Gurgaon's First and Most Successful Independent F&G Retailer
Progressive Grocer|August 2021
SINCE LAUNCHING ITS FIRST OUTLET IN THE YEAR 2000 IN DLF GURGAON AT A TIME WHEN MODERN TRADE FOOD AND GROCERY STORES WERE NOWHERE ON THE RETAIL HORIZONS OF THE MILLENNIUM CITY, NEEDS SUPERMARKET HAS GROWN TO ADD 26 LARGE, MEDIUM AND SMALL STORES TO ITS KITTY, CLOCKING AN ADMIRABLE RUN RATE ON VARIOUS PARAMETERS OF RETAILING EXCELLENCE ALONG THE WAY. PROGRESSIVE GROCER SPOKE TO NEEDS SUPERMARKET’S MD AJAY DHAR, AND CEO, ARUN KHATTAR, ABOUT HOW THE GROCERY CHAIN HAS BEEN ABLE TO HOLD ITS OWN AND CLOCK STEADY GROWTH IN A HYPER-COMPETITIVE MARKET DOTTED WITH BIG-BOX NATIONAL RETAILERS AND THE SECRET SAUCE BEHIND ITS SUCCESS RECIPE.
Sanjay Kumar

Back in the early 1990s when Modern Trade Food & Grocery was a distant concept in India, one man was frenetically looking for the right model to launch his own store. His epiphanic moment came when he came across a store named “Nanz” in Greater Kailash 1, Delhi.

For Major Murli Dhar (retd.), that was the moment when he realized the time had come to step out and turn his dreams into reality. Now that he had found the right model, he set about to scout for a suitable location to launch his store.

His search for an ideal place to set up his store took him to Gurgaon, which was then in the midst of a runaway real estate boom with shiny condominiums, building projects, and chrome-and-glass offices springing all over the place.

Needs Supermarket currently operates 26 supermarkets and convenience stores — spread across large, medium and small formats — with most of them located inside Gurgaon, whereas one is based out of Delhi.

“New housing societies, most of them in the premium category, were coming up in Gurugram then and my late father felt there couldn’t be a better place than to open a store close to one of these prime condominiums,” says Ajay Dhar, Managing Director, Needs Supermarket.

And so started the journey of the biggest independent Food & Grocery retail chain of Gurgaon, which opened its first outlet in Supermart 1, DLF Phase 4 in October 2000. “We were literally the first modern grocery trade outlet to come up in Gurgaon. It was a time when the concept of ‘Self Service Super Markets’ was new to the city but people were warming up to it and our first outlet began receiving a good response over time,” says Arun Khattar, CEO, Needs Supermarket.

That first store is still running, a strong testimony to the brand’s resilience and deep consumer connect that Needs Supermarket has been able to forge in the market. In the early days, sales were slim and it took a few years before the store started to pull in robust returns and good customer traffic. “On average, store sales then were not more than Rs. 2000 per day, as there were very few families staying around in the vicinity of the store. Only on weekends, we used to see higher sales of around Rs. 10,000-12,000, but over the past decade things have really turned around well,” says Dhar.

In fact, the elder Dhar’s strong belief and intuition to venture into Modern Trade Food & Grocery retailing has paid off well. Needs Supermarket currently operates 26 supermarkets and convenience stores — spread across large, medium, and small formats — with most of them located inside Gurgaon, whereas one is based out of Delhi. “We have big stores but not necessarily hypermarkets, medium-sized stores, and small stores that are located in some of the prime condominiums in Gurgaon,” informs Dhar, who continues to steer his retailing company into new markets and build on the legacy left behind by his father.

Along the way, while Dhar has ensured that Needs Supermarket stays on the growth track — his 26 stores now spawn 56,160 sq.ft. in a retailing area that pulled in Rs. 80 crore last year. At the same time, he has also shut down a few nonperforming stores. “During the past 20 years of our operations, a couple of our stores were shut down, as they were not viable to the firm’s growth. We had, in fact, 28 stores until sometime ago but we closed down a few of them.”

Dhar believes that there is long runway for growth ahead. “As far as the organization’s growth is concerned, we plan to open four new outlets in the current financial year. Two of these would be in Noida and the other two would be in Gurgaon. After adding these outlets, we anticipate our revenue to grow an additional Rs. 25-30 crore within a year.”

NEEDS SUPERMARKET: FACT FILE

  • Retailer/ Brand Name: Needs Supermarket

  • Launch Year: 2000

  • Parent Company: Needs Supermart Pvt. Ltd.

  • Company Headquarters: C-001, Supermart-1, DLF Phase 4, Gurgaon, Haryana

  • Key People: Ajay Dhar, Managing Director; Arun Khattar, CEO

  • Operating Model: Lease

  • Retail Format: Convenience/ Neighbourhood

  • Number of Employees: 125

  • Total Number of Stores as on 31.07.2021: 26

  • Number of States and Cities present in: 2

  • Total Retail Space: 56,160 sq.ft.

  • Annual Turnover: Rs. 80 crores for FY 2021-21

  • Average Sales Per sq. ft: Rs. 40

  • Average Bill/ Ticket Size: Rs. 550

  • Same-Store Sales Growth: 4%

PREDICTION FOR THE FESTIVE SEASON AHEAD

The prolonged lull in India’s economy and the widespread disruption caused by the Covid crisis has left many retailers despondent. Many of them are still keeping their fingers crossed even while desperately hoping for the festive season ahead to bring back some cheer to their overall sales. So, how will the fortune cookie crumble for the retailers with the festive season about to start?

Managing Director Dhar thinks that food and grocery sales don’t have much to do with the state of the economy anymore. “Until 10 or 15 years ago, it was a known fact that Diwali had the potential to double or triple your sales. But over a period of time, people have become smarter and more intelligent. So rather than spending on gifts to give to their extended family and friends, they now choose to spend their money in buying gold or investing in assets for themselves and their children.”

As a result of this trend, those big spend on gift hampers worth ten thousand or five thousand rupees have come down drastically. Instead, what many people are doing is to send electronic greeting cards to their friends and they prefer spending their festival budget on buying something useful for their own family and children.

Dhar feels that it is not a correct interpretation to say that the gifting trend has slowed down only because the economy is downbeat and consumer sentiment is at a low ebb. “As far as the companies and corporate clients are concerned, most of them have already been paring down their gifting budget for a while now and gifting is now restricted to only select clients.”

Further, the gifting trend is now no longer limited to Diwali. It is spread all year-round by way of various celebrations and promotions carried out by companies, on different occasions like birthdays and the other special days sprinkled throughout the year. “However, owing to the Covid crisis that has put a kibosh on all such celebrations, there could be some pent-up sentiment waiting to be released,” Surmises Dhar.

CEO Khattar says that the festive season usually brings along an uptick in sales for products like chocolates, Danish cookies, and Haldiram snacks like packaged rasgollas. In keeping with the trends and the spirit of the festive season when people like to indulge and gift bakery products, Needs Supermarket will revamp and expand its bakery section as well.

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