on, by selling fruit and vegetables up to 40 percent cheaper than the local vendors, as they manage to source their products directly from farmers and wholesalers at lower prices. Due to their economies of scale and easy availability of credit, they can offer customers a good deal.
Thomas Varghese, chief executive officer of Aditya Birla Retail limited which runs a number of retail outlets reveals that there has been a substantial increase in the footfalls in all our stores in the country. “On an average there has been at least a 5 to 10 percent increase in our revenue sales as well. The prices at our stores are comparatively cheaper than those from local vendors as we source it directly from the farmers,” he said.
Varghese attributes the increase in footfalls to the advent of new customers. “Many of the customers are first timers, who come to take advantage of the low prices. We are confident that with good service and better pricing, we would be able to retain them,” he added.
In fact last month, when the price of onions had boomed to around Rs 80 to Rs 90 per kg, organized retailers were selling the same at around Rs 40 to attract more customers. Now the rates at certain retail outlets are at around Rs 20 to Rs 25 per kg of onion, while local vendors still sell it for Rs 40- 45 per kg.
According to Satendra Aggarwal, chief executive officer of the super market business, at ABRL , “ bargains and discounts are the things that a consumer looks for. In food sales, the perception of savings shifts the brand loyalty," he said.
Aggarwal also said that they have witnessed a 10 to 15 percent increase in their food product sales, while the sales in branded food products have been to the tune of 25 to 30 percent this season.
Even for companies involved in the manufacture of food articles, it is surely an opportunity to generate better realizations. Nitin Paranjpe, chief executive officer and managing director of Hindustan Unilever (HUL) reveals that their brand of packed ready to eat food products like noodles, jams and jellies has witnessed a huge growth in the last couple of months. “With the increase in the price of some of the food products, people look for alternatives, this fuels the growth,” he said.
So the bottom line is… Want to make the best out of your fast shrinking household budgets? Forget your vendor and go to the mall…
Last month, when the price of onions had risen to around Rs 80 per kilo, food Malls were selling the same at around Rs 40 to attract more customers. Now the rates at certain retail outlets are as low as Rs 20 - 25 per kilo of onion, while local vendors still sell it for Rs 40- 45 per kilo.
Unprecedented changes in consumer behaviour lie ahead
The convergence of economic, demographic, and technological forces will bring about unprecedented changes in consumer behaviour says a new report from Deloitte Touche Tohmatsu Limited (DTTL), Consumer 2020: Reading the signs. The report throws light on the emergence of India as the world’s fifth largest consumer market by 2025 and 50 million outbound tourists by 2020 providing significant opportunities for consumer business companies.
“With its large market of middle class consumers and growing purchasing power India is already having a significant impact on the global consumer market across a wide range of consumer goods. As India’s economy gains
from strength to strength so does the growth in two- income households
giving rise to increased demand for convenience of modern retailing”, said Rajan Divekar, Senior Director, DeloitteTouche Tohmatsu India Private
Limited. “Going forward, countries like India need to take measures that stimulate consumer spending.”
Methods of engaging consumers in adopting more sustainable behaviours
in purchasing products and services will no longer be just be about
marketing and communicating. Rather, customer engagement will be
about connecting and socializing with a larger and enlightened group of consumers. Consumers now have the power of information at their fingertips, enabling them to comparison-shop and purchase a wide range of goods and services anytime, anywhere. Also, this trend is likely to accelerate, as mobile communication is expected to play an ever-larger transformative role in the future, as it provides independent access to information and increasing opportunities for mobile commerce.
In the Indian context, as Indian retail enters a new phase of growth in the coming decade, another important change is the gradual shift in the balance of power from consumer product companies to organized retailers. There are early signs of this already, like for example the growth of private label brands and consumer product companies establishing separate sales channels and trade practices for modern trade.
Thus in summary, while the Indian consumer market is likely to continue
its growth trajectory, there are many underlying shifts taking place both
at a consumer level as well as at the retail level. Consumer products companies that make themselves part of this change process are
likely to remain relevant and interesting to consumers-and positively differentiated in the marketplace.