Navjeevan Super Shop, which has been in business for over 70 years now, is widely regarded as the supermarket pioneer in north Maharashtra. Beginning its journey from a humble kirana store in Jalgaon in 1946, it opened its first self-service store in the city in 1993 and since then, it has taken impressive strides in modern food and grocery retailing. From 2007 onwards, Navjeevan has been on an expansion drive and opened five stores in quick succession. As of date, there are seven Navjeevan supermarkets in operation, all in Jalgaon, with a retail area spanning 21,000 square feet, which bring in a monthly revenue of about Rs. 5 crore.
How difficult and challenging was it to open and expand modern retail outlets in the backwaters of Maharashtra?
Initially, it was tedious and a somewhat difficult task to start and operate a modern day self-service retail shop in a city like Jalgaon. Getting access to funding resources was a problem. The cooperative banks here refused us the loan for the new store as they did not understand the concept of modern retail. Even we had our doubts then as to whether the customers would adapt to the new setting. As it were, our first super store in 1993 opened to a huge response from the public. But after the initial euphoria, sales plummeted and it took us two years to reach the break-even point. For the first two years of our supermarket operations, the sales were even less than the historical level of our old provision store (which closed after the opening of the new store), which had clocked annual sales of Rs. 10.8 million in the year 1992.
The less-than-expected sales forced us to deliberate on the issue. Till the time we had remained as traditional retailers, there was no visible competition. But after converting to the supermarket format, about 600 other traditional retailers in Jalgaon turned out to be our competition. This happened because the message that got conveyed to customers was that our new store was expensive because such a big set-up requires quite a large expense to maintain and run the operations. From whose pocket would Navjeevan earn it? For us, it took a lot of effort to break this pricey image of our store and reestablish the brand image as being pocket friendly to the customers.
A decline in sales for the newly opened Navjeevan supermarket must have been disheartening. What kept you going and retain your faith in modern trade?
By this time, our younger brother Sunil, a qualified CA, had also joined the business and together (with elder brother Kantilalji Kankariya and younger brother Sunil) we held our nerves. Even though it was a difficult period for us, we somehow kept the faith that modern retailing was the future and the right thing to do. Our belief in modern trade was reinforced by two incidents. The first was when our loan (without mortgage) got approved in a day by Bank of Baroda. Its Regional Manager appreciated the pioneering path we had embarked on and remarked that we were following the right trend. The second incident was when I saw Jalgaon’s top physician Mr. Gupta picking up the shopping basket and enjoying the shopping experience in the store. To see him shop at our store spoke volubly of our shop’s consumer appeal. Such is the rush of patients at his clinic that people have to wait for long hours to get an appointment and here he was – in person – shopping at our store for a length of time! Our intuition that modern retail is the future and that we were on the right track got bolstered. We understood that what we were doing was quite innovative and it would take some time for the concept to filter down the public consciousness and gain mass acceptability. The sense that we were doing something path-breaking in a traditional city like Jalgaon gave us great satisfaction and that feeling kept us going.
What exactly did you do to restore the customer faith in the brand?
We adopted a three-pronged strategy to dispel the misconception in the customer’s mind about Navjeevan being a more expensive place to shop than at the traditional retailers. Our first strategy was to organize a house-to-house survey and offer discount coupons to the consumers. Our supermarket had now been running for two years and we executed this strategy in 1995. About 18,000 households were surveyed and were offered Navjeevan Super Shop discount coupons on specific popular items. The scheme proved to be an instant success and sales increased by 25%. Moreover, the survey provided us great insights on customer requirements through their feedback, which was invaluable. People who had never stepped in the shop or were hesitant or those who were totally unaware of this modern retail concept started entering our self-service shop.
Our second strategy was to introduce a money deposit scheme – deposit Rs. 5,000 and earn a monthly discount of Rs. 125. This strategy too paid off and eased the pressure on our loan installments, apart from also attracting and retaining a high number of customers. The third strategy that we implemented was to introduce the concept of sales girls and lady cashiers in our shop. Women employees were also engaged for cleaning/ sorting operations (grocery, etc). They effectively became the front-line staff in our retail business. This helped us in building trust with our customer base and it also helped the public to understand the concept of self service easily.
Once sales bounced back, how did you keep the momentum going and build on the gains?
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